Hiring Your First Employee in Washington: A Contractor's Guide

Hiring your first employee in Washington changes your paperwork more than your payroll. You move from a business that sends invoices to an employer with state accounts, quarterly reports, wage rules and safety duties. This guide walks through the order most new contractor-employers handle it. It is educational, not legal advice, so confirm details with the agencies named below before you rely on them.

1. Before the first hire: open your employer accounts

Start with the state business license. The Department of Revenue (DOR) application is the front door for both workers' comp and unemployment insurance. The Employment Security Department (ESD) says: "If you have employees in Washington, you need to apply for a license from the state Department of Revenue." If you already hold a license, you update it instead: "If you're already licensed but hiring employees for the first time, you need to update your business license application."

On the application, select "Hire Employees." DOR says that filing registers you for Unemployment Insurance through ESD and for Workers' Compensation through the Department of Labor & Industries (L&I). L&I states it plainly: "you must get a workers' compensation account by applying for or updating your state business license." After DOR processes your application, L&I assigns an account manager to set up your policy, then mails a letter explaining your account, with your rate notice and certificate of coverage. ESD sends its account details afterward.

Do not skip this step or delay it. ESD fines you for each quarter you operate without being registered, either $1,000 or two times the unpaid taxes for that quarter, whichever is more. ESD wage and hour reports are also due every quarter, even when you have no hours to report.

If you have been a sole proprietor without an Employer Identification Number (EIN), get one now. The IRS says you need an EIN if you have employees, and that you can get one for free directly from the IRS in minutes. For the workers' comp side in more depth, read our Washington workers' comp guide for contractors.

2. New hire paperwork

Form I-9

Every new employee needs a Form I-9 to verify identity and work authorization. USCIS sets the employer deadline this way: "Within three business days of the date employment begins, you or your authorized representative must complete Section 2." Put that date on your calendar for every hire.

Form W-4 and state withholding

The IRS describes Form W-4 as completed by the employee and given to the employer so the employer can withhold the correct federal income tax. Have each new hire fill one out before the first payroll. On the state side, DOR states: "Washington does not currently have an individual income tax." That means you are not setting up state income tax withholding for wages.

New hire report

Report each new hire to the Department of Social and Health Services (DSHS) Division of Child Support. The deadline is "within 20 days of hire or rehire." DSHS prefers online reporting through DCS Online in a Secure Access Washington account, and it also accepts fax, phone and mail.

Our technician interview scorecard and working interview guide helps, and the new technician 30-60-90 day plan covers the first three months.

3. Washington pay rules

• Minimum wage: L&I says the 2026 minimum wage is $17.13 per hour, and it will be $17.73 per hour for most workers on January 1, 2027. Seattle, Bellingham, SeaTac, Tukwila and Renton have adopted higher local minimums, so check L&I's local rate page if you work in or near those cities.
• Overtime: Under RCW 49.46.130, an employee who works more than forty hours in a workweek must be paid at a rate not less than one and one-half times the regular rate. L&I puts it as 1.5 times the regular hourly rate for all hours over 40 in a week.
• Paid sick leave: RCW 49.46.210 says an employee accrues at least one hour of paid sick leave for every forty hours worked. Employees can use accrued leave beginning on the ninetieth calendar day. Unused leave carries over, though you are not required to allow more than 40 hours to carry over.
• Rest breaks: WAC 296-126-092 requires a rest period of not less than ten minutes, on your time, for each four hours of working time.
• Meal periods: The same rule requires a meal period of at least thirty minutes that starts no less than two hours nor more than five hours from the beginning of the shift. No employee can be required to work more than five consecutive hours without a meal period.
• Payday: L&I says employers must pay at least once per month on a regular, scheduled payday.
• Final paycheck: If an employee quits or is fired, the final paycheck is due on or before the next regularly scheduled payday.
• Records: WAC 296-128-010 says employers must "keep and preserve payroll or other records," including the dates, amounts and nature of the items that make up additions and deductions.

4. Payroll premiums specific to Washington

Paid Family and Medical Leave (PFML)

For 2026 the premium rate is 1.13% of gross wages. ESD says employers pay 28.57% of the total premium and employees pay 71.43%. Employers with fewer than 50 employees are not required to pay the employer portion, unless they opt to do so, but they still need to collect the employee premium or pay it on the employees' behalf. On a $1,000 paycheck, the total premium is $11.30, and the employee share is about $8.07.

WA Cares Fund

The WA Cares Fund long-term care premium is 0.58% of an employee's gross wages, or $5.80 on a $1,000 paycheck. You collect it from employees' pay the same way you do for Paid Leave, and you may elect to pay some or all of the employees' share on their behalf.

Unemployment insurance tax

ESD sets up your unemployment insurance account after your business license application and sends the account details afterward. Wage and hour reports are due every quarter. Your tax rate and your bills come from ESD, not from this article.

Workers' comp

L&I says employers may deduct from an employee's paycheck one-half the Medical Aid Fund portion, and you may not retroactively deduct it. Our workers' comp guide explains the math. When you add up the true cost of a hire, run the numbers in the labor burden calculator and read can a contractor afford another hire.

Premium rates change. The PFML employer share is determined each September and takes effect the following January, so confirm the rate with ESD before your first payroll of the new year.

5. Hiring rules to follow before the offer

• Pay range in job postings: Under RCW 49.58.110, an employer must disclose the wage scale or salary range in each posting, or the fixed wage amount if the pay is fixed. This only applies to employers with 15 or more employees. For postings from July 27, 2025, through July 27, 2027, an employer that corrects the posting within five business days of receiving written notice is protected from penalties and damages on that posting.
• Fair Chance Act: Under RCW 49.94.010, you cannot ask about criminal records until after you initially determine the applicant is otherwise qualified for the position. Do not put criminal history questions on your application form.
• Cannabis testing: RCW 49.44.240 says it is unlawful to discriminate in initial hiring based on a required test that finds nonpsychoactive cannabis metabolites. The exception covers safety sensitive positions where impairment presents a substantial risk of death, but you must identify those positions before the applicant applies. Decide which roles qualify and say so in the posting.

6. Required workplace posters

L&I says employers must display three free posters: Notice to Employees (If a Job Injury Occurs), the Job Safety and Health Law, and Your Rights as a Worker. They must be where employees can see and read them, such as a break room or bulletin board. You can get them from L&I's required workplace posters page.

7. Construction safety basics for the first employee

Under WAC 296-155-110, "You must develop a formal accident-prevention program," and you must outline it in written format. The rule also says to hold crew leader and crew safety meetings at the beginning of each job and at least weekly thereafter. Write your program before the new hire's first day, and review it with them on day one.

You also need to know the reporting clock. Under WAC 296-27-031, you must report to the Division of Occupational Safety and Health (DOSH) within eight hours of a work-related fatality or an inpatient hospitalization of any employee. You must report within 24 hours of an amputation or the loss of an eye that does not require inpatient hospitalization.

8. First-hire checklist

1. Apply for or update your DOR business license and select "Hire Employees."
2. Get an EIN from the IRS if you do not have one.
3. Watch for your L&I and ESD account letters, and confirm both are active before day one.
4. Write the job post with a pay range if you have 15 or more employees.
5. Skip criminal history questions until the applicant is otherwise qualified, and decide in advance whether the role is safety sensitive.
6. Collect Form W-4 and complete Form I-9 Section 2 within three business days of the start date.
7. Report the hire to DSHS within 20 days.
8. Set the payroll: wages at or above $17.13 per hour, 1.5 times after 40 hours, sick leave accrual, PFML (1.13%) and WA Cares (0.58%) deductions.
9. Schedule paid 10-minute rests and a meal period for every shift.
10. Post the three L&I posters.
11. Write your accident prevention program and hold your first safety meeting.
12. Put your quarterly due dates on the calendar using our Washington employer filing deadlines page.

For more on doing business here, see our Washington contractor hub.

Common questions

Sources

Official pages checked on 2026-10-12.

• www.esd.wa.gov/employer-taxes/register-your-business
• dor.wa.gov/manage-business/grow-business/hiring-employees
• lni.wa.gov/insurance/insurance-requirements/how-to-get-a-workers-compensation-account
• www.irs.gov/businesses/small-businesses-self-employed/employer-identification-number
• www.uscis.gov/i-9-central/form-i-9-resources/handbook-for-employers-m-274/40-completing-section-2-employer-review-and-verification
• www.irs.gov/forms-pubs/about-form-w-4
• dor.wa.gov/taxes-rates/income-tax
• www.dshs.wa.gov/esa/division-child-support/new-hire-reporting
• www.lni.wa.gov/workers-rights/wages/minimum-wage/
• app.leg.wa.gov/RCW/default.aspx?cite=49.46.130
• www.lni.wa.gov/workers-rights/wages/overtime/
• app.leg.wa.gov/RCW/default.aspx?cite=49.46.210
• app.leg.wa.gov/WAC/default.aspx?cite=296-126-092&full=true
• www.lni.wa.gov/workers-rights/wages/getting-paid/index
• app.leg.wa.gov/wac/default.aspx?cite=296-128-010
• esd.wa.gov/about-us/news-release/2025/paid-family-medical-leave-premium-rate-increases-113-2026
• paidleave.wa.gov/small-businesses/
• paidleave.wa.gov/employer-roles-responsibilities/
• wacaresfund.wa.gov/employers/
• www.lni.wa.gov/workers-rights/wages/getting-paid/paycheck-deductions
• app.leg.wa.gov/RCW/default.aspx?cite=49.58.110
• app.leg.wa.gov/RCW/default.aspx?cite=49.94.010
• app.leg.wa.gov/RCW/default.aspx?cite=49.44.240
• www.lni.wa.gov/forms-publications/required-workplace-posters
• app.leg.wa.gov/WAC/default.aspx?cite=296-155-110
• app.leg.wa.gov/WAC/default.aspx?cite=296-27-031&full=true