How to Hire an Employee in Utah

Hiring your first employee is an exciting milestone, but it also comes with new legal, tax, and administrative responsibilities that many small business owners don’t anticipate. From registering with state agencies to setting up payroll, benefits, and onboarding documents, there are several steps that must be completed before an employee ever starts work. This checklist is designed to walk Utah employers through the foundational requirements of hiring their first employee, helping you stay compliant while building systems that can support future growth.

DISCLAIMER: This information is provided for general informational purposes only and does not constitute legal, tax, or employment advice. Laws and regulations may change, and requirements can vary based on individual circumstances. Employers should consult with qualified legal or employment professionals regarding their specific situation.

Obtain an EIN (If You Don’t Have One)

Before hiring, you must obtain an EIN from the Internal Revenue Service (IRS). This nine-digit number is like a Social Security number for your business and is required for tax reporting and other documents. You can apply for an EIN online through the IRS website. It’s likely that you already acquired an EIN number when you started your business.

Register with the Utah State Tax Commission

You’ll need to register your business with the Utah State Tax Commission for state income tax withholding purposes. This can often be done online through Utah’s OneStop Business Registration System, which may also allow you to register with other state agencies simultaneously.

Register with the Utah Department of Workforce Services

As an employer in Utah, you must register with the Department of Workforce Services for unemployment insurance (UI) purposes. This is necessary for reporting wages and paying unemployment taxes. Registration can typically be completed online. You will receive a State Unemployment Tax Assessment (SUTA) rate after registration.

Obtain Workers’ Compensation Insurance

Utah law requires employers with one or more employees to carry workers’ compensation insurance. This provides benefits to employees who suffer work-related injuries or illnesses. You can obtain coverage through a private insurance provider or the state-operated fund.

Determine Your Labor Needs

If you are looking up how to hire an employee, odds are you already know what you need to hire for. However, it is important to understand your business needs from the labor-demand side. For instance, would it make more sense to hire a contractor on an as-needed basis or a part-time employee, or does the workload justify a full-time employee? These are important questions to ask, given that employee costs are often among the highest expenses in business.

Write a Job Description

A clear job description helps set expectations, supports proper classification, and reduces risk later. At a minimum, this should outline the role's core responsibilities, required skills or experience, work schedule expectations, reporting structure, and whether the position is hourly or salaried. A well-written job description also serves as a useful reference for performance management and compliance.

Classify Your Employees

Before extending an offer, you must determine whether the role is a W-2 employee or a 1099 contractor, and whether the position is exempt or non-exempt from overtime. Misclassification is one of the most common and costly compliance issues for small businesses. Classification decisions should be based on the nature of the work, the level of control, and the compensation structure, not on personal preference. Government websites make it easy to determine how to correctly classify your employees.

Establish Pay Structure & Wage Compliance

Set the employee’s rate of pay, pay frequency, and overtime eligibility before hire. Ensure compliance with federal and Utah minimum wage laws, overtime requirements for non-exempt employees, and final paycheck rules. Wage and hour violations are among the most frequently enforced employment laws.

Set Up Required and Optional Benefits

When hiring your first employee, it’s important to distinguish between benefits that are legally required and those that are optional. Required benefits generally include workers’ compensation insurance, unemployment insurance, and mandatory payroll tax contributions, such as Social Security and Medicare. If you choose to offer specific benefits, eligibility rules, waiting periods, and administration should be clearly defined and applied consistently, as benefit obligations can change as your workforce grows. As a reminder, even though some benefits are not legally required, competition from other employers can make offering benefits a necessity.

Set Up Timekeeping (If-Applicable)

If the position is hourly, establish a method for tracking hours worked. This includes defining expectations for meal and rest breaks, time rounding practices, and time correction procedures. Accurate timekeeping is essential for defending payroll accuracy.

Prepare Required Employment Policies & Notices

At a minimum, employers should have basic written policies in place, even if they don’t yet have a full employee handbook. This often includes an at-will employment statement, pay practices, timekeeping expectations, and anti-discrimination and harassment policies. You must also post the required federal and Utah employment posters where employees can easily see them.

Post Job Opening on Relevant Job Sites

Once the role is defined, post the job opening on platforms that align with the type of worker you are seeking. This may include general job boards, local workforce sites, industry-specific platforms, or internal referrals. Ensure the posting accurately reflects the job description and does not include language that could be considered discriminatory.

Conduct Interviews

Interviews should be structured and job-related to ensure consistency and fairness across candidates. Focus on questions that assess skills, experience, and ability to perform the essential functions of the role. Avoid questions related to protected characteristics, and document interview notes in case hiring decisions are later questioned.

Finalizing Hiring Decision & Issue Offer

After selecting a candidate, confirm compensation, start date, work schedule, and employment status before making a formal offer. It’s best practice to provide a written offer letter outlining pay, classification, and any contingencies such as background checks or employment eligibility verification.

Gather Required Documents from Employees

You will need to gather the following documents to comply with state and federal laws.

• Signed Offer Letter.

• Form I-9. This document is used to verify an employee's identity and eligibility to work in the United States. Employees must complete Section 1 by their first day of employment, and you must complete Section 2 within three business days of their start date. You are required to retain this form for a certain period of time after the employee leaves your company.

• W-4 Form (or W-9 if hiring a contractor). Employees need to complete federal Form W-4, Employee's Withholding Certificate, to determine the correct amount of federal income tax to withhold from their wages. The federal W-4 is generally used for both federal and state income tax withholding in Utah. Ensure you have a completed form on file for each employee.

• Non-Compete or Non-Disclosure Agreements.

• Employee Handbook Acknowledgement.

• Contact Information.

• Emergency Contact Information.

• Other industry-specific or state-specific documents.

Report New Hires

Utah employers are required to report newly hired and rehired employees to the Utah Department of Workforce Services within 20 days of their start date. This information is used for programs like child support enforcement. Reporting can often be done online through the Utah New Hire Registry.

Set Up Payroll

Establish a system for running payroll, which includes calculating wages, withholding taxes (federal income, Social Security, and Medicare, as well as state income tax), and remitting these withholdings to the appropriate tax authorities. You will also need to account for unemployment insurance and workers' compensation contributions.

Start Running Payroll

Once payroll is set up, begin paying the employee according to your established pay schedule. This includes issuing pay statements, tracking hours worked (if applicable), and ensuring wages are paid accurately and on time, in compliance with state and federal wage laws.

Address Safety & OSHA Requirements

Post required OSHA notices and establish basic workplace safety expectations. Even in low-risk environments, there should be a process for reporting injuries or unsafe conditions.

Set Up Employee Records & Retention Practices

Maintain employee records securely and separately where required. I-9 forms should be stored apart from personnel files, and records must be retained for specific periods depending on the document type. Protect employee information and limit access to those with a business need.

Onboard the Employee

On the employee’s first day, review job expectations, reporting relationships, workplace policies, and how performance will be evaluated. Proper onboarding reduces early turnover and sets the tone for the employment relationship.

Keep Up with Relevant Reporting and Employee Tax Withholding/Payments

Hiring is not a one-time compliance event. Employers must continue to make timely payroll tax deposits, file quarterly and annual reports, update policies as laws change, and ensure continued compliance as the business grows.