Your business is growing and now you need additional staff. Sounds like good news, right? The bad news is if you hurry into this growth phase without doing your homework, you may get into trouble.

Hiring employees requires you to follow many new state and federal regulations. Adhering to these laws may seem like a pain but failing to do so can cause much greater headaches.

I turned to Joy Hallof, the human resources consultant at the Small Business Development Center, to ensure that I have the most up-to-date hiring information.

"Many of the clients assigned to me by the Central Coast Small Business Development Center are just beginning that employer-employee relationship," she said.

Before you hire your first employee, many details need to be taken care of. Answer these questions:

• Have you requested and received your Employer Identification Number?
• Have you registered with the Employment Development Department?
• Have you implemented a workers' compensation policy?
• How will you meet the payroll recording requirements?
• Do you have an injury/illness prevention plan ready?
• Do you have an employee leave and other time-off provisions in place?
• Have you posted the necessary posters and advisories?

"These, and many more questions, need to be answered prior to taking that first step," Hallof said.

For a business with less than five employees, there are 13 items to implement to stay compliant with state and federal regulations. If you need to hire an employee for only a brief time, perhaps there are other ways of meeting that need. Outsourcing using employees from a temporary agency, or using an independent contractor may be a more cost-effective alternative. Make sure you follow the IRS rules on employees vs. independent contractors.

As your business expands, you may be relying on employees to act on your behalf and possibly manage the business in your absence. Before you expand operations where you will not be present, put in writing some of the practices currently in place. Your employee policies and procedures manual will be a vital tool, not only as a management guideline, but to protect your business as well.

Many of the clients calling the SBDC have general questions regarding new hires, compliance issues and termination and leave questions. Frequently, the questions lead to the recommendation that an HR audit be performed. This audit can reveal compliance issues, gaps in your policies and procedures, and other areas that may require attention. The Small Business Development Center recommends an overall HR Audit be conducted to see what may be needed in the current operation prior to any business expansion.

A small business owner who is ready to expand and add employees may be unaware of issues that could be costly. But help is available, at no charge, to make sure the growth leads to increased profitability.

The Small Business Development Center invites new and existing employers to a seminar presented by the Employer Advisory Council of Santa Cruz County on complying with laws on human resources documentation and recordkeeping. This low-cost workshop will be Dec. 13, from 7:30 to 10:30 a.m. at the Seascape Golf Club. To register, call Kathy Hoyt at the Employer Advisory Council, 464-6275. For general assistance with your small businesses' personnel challenges, call the Central Coast Small Business Development Center, 479-6136.

Teresa Thomae is director of the Central Coast Small Business Development Center at Cabrillo College. E-mail questions to her at sbdc@cabrillo.edu.