When you talk about tax crimes and labor laws, it’s easy to get confused. If you’re a small-business owner, you might have never thought about all the legal and tax implications of hiring new staff. But, now that your business is flourishing, it’s time to consider adding to your one-person operation.

Before you consider adding employees, you need to understand the responsibilities of being an employer. You’re not exempt from violating laws and serving jail time. We thought we’d help you out, so we compiled a list of three things you need to know before you start the onboarding process.

Set up a Payroll Tax System :

As a one-person business, you’ve only had to pay for yourself. At the end of the year, you take your information to your accountant, and they do your taxes. Well, this process changes once you start hiring employees. Payroll taxes are taxes paid on the wages and salaries of employees. This means that you will withhold a percentage of their income and pay the withheld taxes to the IRS. Then every January of the following year, you will send an IRS Form W-2 to each employee.

Some business owners use IRS tax money provisionally for other business expenses and try to pay it back quickly. Our advice to you is, don’t use tax money for other business purposes. In 2015, payroll taxes accounted for $1 trillion in revenue for the IRS. That’s some serious cash, so it only makes sense that the IRS imposes strict laws. Evasion of employment taxes can have serious consequences like criminal and civil penalties.

Don’t worry if the payroll tax system is confusing. There are resources available to help small businesses with payroll services.

Don’t Forget to Post Labor Information :

If an expansion of your business includes bringing employees to work at a specific location, be clear about posting requirements. The U.S. Department of Labor requires that employers post information about specific requirements of certain labor acts. The labor posters must be visible for all employees to see.

There’s more than one poster that must be posted. This includes the Fair Labor Standards Act Minimum Wage and Workplace Safety poster. Posters come in both English and Spanish versions, and the Department of Labor provides them at no cost to employers. You can go to its website and download the posters.

Keep in mind that many states have posting requirements that exceed the Fair Labor Standards Act requirements.

Assure Unemployment Insurance for all Employees :

You’ll be required to pay federal unemployment taxes which will provide benefits to employees who’ve lost their jobs. Employees do not contribute to this tax. This tax is mandated by the Federal Unemployment Tax Act, so all employers pay. However, there are some exceptions like for employers with 501(c)(3)status. Also note that, in addition to federal unemployment taxes, some states require you to pay state unemployment taxes.

If you understand the legal implications before you hire an employee, you’ll be fine.  If something isn’t clear, consult a professional to help you understand your legal obligations.

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