Hire Your First Tennessee Employee in 10 Steps!

Revised 04/2024

The Ten Steps

Apply for an employer ID number (EIN) with the IRS, if you haven't already.
Register your business with the county clerk in the county your business is in, if you haven't already.
Apply for a TN unemployment number.
Get worker's compensation insurance, if you are in coal mining, construction or the trades. Work with an independent insurance agent or set this up in your payroll system (see 5).
Set up a payroll system to withhold taxes:
- Sign up for a payroll service like Gusto, QuickBooks, or Paychex.
- DIYers can use a spreadsheet and the IRS Employer's Tax Guide
Make an offer of employment, preferably written.
(Optional) Conduct background checks and drug screening.
- Use an established service: AccurateNow, Checkr, or First Advantage
- Ensure screenings are applied consistently for offers or don't use them.
- DIY is not recommended, federal law governs the use of background checks.
The employee should complete these documents on the first day:
- Employee's Withholding Certificate - Federal (Form W-4)
- Employment Eligibility Verification, Section 1 (Form I-9)
- (Optional) Direct Deposit Form
Report your new hire to the state. Send a copy of Form W-4 (from 7):
- By mail: Tennessee New Hire Reporting Program P.O. Box 438 Norwell, MA 02061
- By fax: (877) 505-4761
Post required notices.
- As of writing, here are the TN and Federal notices.
- Additional posters are required for certain entities like federal contractors and agriculture.

The Work Opportunity Tax Credit (WOTC) can range from $1,500 to $9,600 for each qualified individual hired. Information has to be collected prior to an offer of employment to claim this.
TN's Drug Free Workplace Program offers a 5% premium credit on your workers' comp policy and other benefits related to claims.
The Small Business Health Care Tax Credit can return up to 50% of premiums paid for two years.

Calvin Hiatt, SHRM-SCP
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