Adequate employee records help you comply with legal requirements and manage your employees. The following discussions explain the compliance steps you should take when hiring an employee.

• Collecting employee information. After an applicant accepts your job offer, you will need to gather some personal information about your new employee. In addition, federal law requires all employers to report all new hires to the appropriate state agency.
• Tax and compliance information. Your new employee must complete two federal forms, Form W-4 and the I-9 form.
• Creating a personnel file. Personnel files are the easiest means of keeping track of employee information to comply with legal requirements and for your own business purposes.
• Retaining personnel records. You must comply with the federal and state laws that require that certain employee records be kept for specific periods of time.
• Access to personnel records. Know who has the right to see personnel records.

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