Hiring Your First Employee in Missouri: What You Actually Owe in 2026
Revised July 28, 2026
What do you actually owe when you hire your first employee in Missouri?
Four things Missouri requires that national checklists miss. Minimum wage is $15.00/hr (since Jan 1, 2026). You do NOT owe statewide paid sick leave — Proposition A created it, but HB 567 repealed it effective Aug 28, 2025, and most guides still say otherwise. Workers’ comp starts at 5 employees — but at just 1 in construction. And you must report the hire to the Missouri State Directory of New Hires within 20 days (RSMo 285.300), which includes rehires returning after 60+ days away. ⚠️ Calling an employee a 1099 contractor to skip all this is the most expensive mistake available to a new employer.
Keep reading ↓What do you actually owe when you hire your first employee in Missouri?
Search this and you will get a very reasonable national checklist — EIN, W-4, I-9, payroll, workers’ comp. Page one right now is the SBA, Indeed, Reddit, a California coach, and a Michigan nonprofit. All fine. None of it tells you what Missouri requires, and Missouri has changed twice in the last two years in ways that catch employers out.
The short version, current as of today:
- Minimum wage is $15.00 an hour, effective January 1, 2026.
- You do not owe statewide paid sick leave. That mandate was repealed. A great deal of advice still says otherwise.
- Workers’ comp kicks in at five employees — unless you are in construction, where it is one.
- You must report the hire to the state within 20 days. Most first-time employers have never heard of this one.
The paid sick leave whiplash, explained once
This is worth getting straight, because employers are still being told to budget for something they no longer owe.
In November 2024, Missouri voters passed Proposition A. It did two things: raised the minimum wage on a schedule toward $15, and created a statewide paid sick leave mandate — an hour of paid sick time for every 30 hours worked.
Then the legislature undid much of it. House Bill 567 was signed on July 10, 2025 and took effect August 28, 2025. It repealed the paid sick leave mandate, which employers were only obligated to provide through August 27, 2025, and it removed the inflation-indexed raises that would have begun in 2027.
What survived: the $15.00 minimum wage that took effect January 1, 2026.
So the accurate position today is: pay at least $15.00, owe no statewide sick leave, and expect no automatic annual increase after this one. Any guide written between late 2024 and mid-2025 — which is most of what is still ranking — will tell you something different. You can of course offer paid sick leave; plenty of employers do, and it competes well for staff. You are simply not required to.
Workers’ comp: the number that changes everything if you are in the trades
Missouri sets the threshold at five or more employees. Under five, most employers are not required to carry workers’ compensation insurance.
Construction is the exception, and it is a big one: one employee triggers it. If you run a roofing, framing, concrete, electrical, plumbing or general contracting operation and you hire a single person, you need coverage from that hire — not from your fifth.
Given how much of the metro’s small-business economy is trades, this is the single most commonly missed obligation on this page. It pairs with a reality we covered separately: Missouri does not license contractors at the state level, so nobody checks your insurance at a licensing desk. That does not make the requirement optional; it just means the discovery happens after an injury instead of before.
One deadline to file away now rather than later: once covered, a work injury must be reported to your insurer within five days of the injury or of the employee telling you, whichever comes later.
The 20-day rule nobody warns you about
Here is the requirement first-time employers almost never see coming, because it has nothing to do with taxes or insurance.
Under RSMo 285.300, every Missouri employer must report each newly hired or rehired employee to the Missouri State Directory of New Hires within 20 days of their start date. It runs through the Department of Social Services, and the purpose is child-support enforcement — locating parents and establishing orders.
Two details that trip people:
- Rehires count. A seasonal worker returning after being separated for 60 or more consecutive days is a new hire for this purpose. Restaurants, landscapers and shops with a winter lull hit this constantly.
- It is not payroll. Running payroll software does not automatically satisfy it unless that provider files on your behalf — ask them directly rather than assuming.
Reporting is free and takes minutes through the state’s employer portal at missouriemployer.dss.mo.gov, or by phone at 888-663-6751.
The registrations, in the order that avoids backtracking
Nothing here is difficult; it is just spread across three governments.
1. Federal EIN from the IRS — free, same day, online. You need it before payroll exists.
2. Employer withholding with the Missouri Department of Revenue. If you already registered for sales tax, this is the same registration system and you can add withholding to your existing account. Our guide to the Missouri sales tax license covers that portal.
3. Unemployment insurance with the Missouri Division of Employment Security. Rates for new employers change periodically, so get your assigned rate from them rather than from an article.
4. Workers’ compensation, at the threshold that applies to you — five employees generally, one in construction.
5. Payroll. Software or an accountant. For one employee, the software is usually cheaper than the first mistake.
Day-one paperwork
Three documents, and two of them are federal:
- Form W-4 — federal withholding. Missouri also has its own withholding certificate for state tax.
- Form I-9 — identity and work authorization. There is a deadline: complete it within three business days of the start date, and keep it on file. You do not send it anywhere.
- A written offer stating the wage, the title, the schedule, and the start date. Missouri is an at-will state, but “at will” does not mean “unwritten” — most first-hire disputes are about what someone believed they were promised.
Employee or contractor? Get this one right
The tempting move with a first hire is to call them a 1099 contractor and skip everything above. It is also the most expensive mistake available to a new employer.
The test is control, not paperwork. If you set their hours, direct how the work is done, supply the tools, and they work only for you, they look like an employee no matter what the agreement says. Getting it wrong exposes you to back taxes, penalties, and — if someone gets hurt — an uninsured injury claim, because a misclassified worker was never on a workers’ comp policy.
Genuine contractors exist and are perfectly legitimate. If you are unsure which you have, that is a specific question for an accountant, and it is much cheaper to ask before the hire than after an audit.
Where St. Louis employers actually find people
The compliance side is the part with deadlines. Finding the person is the part that takes longer than anyone plans for, and a first hire is unusually hard because you have no reputation as an employer yet — nobody has worked for you and told anyone what it was like.
What tends to work for a first hire in this metro, roughly in order of hit rate:
The people already around you. Customers, suppliers, the person who does your books, other owners on your block. A first hire is a trust hire; you are going to be alone in a van or behind a counter with this person. A name from someone you already trust outperforms a stranger from a job board almost every time.
Trade schools and community colleges, if the work is skilled. St. Louis Community College and the region’s apprenticeship programs graduate people specifically looking for a first employer, and their career offices will post a role for free. We wrote about the local pipeline in our guide to trade schools and apprenticeships in St. Louis.
Your own front window and your own customers. Underrated and free. People who already like your business are a warmer applicant pool than a job board delivers, and they show up already knowing what you sell.
Neighborhood-level channels — the community groups and neighborhood pages where people actually talk. A role posted where someone in Maplewood or Florissant already reads is worth more than the same role buried on a national site alongside a thousand others.
One thing worth knowing before you post anywhere: candidates look you up. They read your reviews and look at your photos before they apply, the same way customers do — and a business that is hard to find or looks abandoned online gets fewer and worse applicants. Your visibility is doing recruiting work whether or not you meant it to.
Be specific in the posting, too. “Competitive pay” reads as evasive when the state floor is $15.00 and everyone knows it. Naming the wage, the hours, and whether the schedule is fixed will filter your applicants better than any screening question.
A first-hire sequence for a St. Louis business
- Decide employee vs contractor, honestly.
- Get the EIN.
- Register withholding with the Department of Revenue and unemployment with Employment Security.
- Get workers’ comp if you are in construction, or if this hire puts you at five.
- Set up payroll and confirm whether it files new-hire reports for you.
- Written offer at $15.00/hr or better.
- W-4 and I-9 on day one; I-9 completed within three business days.
- Report the hire within 20 days.
Then the part no checklist covers: you now have someone whose rent depends on your revenue being steady. That changes how much a quiet week costs you, which is why most owners find that the hire and the marketing problem arrive in the same month.
Frequently asked questions
What do I need to do to hire my first employee?
Get a federal EIN, register for employer withholding with the Missouri Department of Revenue and unemployment insurance with the Division of Employment Security, obtain workers’ compensation if it applies to you, set up payroll, collect a W-4 and I-9, and report the hire to the Missouri State Directory of New Hires within 20 days. Pay at least $15.00 an hour.
Do I need an LLC to hire employees?
No. A sole proprietor can hire W-2 employees without forming an LLC or corporation — you just need the EIN and the registrations above. An LLC changes your liability exposure, not your ability to employ people. Since hiring adds real risk, it is a reasonable moment to revisit the question, but it is not a prerequisite.
Does Missouri require paid sick leave?
Not anymore. Proposition A created a statewide paid sick leave mandate, but House Bill 567 repealed it effective August 28, 2025 — employers were obligated only through August 27, 2025. Guides written in that window still say it is required. You may offer it voluntarily, and many employers do because it helps them compete for staff.
When does a Missouri business need workers' compensation?
At five or more employees for most employers — but at one or more if you are a construction contractor. That exception catches a lot of trades businesses making a first hire. Once covered, report any work injury to your insurer within five days of the injury or of being told about it, whichever is later.
How to hire someone for the first time?
Define the role and the hours before you advertise, decide honestly whether it is an employee or a contractor, complete the registrations, then make a written offer stating wage, title, schedule and start date. Missouri is an at-will state, but most first-hire disputes come from things that were said rather than written.
How much does it cost to hire your first employee?
Beyond wages at $15.00 an hour or more, budget for the employer share of payroll taxes, unemployment insurance, workers’ compensation if it applies, and payroll software. The registrations themselves are free. Costs vary enough by industry — a roofer and a bookkeeper are not comparable on comp premiums — that you should get real quotes rather than trust an average.
A first hire changes the math on a slow week. Payroll arrives whether or not the phone did. That is usually the month owners discover that being registered, insured and compliant does nothing to make them findable — and the two problems land together. Listing your business takes a few minutes. Since candidates research you the same way customers do, keeping that profile current is recruiting work too — which is the job of Google Business Profile management.
The rest of the setup: what licensing you actually need, the sales tax license, and what it costs to start. Or browse local pros on St Louis Near Me Directory.
Candidates read your reviews before they apply, same as customers do — so it helps to know what you can actually do about a bad one.
Payroll changes the bookkeeping too: here is what that help costs.
Workers’ comp is only part of it — here is what Missouri actually requires you to insure, and what your landlord and clients require instead.
Written by a dedicated team of St. Louis locals who live, work, and play right here in the St. Louis metro. Founder Lane Forman and team are committed to building the region’s most trusted directory by verifying listings and connecting local businesses with loyal customers across Missouri and Illinois.