How to Hire Employees in Virginia: The Complete Compliance Sequence

The first Virginia founder I walked through a first hire had done almost everything right. EIN in hand, offer signed, start date set. What he had not done was look at his job posting again after July 1, and that posting had no pay range on it. In Virginia that is now a statutory violation with a penalty attached, and it happened before the candidate ever replied.

That is the shape of hiring in the Commonwealth right now. The mechanics are ordinary. The sequencing is not, because Virginia moved several obligations earlier in the process than most states put them. Two of the newest rules bite at the posting stage, before you have a candidate, let alone an employee. By the time you are collecting tax forms, the expensive mistakes are already behind you.

I built FirstHR because a founder should not need a compliance calendar in their head to put one person on payroll. What follows is the sequence in the order the work actually happens, with the deadline, the agency, and the dollar figure attached to each step, all verified against Virginia agency sources and the Code of Virginia.

Virginia Hiring at a Glance: Every Deadline in One Place

Every obligation below is enforceable, and each one belongs to a different agency. Read the timeline once before you write a job description, because three of these steps come due before a candidate exists.

The rest of this guide takes each step in turn: what the rule actually says, which office enforces it, and the smallest reliable way to satisfy it when nobody at your company does HR full time.

Step 1: Get Your Federal Employer Identification Number

Nothing else in this sequence works without an EIN. It is the number the IRS uses to identify your business, and Virginia Tax and the Virginia Employment Commission both ask for it on the first screen of their registration. Apply online through the IRS and the number is issued during the session.

If you formed an LLC or corporation and already have an EIN, reuse it. If you have been a sole proprietor filing under your Social Security number, you need one now. Payroll tax reporting cannot run on an SSN, and the state registration will stop at the federal employer identification number field.

Step 2: Register With Virginia Tax and the Virginia Employment Commission

Virginia splits employer registration between two agencies, and both matter before your first payroll. Virginia Tax opens your employer withholding account, because Virginia levies a state income tax that you withhold from every paycheck. The Virginia Employment Commission opens your unemployment insurance account and assigns your tax rate.

The state built one door for both. Register online through the iReg portal and you can open the Virginia Tax withholding account and the VEC unemployment account in a single session. Form R-1 is the paper fallback for businesses that cannot register online. The VEC issues your account number and rate immediately when you register online rather than by mail.

Most first hires trip the $1,500 quarterly threshold in their first month, so treat registration as a pre-hire task rather than a wait-and-see one. Quarterly reports and payments are then due by the last day of the month following each calendar quarter.

New employers pay the base rate on the first $8,000 of each employee wages until the VEC has enough history to calculate an experience rate. Two small add-on charges sit on top of the base rate for most employers, so the number on your rate notice will be slightly higher than the base figure. The state unemployment tax mechanics are the same every quarter once the account exists.

Step 3: Write a Job Posting That Meets the New Virginia Rules

Virginia moved two hiring obligations to the posting stage, and both took effect July 1, 2026. Code of Virginia 40.1-28.7:12 requires you to disclose the wage, salary, or wage range in each public and internal posting for a job, promotion, transfer, or other employment opportunity. There is no employer size exemption in the statute.

The same section prohibits seeking a prospective employee wage or salary history and prohibits relying on that history when you set pay at hire. That second half is the one small employers miss. Even a number a candidate volunteers cannot become the basis for your offer, which means your range has to be built from the role before the first conversation.

The second posting-stage rule is newer still. Virginia record sealing took effect July 1, 2026, and Code of Virginia 19.2-392.15 bars you from requiring an applicant to disclose an arrest, charge, or conviction that has been sealed. If your application asks about criminal history at all, the application itself must include a notice telling the applicant that sealed matters do not have to be disclosed.

A willful violation of that section is a Class 1 misdemeanor for each violation. Virginia still has no general ban-the-box statute for private employers, so you may ask when you like, but the notice is mandatory the moment the question appears. Review your job posting requirements and your application form together, since both live in the same document for most small employers.

Step 4: Verify Work Authorization With Form I-9

Every employer in the United States completes Form I-9 for every new hire, and the two halves carry different deadlines. The employee completes Section 1 on or before the first day of work. You complete Section 2 by the end of the third business day after work begins, examining original documents that establish identity and work authorization.

You cannot tell the employee which documents to bring. The employee chooses from the acceptable documents list, and steering that choice is itself a violation. Record what you are shown, sign, and date. The published inflation-adjusted range for paperwork violations runs from $288 to $2,861 per form, and because it is assessed per form, a handful of sloppy hires compounds quickly.

E-Verify is a separate question, and in Virginia the answer for most small employers is no. Code of Virginia 2.2-4308.2 requires enrollment only from an employer with more than an average of 50 employees over the previous 12 months that signs a contract in excess of $50,000 with a state agency. Failing that requirement can bar the employer from state contracts for up to 12 months. Everyone else relies on I-9 documentation alone.

Step 5: Collect Form W-4 and Virginia Form VA-4

Virginia has a state income tax, so your new hire completes two withholding certificates rather than one. The federal Form W-4 sets federal withholding. Virginia Form VA-4, the Employee Virginia Income Tax Withholding Exemption Certificate, sets state withholding, and Virginia Tax instructs employers to obtain one from each employee on the date employment begins.

If either form is missing when the first paycheck runs, you withhold at the default: no exemptions, highest rate. That is legal, but it produces an unhappy first payday and a correction request, which is a bad way to spend week one. Collect both forms with the offer packet instead.

Step 6: File the New Hire Report Within 20 Days

Virginia gives you 20 days. Code of Virginia 63.2-1946 requires each employing unit to report every newly hired or rehired employee to the Virginia New Hire Reporting Center within 20 days of the employment, and every new independent contractor within 20 days of the start of the contract. The Virginia Department of Social Services runs the program.

The clock starts on the first day the person performs services for wages. You report your business name, address, and federal employer identification number, plus the employee name, address, and Social Security number. The statute expressly allows you to satisfy the requirement by transmitting a copy of the W-4 or the contractor W-9, which is why filing on the same day you finish the tax forms is the least error-prone habit.

Step 7: Secure Workers Compensation Coverage

Workers compensation in Virginia is mandatory, not elective, and it turns on at more than two employees. The Virginia Workers Compensation Commission requires any employer who regularly employs more than two part-time or full-time employees to carry coverage, and it publishes no waiver or exemption form for a small employer to file.

The count is broader than most founders expect. Part-time, seasonal, and temporary workers count. So do minors, family members who perform work, corporate officers, LLC managers, and workers for churches, charities, and nonprofits. If you hire subcontractors to help perform your trade or complete a contract, their employees are added to your total.

Calling someone a 1099 contractor does not remove them from the count. The Commission looks at the real working relationship and the degree of control, not the label on the invoice. The practical rule for a growing team: recount your workers every time you add one, and bind workers compensation coverage before the person who crosses the threshold starts work.

Step 8: Post the Required Federal and Virginia Notices

The Department of Labor and Industry lists eight required state notices in addition to the federal set, and they come from four different agencies. One of the eight, the human trafficking notice, applies only to truck stops and adult entertainment businesses under Code of Virginia 40.1-11.3. Every poster on the list is free to download, so nobody needs to buy a laminated compliance kit.

Download the current versions from the Virginia Department of Labor and Industry and post them where employees can actually see them before anyone starts work. The department also publishes a Virginia Minimum Wage Notice, which it lists as optional rather than required, and reissues it each year as the rate changes.

Step 9: Run a Structured First Ninety Days

Compliance gets someone onto payroll legally. Onboarding decides whether the hire was worth making. The Work Institute reports that over one third of newly hired employees quit within their first year, which puts the entire risk of a first hire inside the window most small employers plan the least.

This is the part FirstHR was built to absorb. The offer goes out with built-in e-signature, the I-9, W-4, and VA-4 come back before Day 1, the third-business-day and twenty-day deadlines arrive as tasks rather than as memories, and the AI onboarding wizard turns the job description into a 30-60-90 day plan instead of a blank document.

Virginia-Specific Rules That Change How You Hire

Virginia rewrote a large share of its employment code in a short span, and the changes land on hiring rather than on termination. The rules below are the ones that alter a first hire in the Commonwealth compared with a neighboring state. The Virginia compliance hub covers the full statutory picture.

Two of those deserve a second look before you write an offer letter. The Virginia Human Rights Act now defines a covered employer as one with five or more employees for each working day in 20 or more calendar weeks, down from fifteen, and the filing window for a complaint stretched from 300 days to two years. A first hire can move a business inside that definition faster than founders expect.

The second is the non-compete rule. Code of Virginia 40.1-28.7:8 voids non-competes for low-wage employees, and the definition of that group now includes any employee entitled to overtime under the Fair Labor Standards Act, whatever they earn. Writing a boilerplate non-compete into a first offer letter is, for most hourly and non-exempt roles, writing an unenforceable clause.

City and County Rules: Why the Local Ordinance Search Comes Up Empty

Virginia localities cannot set their own minimum wage or paid leave mandates, so there is no Arlington wage floor, no Richmond sick leave ordinance, and no Virginia Beach scheduling law to research. Virginia follows the Dillon Rule, meaning a locality holds only the powers the General Assembly has expressly granted it, and wage and leave mandates are not among them.

That makes Virginia unusually simple for multi-site employers. A restaurant group operating in Alexandria, Roanoke, and Norfolk applies one wage rate, one leave framework, and one set of posting rules across all three. Compare that with a state where each metro adds its own ordinance layer and the compliance overhead is a different job entirely.

One local layer does exist. Code of Virginia 15.2-965 lets a locality enact an ordinance establishing a local commission on human rights with the powers and duties granted by the Virginia Human Rights Act, and several Virginia localities have done exactly that. If you operate in a locality with a commission, find out which one covers your worksite before you need to know.

Employee or Contractor: Virginia Starts From the Presumption of Employment

Virginia flipped the burden of proof. Since January 1, 2021, an individual performing services for an employer for remuneration is presumed to be an employee unless the business shows the individual is an independent contractor under Internal Revenue Service guidelines. The Department of Taxation makes that determination, applying the IRS factors.

The penalty ladder in Code of Virginia 58.1-1901 runs up to $1,000 per misclassified individual for a first offense, up to $2,500 for a second, and up to $5,000 for a third or subsequent offense, on top of the taxes, benefits, and contributions that should have been paid. All misclassifications made at the same time, or within 72 hours, count as a single offense.

Two Virginia wrinkles make the stakes higher than the tax penalty suggests. The Workers Compensation Commission counts workers by the real relationship, so a misclassified contractor can quietly push you over the coverage threshold. And a worker who is actually an employee is also covered by the Virginia Human Rights Act. Read the employee versus contractor distinction before you write the agreement, not after the first invoice.

The Mistakes That Cost Virginia Employers the Most

These are the errors that turn a routine first hire into an expensive one. Every one of them is a process failure rather than a knowledge failure, which is why they keep happening to founders who have read the rules.

The pattern is consistent. Nobody forgets that the I-9 exists. They forget on the third business day, while shipping something. Nobody decides to omit a pay range on purpose. They reuse a posting template written before July. The fix is almost never more compliance knowledge; it is a checklist that fires on its own. The same logic applies to hiring your first employee anywhere, but Virginia front-loads more of the risk than most states do.

One last operational note: keep pay records. The Commonwealth requires a written pay statement for every payment showing hours, rate, gross wages, and each deduction, and Code of Virginia 40.1-29 tells you to keep those paystubs or the online accounting for at least three years after the date of the work performed. Your Virginia payroll setup should produce them automatically rather than on request.

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