Becoming an employer in thirty days: the workers' compensation switch, the EDD account, the new-hire report, the I-9, and the order to do them in
In one paragraph
Between the handshake and the first paycheck there are six filings with four agencies, and the order matters because one of them can suspend your license the day you get it wrong. This lesson puts them in sequence: workers' compensation coverage bound and the certificate filed with CSLB before the first hour of work, because the no-employee exemption dies the moment you have an employee and employing on an exemption is a $10,000 minimum penalty; the EDD employer account within 15 days of paying more than $100 in a quarter; the I-9 within three business days of the first day; the new-hire report within 20 days; state withholding from the first check; and the written injury prevention program and hire notice that must already exist. It also gives the price of not insuring at all: a misdemeanor with a fine of at least $10,000, a stop order, and $1,500 per employee or double the premium.
The rule
Every employer must secure workers' compensation (Labor Code 3700), and failing to do so is a misdemeanor punishable by a fine of double the unpaid premium and not less than $10,000 (3700.5(a)) plus a stop-order penalty of $1,500 per employee or twice the premium (3722); for a licensee, a certificate in the business name is a condition of the license, the no-employee exemption is void once there is an employee, employing after an exemption without first filing a certificate carries a minimum civil penalty of $10,000 for a sole owner or $20,000 for an entity, and the license is suspended by operation of law from the day coverage was first required (B&P 7125, 7125.2, 7125.4). Register with EDD within 15 days of paying more than $100 in wages in a quarter (UIC 675, 1086), report each new hire within 20 days (1088.5), withhold state income tax from the first check (13020), and complete Form I-9 Section 2 within three business days of the first day of work (USCIS).
Why it matters
The first hire is where the Phase 0 workers' compensation lesson becomes real: the exemption you filed with your application stops being true on the helper's first morning, and the law does not wait for you to notice. Everything else in this lesson is a form with a deadline; workers' compensation is a suspension with a date. Do it first, do it before, and the rest of the month is paperwork.