Before you make the offer
Resolve employee versus contractor classification
The label in a contract does not control the legal result. Federal and California tests can differ by purpose, and misclassification can create wage, tax, insurance, and penalty exposure. Route uncertain facts to qualified employment and tax advisers.
Confirm the EIN and employer accounts
You generally need an EIN to hire. California says an employer must register for an EDD payroll tax account within 15 days after paying more than $100 in wages in a calendar quarter.
Secure workers’ compensation
California requires employers with one or more employees to provide workers’ compensation benefits. Coverage can be purchased from a licensed carrier or State Fund; qualifying employers may self-insure with state approval.
Check wage, schedule, leave, and industry rules
California’s general minimum wage is $16.90 per hour effective January 1, 2026, but local, fast-food, healthcare, collective-bargaining, exempt-classification, and other rules can change the applicable standard.
Choose the payroll administration method
Decide who will calculate wages and withholding, make tax deposits, file returns, produce wage statements, retain records, and correct errors. Software can administer the workflow, but the employer remains responsible for accurate inputs and applicable rules.
At hire and during the onboarding window
| Checkpoint | Purpose | Primary source |
|---|---|---|
| Form I-9 | Verify identity and employment authorization; retain as required | USCIS |
| Federal Form W-4 | Federal income-tax withholding information | IRS |
| California DE 4 | California withholding allowance information when applicable | EDD |
| Written notices | Wage, workers’ compensation, paid sick leave, and other applicable disclosures | California DIR |
| New-hire report | Report to California’s New Employee Registry within 20 calendar days | EDD |
| Workplace postings | Post the federal and California notices that apply to the business and workforce | DOL / DIR |
First-payroll readiness gate
Do not treat “the software lets me click run” as the readiness test. Before processing, verify:
- EIN and California employer account are active.
- Workers’ compensation coverage is effective.
- Employee classification and exempt/nonexempt status were reviewed.
- Applicable state, local, and industry wage rates were checked.
- Pay period, payday, timekeeping, overtime, meal/rest, and leave rules were addressed.
- I-9, W-4, DE 4, and applicable notices are complete or scheduled within their required windows.
- New-hire reporting has an owner and deadline.
- Federal and state postings are displayed or delivered as applicable.
- Tax deposits, returns, wage statements, and record retention have named owners.
- A correction and escalation path exists for uncertain inputs.
Where paid help may actually be useful
A payroll provider may reduce calculation, filing, and reporting work. A broker can help secure workers’ compensation. A qualified employment lawyer or tax professional can address classification, compensation structure, multi-state work, equity, unusual schedules, or other facts a generic checklist cannot resolve.
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