Hiring your first employee in WA, OR, or ID

Step 0: Subcontractor (1099) or employee (W-2)?

It's not your choice — it's the IRS's. If you control how and when the work is done, they're an employee.

Misclassifying = back taxes + L&I penalties + lawsuits.

When in doubt: W-2.

The W-2 checklist (WA)

1. EIN (already have one for the LLC)
2. Workers' compensation — register with L&I
3. Unemployment insurance — register with ESD
4. Paid Family Medical Leave — register with ESD (combined with UI)
5. WA Cares Fund — long-term care payroll tax
6. New hire reporting — within 20 days at dshs.wa.gov/esa/dcs/employers
7. Workers' comp poster + WA wage notice
8. Payroll software — Gusto ($40/mo + $6/employee), QuickBooks Payroll, or OnPay handle all the filings

OR specifics

Register with Oregon Employment Department, Workers' Comp via SAIF Corporation or private carrier, plus statewide Paid Leave Oregon and Transit tax (TriMet/LTD areas).

ID specifics

Lighter. Register with Idaho Tax Commission + Idaho Industrial Commission for workers' comp. No state-paid leave program.

Real cost of a $25/hr W-2 in WA

| Item | Cost | | ---- | ---- | | Wage | $25.00 | | Employer SS + Medicare | $1.91 | | FUTA + SUTA | $0.45 | | L&I (construction, avg) | $2.10 | | PFML + WA Cares | $0.32 | | Health (optional) | $2–6 | | Loaded rate | ~$32–38/hr |

Bill labor at 2.5–3× wage to stay healthy.

Best first hire

For most contractors / trades, the first hire is NOT another tech. It's a part-time admin / scheduler at $20–25/hr who answers the phone within 60 seconds. That single hire usually returns 5–10× in saved missed-call leads.