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How to Hire Your First Employee: Part 1

Human Resources

Hiring your first employee is an exciting milestone for any fledgling small business, but it's not as easy as it may seem. Before you make any hiring decisions — or even begin conducting interviews — do a little homework on how to hire your first employee.

Exempt vs. Non-Exempt

According to the federal Fair Labor Standards Act (FLSA), employers are required to classify all positions in their business as "exempt" or "non-exempt." This is not a distinction you want to neglect or gloss over, because applying an incorrect classification to your new employee can result in fines, the need to reimburse for unpaid wages, and applicable penalties.

One primary difference between exempt and non-exempt employees has to do with compensation. Exempt employees generally receive a salary and are "exempt" from federal rules concerning overtime pay and minimum wage. Under the FLSA, exempt employees do not have to receive overtime or premium pay for hours worked in excess of 40 in a workweek.

Many — but not all — non-exempt employees are paid on an hourly basis. All non-exempt employees must receive at least the existing federal minimum wage rate for the first 40 hours they work each workweek, and also be paid overtime (at least 1.5 times their regular rate of pay) for all hours worked over 40 in the workweek.  State or local wage and hour laws may also apply and may provide for additional required compensation.

Writing the Right Job Posting

Take the task of writing the job posting seriously. Creating a thorough and accurate job posting will not only help to ensure that your future employee is getting an honest summary of what they are signing up for, but it can also increase the odds that the right types of job seekers will respond to your posting, saving everyone time and effort. Certain basic information should always be included in the job posting, including:

  • Job title
  • Job objective
  • Description of the position's scope, responsibilities, and functions
  • List of tasks to be performed
  • Skills and qualifications required (education, experience, licenses, etc.)

When assigning a job title, one useful approach is to stick with established, and industry accepted titles — which are often also the titles job seekers are searching for. Applicants will naturally be curious about the position’s salary range and benefits, so consider addressing those details as well. (It’s fine to keep it somewhat vague by using language like "salary negotiable," "competitive salary," or “competitive benefits package.”)

When writing a job posting, use an easy-to-read format, avoiding large, dense blocks of text that can scare off job seekers. Include enough information for readers to get a good idea of what the job entails, but make it easy for a potential applicant to skim and digest by using bullet points and short chunks of text. With some basic research, you can determine the appropriate keywords to include, which can help with search engine optimization, but don't overdo it. Use language that makes sense for your industry and honestly portrays the job-related information.

Once you’ve identified the business need(s) the new position will fill, determined whether the position is exempt or non-exempt under the FLSA and any other applicable wage and hour laws, and have drafted a solid job posting, you're well on your way to successfully hiring your first employee.

Coming in Part 2: Helpful information on: conducting a job interview, relevant state and federal regulations, and determining whether the position is most appropriately filled by an employee or an independent contractor.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.