The 2024 Employer Guide to Hiring Employees in South Carolina

Feli Oliveros

Hiring your first employee can be a lengthy and resource-intensive process. But if it’s done well, it can jumpstart the growth of your small business.

To get there, you’ll need to know about some key employment laws, as well as some tips and best practices for hiring in today’s job market. We’re here to help, so keep reading!

Do your research

Before you start your search for a new employee, get to know the federal, state, and local laws that shape your responsibilities as an employer. The following sections summarize some important matters you need to know about. 

Determine whether you need employees or independent contractors

Some businesses may find it more practical to hire independent contractors instead of employees. Maybe you don’t have the budget to hire someone full-time, or you only want to outsource specific tasks. Whether you choose to hire independent contractors or employees, it’s critical that you classify workers correctly. 

Since hiring employees comes with costs like employer taxes and a few mandatory benefits, some companies try to avoid these expenses by classifying their workers as contractors instead. However, this can result in thousands of dollars in fines and penalties. 

Avoid penalties by classifying your workers properly using the guidelines from the Internal Revenue Service (IRS). If you need additional guidance on whether a worker should be classified as an employee or independent contractor, file Form SS-8 with the IRS. 

Understand your hiring costs and tax liability as an employer

If you decide to move forward with hiring an employee, you’ll need to know how much to budget for this new addition to your team. For reference, the Small Business Administration found that hiring costs a business about 1.25 to 1.4 times an employee’s annual salary due to expenses like benefits, recruiting costs, and training. 

You’ll also need to consider how hiring will affect your business tax obligations. Here are the taxes you’ll be responsible for once you become an employer: 

  • Employers in South Carolina withhold federal and state income taxes from each employee’s wages. The amount they withhold from each paycheck depends on the worker’s withholding allowances and wages. 
  • Employers and employees pay Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA). For both employees and employers, the Social Security tax rate is 6.2%, and the Medicare tax rate is 1.45%. 
  • New employers in South Carolina pay 0.41% in state unemployment insurance (SUI) taxes on the first $14,000 each employee earns. 
  • Under the Federal Unemployment Tax Act (FUTA), employers pay 6% on the first $7,000 of each employee’s wages. Those who pay their SUI taxes in full and on time can get a tax credit of up to 5.4% on their FUTA taxes. 

For a better look at your hiring costs for a new salaried or hourly employee, use Gusto’s hiring calculator

Review South Carolina labor laws

Prospective employers in South Carolina also need to be aware of the state’s labor and employment laws. Here are some important ones to know:

  • At-will employment: Both the employer and employee can end employment at any time unless they have a contract in place stating otherwise. 
  • Leave: Employees in South Carolina are entitled to jury duty leave, witness leave, maternity leave, emergency responder leave, and military leave. Employers are not required to provide workers with paid vacation or sick leave. Those that do must adhere to their company’s policies. 
  • Discrimination: In addition to the federal protections afforded by the Equal Employment Opportunity Commission (EEOC), South Carolina prohibits discrimination based on tobacco product use outside the workplace, wage garnishment for debt, as well as childbirth, lactation, and similar medical conditions. Employers must also provide accommodations for pregnant workers. 
  • Child labor: All minors are prohibited from working in hazardous industries. Minors ages 14 and 15 have additional restrictions on the days and times they’re allowed to work, depending on whether school is in session. More information on the state’s child labor regulations is available on the SCLLR website.

Keep in mind that you may have additional federal, state, and local laws to comply with, depending on your company’s municipality, number of employees, industry, or business activities. You can find the most up-to-date guidelines by visiting the websites of the US Department of Labor, the South Carolina Department of Labor, Licensing and Regulation (SCLLR), and your local government authorities. 

Take care of logistics

Get a federal employer identification number from the IRS

All employers must apply for a federal employer identification number (EIN) from the IRS before they hire any employees. An EIN acts much like a Social Security number for businesses, allowing the IRS and other government agencies to identify your business on tax documents and other forms. 

If your business is structured as a partnership, multi-member limited liability company (LLC), C corporation, or S corporation, you likely already have an EIN. But if you don’t have one yet, you can apply for one online using the application provided by the IRS

For more information on federal employment identification numbers, visit the IRS website

Register with the state of South Carolina

New employers in South Carolina will also need to apply for a state employer account number and employer withholding account. 

To receive a South Carolina employer account number, you’ll need to register your business using the Department of Employment and Workforce (SCDEW) employer portal once you hire at least one employee. Make sure to have your business information and the date you first paid wages in the state on hand when you fill out the application. 

Then, register with the South Carolina Department of Revenue for an employer withholding account. Complete the business tax application on MyDORWAY, the Department of Revenue’s online portal, to register for a withholding account and any other business tax accounts you need. 

Find workers’ compensation coverage

Workers’ compensation insurance covers the medical expenses and wages for employees who get injured while on the job. In South Carolina, state law requires employers with four or more full-time or part-time employees to have a workers’ compensation policy. 

Most employers will purchase coverage from a licensed insurance carrier, but some self-insure themselves if they get approval from the South Carolina Workers’ Compensation Commission. Note that if you’re approved to self-insure your business, you’ll be subject to a 2.5% self-insurance tax at the end of each fiscal year. 

If you have any questions, visit the Workers’ Compensation Commission website or review their list of frequently asked questions for employers. More details on self-insuring your business in South Carolina can be found on the Workers’ Compensation Commission Self-Insurance Division webpage

Get organized

As you expand your team, you’ll be responsible for keeping personnel files and other sensitive employee information secure. These documents include: 

  • Tax forms
  • Withholding agreements
  • Verification of eligibility to work
  • Hours worked
  • Wages paid
  • Pay statements
  • Benefits forms
  • Education and training history
  • Performance evaluations
  • Disciplinary records
  • Other agreements made between the employer and employee

According to federal law, these files should be kept on hand in case they’re requested by the EEOC or another government agency. So, file these documents in a place that’s safe yet easily accessible.

At this time, you may also want to gather any other forms and resources your new hire will need. Having an onboarding package ready to go with items like software login credentials and uniforms will help ensure onboarding goes smoothly. 

Prepare your business for hiring

Put together an employee handbook

Employee handbooks aren’t required for employers in South Carolina, but they’re still an important document to have. An employee handbook, also known as an employee manual, lays out your company’s policies, procedures, and guidelines so employees know what you expect from them. 

Putting this information in writing can also help you avoid potential complaints and lawsuits from your workers. Have new employees sign an employee handbook agreement stating that they’ve received, read, and understood your company’s policies to cover your bases.

Below are some important policies you may want to have in your employee manual:

  • Code of conduct
  • Work hours and overtime policy
  • Wage and salary policy
  • Direct deposit policy
  • Rest and meal breaks 
  • Employee benefits 
  • Leave policies
  • New hire orientation guidelines
  • Workplace safety guidelines 
  • Sexual harassment policy 
  • Disciplinary action policy 

Your employment policies provide support for your business as it is right now, so you should revise them as your company changes too. Make a point to review your handbook each year and update your policies as needed. 

Prepare a compensation package

Next up is putting together your compensation package. A thoughtfully designed compensation package sets you apart from your competitors because it shows you’re willing to invest in the well-being of your workforce. If you’d like some guidance, Gusto’s blog post on creating a compensation plan may be helpful. 

For starters, you’ll need to offer competitive wages if you want to hire the best talent available. According to the Bureau of Labor Statistics, the average hourly wage in South Carolina is $30.30. Of course, this number will vary depending on the industry and role, so you should also research the market rate for the position you want to fill. 

You’ll also need to put together a benefits package, especially if you plan on hiring full-time employees. Many job seekers want attractive benefits just as much as they want higher wages, so it’s worth taking the time to figure out what perks your ideal candidates want. 

A 2024 report from Forbes Advisor found that the benefits sought out by employees today include: 

  • Flexible work arrangements (79%)
  • Flexible paid time off and vacation (67%)
  • Flexible parental leave (64%)
  • Mental health resources (62%)

Employees also continue to seek out top employee benefits like: 

  • Employer-sponsored health insurance
  • Retirement savings accounts and employer contributions
  • Professional development opportunities
  • Student loan assistance

Once you’ve chosen your benefit offerings, follow Gusto’s guide to put together an employee benefits program for your business. 

Advertise the job opening

The job post itself is another way to get prospective applicants excited about working at your business. First, make sure the following information in your job listing:

  • Job title and description
  • Type of employee (full-time, part-time, seasonal, temporary)
  • Job location
  • Expected hours of work per week
  • Wage or salary range
  • Educational requirements, if applicable
  • Skills and experience needed for the role

If your goal is to hire top talent, though, you’ll need to offer job seekers more than just the basics. So, stand out by sharing why they would want to work for you. Promote those employee benefits you worked so hard to put together (and pay for!). If your freelancers regularly praise your company culture or if you offer hands-on experience managing a team of contractors, mention that too. 

For inspiration, look at how other companies in your industry are writing their job descriptions and put your own spin on it. 

Once you’ve written your job post, it’s time to get as many eyes on it as possible. Think beyond the typical Glassdoor and Indeed job listing. If you’re hiring someone for in-person work, you could attend career fairs or post flyers in your local college’s career center. Those hiring for remote roles might seek out remote work-focused job boards like We Work Remotely and Remotive. 

Assess and interview top candidates 

As the job applications come in, review each one and invite the most promising candidates for an interview. 

To help you make an informed hiring decision, tailor your interview process for the role. For example, you may want to ask candidates interviewing for a copywriter position to complete a few short writing assessments after the initial interview. Keep your process short and efficient to be respectful of each candidate’s time. 

Also, make an effort to get back to each applicant, even if it’s to let them know you won’t be moving forward with an interview. Job seekers often spend hours tailoring their application to a role and preparing for interviews. By treating them with consideration, you build relationships with candidates who may apply for other roles at your company in the future. 

Hire and onboard your first employee

Send the offer letter

After your ideal candidate accepts your job offer and terms of employment over the phone, send them an official offer letter in writing to get their acceptance. Include the information below in your letter: 

  • Job title
  • Duties and responsibilities of the position
  • Start date
  • Wage or salary details
  • Expected work hours
  • Outline of employee benefits, if applicable
  • Conditions of employment, if applicable
  • Onboarding requirements 

Once you receive the signed offer letter, keep a copy of it for your records. 

Conduct a background check

Before your new hire starts the onboarding process, you may want to conduct a pre-employment background check as part of your due diligence. If you do, make sure to keep the following federal and state background check laws in mind: 

  • Companies that plan to run background checks on job applicants must notify them in writing beforehand. They must also receive written consent before moving forward with the background check. 
  • Employers are prohibited from discriminating against candidates based on certain protected characteristics. However, employers can ask candidates about arrests or convictions during the application process. Expunged records can’t be used in hiring or employment decisions. 
  • The state of South Carolina allows employers to test job applicants for drugs or alcohol. Companies must keep the results of these tests confidential. 
  • If you decide not to move forward with a candidate because of their background check results, you must provide them with a notice of your decision, a reason for the decision, a copy of their report, and a time frame to dispute the information in the report. 

Your local government authorities may have additional guidelines to follow, so make sure to check with them as well before conducting any background checks. 

Collect new hire forms from your employee

Federal and South Carolina laws mandate that employers collect new hire paperwork from employees by their first day of work. These documents include: 

  • IRS Form W-4: Determines how much to withhold in federal income taxes from an employee’s wages
  • Form SC W-4: Calculates an employee’s South Carolina withholding taxes
  • Form I-9: Verifies your new hire is eligible to work in the US
  • Voluntary Self-Identification of Disability form: Allows employees to voluntarily disclose whether they have a disability (required for federal contractors and subcontractors)

The following forms aren’t required by law, but you’ll want to have the information from these documents on file for each employee: 

  • Employment contract 
  • Employee personal data form, including the employee’s contact information, and emergency contact information
  • Employee handbook acknowledgment
  • Benefit enrollment forms, if applicable
  • Direct deposit form, if applicable

Report the new hire to the South Carolina New Hire Reporting Program

Employers in South Carolina must report all newly hired employees (and any rehired employees) to the Department of Social Services within 20 days of the employee’s first day of work. 

Fill out the South Carolina new hire reporting form online through the Department of Social Services New Hire online portal, or mail a paper version of the form to the address below: 

South Carolina Department of Social Services
New Hire Reporting Program
PO Box 1469
Columbia, SC 29202-1469

Have the following information on hand when you complete the form: 

  • Employer name and address
  • Employer EIN
  • Employee name and address
  • Employee Social Security number
  • Employee date of birth
  • Employee’s first day of work

For further details on South Carolina’s new hire reporting requirements, visit the help webpage on the Department of Social Services New Hire portal.

Set up payroll

Employers must keep their businesses compliant with payroll tax laws. We recommend using payroll software or working with a payroll service provider over running payroll manually, as these options help you save time and avoid costly payroll mistakes. 

Follow the steps outlined in Gusto’s blog post as you set up payroll for the first time. If you’re hiring remote workers, you may want to read our guide on paying out-of-state employees as well. 

Put up labor law posters and notices in the workplace 

All employers are legally required to display certain labor law posters in an area of the workplace that is highly visible to employees, such as in the break room or kitchen. These notices inform workers of the rights they have in the workplace and your responsibilities toward them as their employer. 

The federal government requires employers to hang up the following posters and notices:

South Carolina requires employers in the state to display these posters as well:

Keep in mind that this list isn’t a comprehensive one. You may have additional poster requirements based on your industry, business activities, number of employees, municipality, and other factors.

Find out more about your poster requirements by going to the US Department of Labor website and the SCLLR website

Make better hiring decisions with Gusto

As a small business owner, it’s up to you to make the big decisions for your company. But hiring the right candidate can be difficult if you’re also the one responding to applicants, managing the interview process, and keeping the rest of your business in check.

This is where Gusto’s powerful all-in-one hiring software can help. Features like custom onboarding checklists, offer letter templates, and job post syndication to popular job boards automate your busy work so you can free up your bandwidth and make better hiring decisions. 

Create an account with Gusto today to see how else our platform can help you run your business more efficiently. 

Feli Oliveros Feli Oliveros is a freelance finance and business writer with experience covering personal and small business finance. In 2015 she graduated from UCLA, where she earned her bachelor’s degree in English and minored in Anthropology.
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