StartupSOS banner
≡ Menu

Hiring Employees

hiring employeeEmployees vs Contractors

Sooner or later, you’ll be hiring employees and using consultants. In the case of consultants, it’s important to make sure they qualify as consultants. There have been cases where companies paid people consultants, when actually they should have been employees, and calling them consultants was just a way to avoid paying taxes and providing benefits.

So get advice from your attorney on the difference between contractors and employees. For some general background, see the article from Ater Wynne in the Contractor section of the Articles and Papers page.


With a little luck, hiring more people will be one of your challenges. It’s important to follow some guidelines to make sure you do this correctly and legally.

You should get some professional advice from an HR professional to make sure you cover all the bases (see the Service Provider page.)


Again – find an HR professional to help.  You do not want to get into trouble by doing things like asking questions you shouldn’t ask.  And effective interviewing is tough.  (It may even be a non-sequiter.)

Offer Letter

Check with an HR professional to make sure your offer letter says the right things. (There is a sample letter in the HR Guidelines — see Sample Documents.) An offer letter should include:

  • The job title, start date, and compensation
  • A requirement that the employee sign a non-disclosure, invention-assignment, and non-compete agreement before starting work.
  • It should have the appropriate wording about employment being “at will” and their employment can be terminated at any time for any reason or for no reason
  • If the offer includes stock options, remember to say “I will recommend to the Board of Directors that you be granted xxxx options”. The Board has to approve options, unless they’ve delegated that to you

State and Federal Requirements

The Oregon State Corporate Division “Employer’s Guide to Doing Business in Oregon” will walk you through a number of employer issues, such as:

  • There are some required posters that must be properly displayed in the workplace. For more information, see the state of Oregon Civil Rights Division website.
  • You’ll need a Federal Tax ID (see the IRS website)
  • You’ll need Workers Compensation Insurance (check out SAIF).
  • Fill out an Immigration & Naturalization form I-9 for each employee (get the form here)
  • Report new hires to the Department of Justice Division of Child Support (see the Employers tab on the Division’s website)
  • Contact BOLI (Bureau of Labor and Industries) for Employer Information
  • Determine if you comply with the Americans with Disabilities Act (ADA). The Northwest Americans with Disabilities Act & Information Technology Center has information.
  • Check into OR-OSHA safety and health regulations