Solo founder, about to hire my first W-2 employee. Completely overwhelmed by all the requirements. What's the minimum paperwork I actually need before their start date? Based in Delaware but employee is in California.
California employee = California problems. You'll need to comply with CA law even though your company is in Delaware. This includes: meal/rest break requirements, overtime after 8 hours/day (not just 40/week), sick leave, and a bunch of mandatory notices.
This is terrifying. What about an employment agreement? Do I need one or is offer letter enough?
Offer letter is legally sufficient but I recommend a short employment agreement that covers:
- At-will employment (important!)
- IP assignment (anything they create belongs to company)
- Confidentiality
- Non-solicitation (if not CA resident — CA bans non-competes but non-solicits are gray area)
Templates exist online but worth having an employment lawyer review, especially for CA. Maybe $500-1000.
This thread is so helpful - bookmarking for when I hire my first employee (hopefully soon!). Quick question tho - is Gusto still the recommendation in 2024? Ive heard Rippling might be better for startups planning to scale?
Rippling has more features but is also more expensive and more complex. For your first 1-5 employees Gusto is still probably the easiest. You can always switch later when you outgrow it.
The key is just picking something and not trying to DIY payroll and compliance. Thats where people get in trouble.