Essential Guide for California Employers: Onboarding and Compliance Checklist

12/23/2023

This article aims to provide clear, concise guidance to California employers on these essential procedures.

Collecting Necessary Documents

1. Form I-9 (Employment Eligibility Verification): Every new employee must complete Form I-9. This form verifies the employee’s identity and eligibility to work in the United States. Employers must review the employee’s documentation and keep Form I-9 on file. Your employees need to fill out and sign the first part of Form I-9 by their first day of work. They can do this after they accept the job offer. You can check the employee’s documents and finish the second part of the form anytime from when they accept the job until three days after they start working. You can download the form from the following link: https://www.uscis.gov/i-9
2. Form W-4 (Employee’s Withholding Certificate): The W-4 form is critical for determining the federal income tax withholding from the employee’s paycheck. Ensure that each employee completes this form so you can withhold the correct federal income tax amount. There is no set due date by which employees must submit their W-4s to their employers. However, the W-4 is required to calculate the employee’s Income Tax Withholding amount, so it must be provided to the employer before issuing the first paycheck. Typically, the employee submits it to the employer along with the Form I-9. You can download the form from the following link: https://www.irs.gov/pub/irs-pdf/fw4.pdf
3. DE4 (State Tax Withholding Form): Beginning January 1, 2020, Employee’s Withholding Allowance Certificate (Form W-4) from the Internal Revenue Service (IRS) will be used for federal income tax withholding only. You must file the state form Employee’s Withholding Allowance Certificate (DE 4) to determine the appropriate California PIT withholding. You can download the form from the following link: https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de4.pdf
4. Notice to Employee: California Labor Code section 2810.5 requires employers to provide written notice to employees about specific employment items. You need to give this notice when you hire someone and again within 7 days if there’s a change that won’t be shown on the employee’s next paystub. You can download the form from the following link: https://www.dir.ca.gov/dlse/lc_2810.5_notice.pdf
5. Personal Information: Collect personal information, including full name, address, social security number, and emergency contact details.

Government Reporting Requirements

1. Report of New Employee(s) (DE 34): Federal law says that employers must report the Employment Development Department (EDD) about every new employee working in California within 20 days of their first day of work. If an employee comes back to work after being away for at least 60 days in a row, they need to be reported too, within the same 20-day period. This information helps state and county agencies find parents who haven’t paid their child support. If employers don’t report new or returning employees on time, they could be fined $24 for each time they don’t report. If they don’t report on purpose, or give wrong or incomplete information, the fine can be $490. You can download the form from the following link: https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de34.pdf
2. Workers’ Compensation Insurance: Ensure that you have an active workers’ compensation insurance policy. This is mandatory for all California employers and provides benefits to employees who get injured or ill because of their job.
3. Create an Employee File: Maintain a separate file for each employee, which should include their job application, resume, signed job description, performance evaluations, and other pertinent documents.

Additional Considerations

1. Employee Handbook: Provide a comprehensive employee handbook that outlines company policies, procedures, and expectations.
2. Safety and Health Training: California’s Occupational Safety and Health Act requires employers to provide a safe and healthy work environment. Ensure that new hires receive appropriate safety training.
3. Anti-Discrimination Laws: Familiarize yourself with federal and state anti-discrimination laws. Make sure your hiring and employment practices comply with these laws to avoid any legal issues.