Congratulations—you are ready to hire an employee!  Before you embark on this exciting next step for your company, here are a few things to consider:

Job Description

Establishing expectations is a huge part of setting up your new employee for success.  What will your employee’s main job duties be?  You don’t need to name every task they may take on, but you should consider having at least two or three main job duties listed in your Employee Offer Letter.

Are they going to be more of a generalist?  That’s okay.  An Employee Offer Letter can be crafted with general language to give you the flexibility to adapt to the position over time.

Other than setting a clear expectation with your job candidate, a well-crafted job description will provide a baseline to determine whether your employee is living up to these expectations.

Schedule

Ask yourself the following series of teaser questions to determine your employee’s schedule:

• Will your employee have a set schedule? 
• Will they be able to set their own schedule, so long as they work a minimum number of hours or accomplish certain goals each week?
• Is there any expectation of overtime or work travel?
• Do you want your employee to exclusively work for your company, or may they work for other companies?

Compensation

In addition to a base annual salary or an hourly rate of pay, will you be offering other forms of compensation?  This may include commission, tips, or bonuses (either discretionary or non-discretionary). 

You should be aware that regardless of what you selected above, their compensation must meet federal, state, and local minimum wage requirements. Yes, some cities have higher minimum wage requirements than the rest of the state.

Overtime Note:  Per the Fair Labor Standards Act, an employee must be paid overtime if they will be earning below $684 per week and might work more than 8 hours per day or 40 hours per week.  The rate of overtime pay is generally 1.5 times the employee’s normal rate of pay.

Items Needed Before Hire

Is there anything else you will require from job candidates before you can hire them? Do you want them to show proof of a license or give a certain number of references?

In all cases, you will need to complete a U.S. Citizenship and Immigration Services Form I-9 for each new employee you hire to prove they are eligible to work in the United States.  On the last page of Form I-9, there is a list of documents that are acceptable for proof of eligibility.

Paid Sick Leave

Arizona law requires all employers to offer a minimum of 24 hours of paid sick leave annually (when an employer has fewer than 15 employees) and 40 hours of paid sick leave annually (when an employer has 15 or more employees).

This is a good place to start for most employers.  If you would like to offer more sick leave to your employees, we can customize a sick leave policy that best fits your company.

Employers may frontload all paid sick leave at the beginning of each calendar year or may allow it to accrue at a rate of 1 hour of paid sick leave for every 30 hours worked.  If you frontload paid sick leave, employees can use it when they need it right away.  On the other hand, you run the risk of an employee using all their paid sick leave and then leaving the company.

You might be wondering about paying out unused paid sick leave at the end of the year or on employee separation.  This is a common question.  In Arizona, you don’t have to pay it out in either circumstance.

Vacation Leave

For vacation leave, on the other hand, it is totally up to you how much to offer.  You can offer paid or unpaid vacation leave.  We see a lot of companies start by offering one to two weeks of paid vacation leave.  You may choose to increase vacation leave based on an employee’s length of service.  Another option that is gaining popularity is unlimited vacation leave.

Employers may front-load all vacation leave at the beginning of each calendar year or may allow it to accrue.  If you frontload vacation leave, employees have the flexibility to use it earlier in the year.  On the other hand, you run the risk of an employee using all their vacation leave and then leaving the company.

While we support flexibility in paid time off policies, don’t forget to consider staffing needs, industry standards, and fairness among team members.

Whatever you decide on, an important aspect of vacation leave is having a process for employees to request vacation leave.  That could be done through your payroll system (we use Gusto) or via email to a supervisor.  

Pro Tip:  Require employees to share a meeting invite with “OOO” and their name to any member on the team, especially those covering for them while they are out of the office.

• Holidays

You should decide what holidays your company will be closed and whether your employees will be paid or not on those holidays.  The best holidays to close your company depend on your industry and the clients you serve. 

Federal holidays are often a good place to start.  They are New Year’s Day, Martin Luther King Jr. Day, President’s Day (AKA Washington’s Birthday), Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.  You may choose to add the day after Thanksgiving, Christmas Eve, and New Year’s Eve.

In addition, you may offer a set number of Floating Holidays, which means that your employees can use the Floating Holidays for whatever holiday (religious or not) that they choose. We suggest anchoring Floating Holidays to religious and federal holidays.  Please be conscientious to create an inclusive company culture that celebrates diversity and treats all employees equally.

Hiring Out-of-State Employees

With remote work on the rise, it is becoming easier to hire out-of-state employees to find the best talent.

With that said, you should be aware that state and local employment laws vary widely.  Before you consider hiring an out-of-state employee, talk with your attorney about what state or local employment laws might apply.

Our team is excited to help you incorporate these details into a customized Employee Offer Letter!