As Lea detailed in her posts about applying for a TN visa, she was prohibited from working for herself. And 1099 contractors are self-employed. So, it just wasn't an option for us. Lea needed to be a W2 employee of Emily Lewis Design.
The good news is that once Lea had her TN visa, I could proceed with hiring her just like any other U.S. employee. The bad news is that I had no idea what that involved and Lea would be working from Seattle, while my business is based in Albuquerque. And thus began my education, which I'm sharing here in a four-part series (lucky you!).
Turn to Experts
Of all the things I've learned since starting my business, realizing that I cannot (and should not) do everything has been the most important. Having trusted advisors for tax, accounting, insurance and legal issues are essential for me. Not only do they make my life less stressful (and save me hours that could be billed to client projects), they are experts in their areas of specialty. I'm not, and I don't want to be.
So once I made the decision to hire Lea, I first contacted my accountant, Rachel Kefauver. She has been an absolute invaluable resource to me from day one, and I knew she could get me pointed in the right direction.
To start with, she advised me of the new taxes and fees I would have to pay as an employer:
We then made arrangements for her firm to handle payroll processing and tax preparation for me. And, lastly, Rachel gave me a referral to an HR consultant who could advise me on U.S. and state labor laws and requirements.
I decided the best place to start was with the HR consultant, Wanda Easely-Small. We first had an initial (and free!) consultation, during which I learned some of my general responsibilities as an employer and the requirements for hiring an employee.
In terms of the hiring process, a lot of it was stuff I was already familiar with, having been an employee for most of my career:
I needed to create a job title and description for the position Lea would be applying for.
The job description needed to specify an annual salary or hourly rate that met Washington state's requirements.
The job description needed to indicate whether the position was part- or full-time.
I needed a job application Lea could complete to document everything from her contact information to skills to previous employment.
I needed to find out if Washington was an at-will state ( it is) to determine if an employment contract was necessary.
Much of these requirements I already had to meet for Lea's TN visa offer letter, namely the job title, description, hourly rate and part-time status. But as a registered LLC in New Mexico, I was surprised to learn that most of the laws and requirements I had to follow were those of Washington state. Because Lea is a resident of Washington, I pretty much needed to adhere to all of Washington's employment laws. New Mexico employment laws don't really apply, because she's not an NM employee.
Also, it is worth noting that a resume should not be substituted for a job application. Wanda explained to me this is because a resume reflects what the employee wants the employer to know, while the job application gathers the information the employer needs to know. A job application binds the employee, giving the employer the right to find more information if needed. A resume can, though, accompany a job application.
New Hire Documents
Wanda then advised me of the documents Lea needed to read, complete and sign. These not only ensure my company complies with labor and tax laws, but also protect my business interests:
Job application, which clearly specifies at-will employment to protect my liability
Employee eligibility verification, or I-9, which would be entirely dependent upon Lea's TN visa approval
Employee withholding allowance, or W4, which would need to include Lea's SSN once she got her visa and applied for one
Conflict of interest statement
Emergency contact form
Summary of consumer rights
Disclosure that releases my business to conduct any type of investigation into an applicant's background
She also gave me a list of “good to have” documents (in terms of protecting my business and setting parameters for employees) that Lea should read and sign:
Internet policy, which protects my business from illegal or inappropriate Internet activity conducted by employees
Telephone and email policy, which defines how employees should communicate with clients and how information from clients can be used
Travel policy, including per diems and reimbursements
Company-specific policies, such as work ownership and release of information to media
To say I was overwhelmed with this information is an understatement. But this is exactly why I hire experts. There was one challenge: at this point in time, Lea hadn't received her visa. In fact, we were still working with the immigration attorney to prepare the TN offer letter and were several weeks out from her crossing the border.
If Lea was approved for her TN visa, I needed to quickly pull the trigger on all of the employment documents to meet the start date specified in the TN offer letter. But if she didn't get approved, I wouldn't need a single one of the documents. And while paying for an HR consultant was unquestionably worth it, it wasn't cheap and it would take several weeks for Wanda to prepare everything.
Ultimately, I'd rather be out some money than without the documents I needed, especially since Lea's visa was 100% tied to employment with my company. I couldn't allow myself to be responsible for endangering her ability to stay in the country. So, I moved forward with the HR consultant and just hoped for the best. If you read Lea's three-part series, you know it all worked out (thankfully).
In part 2 of this series, I'll cover my remaining HR responsibilities, including employment eligibility verification (I-9 form) for a remote employee, document storage and record keeping.
In part 3, I'll share what was needed for payroll, as well as Washington's requirements for out-of-state businesses. And in the final part 4, I'll detail all of the employment-related taxes and fees for which I'm now responsible.
Legal Blah Blah
I hope it goes without saying, but please don't take anything I've posted here as anything other than my and Lea's own personal experiences. What worked for us is just that … what worked for us.
If you need expert advice, seek an expert.