Any business structure or corporation stands firm on its foundation laid by the employees. An LLC is no exception to this rule. Hiring employees in your LLC comes with some rules, regulations. Before understanding the rules of hiring employees in Connecticut LLC, we must understand what an LLC means.
A Limited Liability Company is a business structure that protects the owners from any personal responsibility of the debts or liabilities arising out of the LLC. If an employee action succeeds to liabilities, the owners get the protection against it. LLCs are a combination of the characteristics of a partnership firm & a sole proprietorship.
On this page, you’ll learn about the following:
- Hiring Employees in Connecticut
- Can an LLC Hire Employees?
- Laws Relating to Wages of Employee
- Employee Rights in Connecticut
Hiring Employees in Connecticut
In order to hire employees in LLC in CT(Connecticut), there are many requirements that a business has to fulfill. One should keep these points in mind while hiring employees in an LLC. These requirements include:
1. Federal & State Employment posters in Connecticut
The employers in Connecticut are required to show both Federal & State Employment posters mentioned in Equal Employment Opportunities Act, Americans with Disabilities Act, Fair Labour Standards Act (FLSA), etc. You should seek professional help to fulfill all the norms or requirements.
2. Federal & State Required Forms
Hiring employees is a lengthier process that involves the filing of different forms & applications. Suppose you wish to hire employees in Connecticut. In that case, you must ask your employees to submit the Employment Eligibility Form, the Federal Tax withholding form, the W-4 Form, Workers Compensation Claim Form, Disability Self- Identification Form, U.S. Citizenship and Immigration Services Form, etc. These Legal forms are easy and free to download.
3. Requirements of Connecticut New Hire Reporting program
Employers of Business owners are bound by Connecticut’s New Hire Reporting Program, under which they have to submit a report consisting:
- Company Name
- Company Address
- Company federal tax ID number
- Employee’s Name
- Employee’s Social Security Number
- Employee’s Address
- First Day of paid Work
In addition to the forms mentioned above, payments, taxes, tax forms, & requirements, there may be some additional compliance for hiring in Connecticut (specifically); you must adhere to those norms as well.
Can an LLC Hire Employees?
An LLC or a Limited Liability Company can be regarded as a corporation, partnership, or sole owner business. The owners of the LLC are often referred to as members. Individuals, Corporations &, in some cases, other LLCs can form an LLC as members.
The members form LLCs because of their limited or no liability provided to the owners or members. In the event of liabilities arising out of an employee’s action, the members of the LLC are not personally liable- the LLC is liable for the actionable claim.
Any LLC (even one with a single owner) can hire unlimited employees on wages or salary. (The single-member owner LLC may have different rules and regulations). In addition to the salaried employees, the LLC can appoint Independent contractors for certain tasks on a contract basis.
Rules to Hire Employees in an LLC in Connecticut?
Just like any other business corporation, an LLC is also not immune from certain procedures & rules of hiring. An LLC files many documents & pays a number of taxes to various Government Agencies while hiring employees. Some of the essential rules or steps to hire employees in an LLC are:
- Federal Employer Identification Number – Every LLC must obtain an Employer Identification Number (EIN) from the Internal Revenue Service. EIN helps report taxes & a few other documents to the IRS.
- Employee Eligibility Form – It is mandatory for an LLC owner to check if the employee is eligible for employment in the U.S. An LLC has to ask the employees to submit the I-9, Employment Eligibility Verification Form to verify the identity of the employee & to authorize the employment. the I-9 form is a mandatory requirement while hiring an employee.
- Employee’s Social Security Number – The employee has to have a valid Social Security Number (SSN) to work. LLCs have to ask the new employees to submit their SSN before employment. The SSN is helpful in payment & tax purposes.
- Setting up a process for collection & payment of the appropriate taxes – There has to be a due process for the employees’ future collection & payment of taxes. This process needs to be set up by the employer (in this case, the LLC)
- Employee handbook – In the hiring process, one of the crucial elements of hiring paperwork is an Employee Handbook. Although it is not essential in Connecticut, it is usually needed as one of the legal documents in many other states. An Employee Handbook consists of a complete list of all the basic rules & policies of the company.
- Connecticut payroll Taxes – An LLC that is running a business with employees or businesses with employees has to pay many federal taxes & state Taxes. Following the rules on payroll taxes is also an essential requirement. After hiring employees, an LLC is subject to the State Unemployment Compensation Act. Under the said Act, an LLC will have to pay Unemployment tax to the state & to do that; the LLC must register itself with the Connecticut Workforce Commission. The process involves simple steps & can be completed in 20 minutes.
Payroll taxes also include Federal Income Tax withholding, an employer can withhold money from the employee’s account for the income tax.
- Workers’ Compensation Insurance An LLC operating in the state of Connecticut has to carry workers’ compensation insurance & has to display relevant posters.
- New Hire Report or Report of the New Employee – An LLC has to
- Report about hiring the new employees in the form of “Report of New Employee(s)” to the Connecticut Workforce Commission within 20 days from the date of hire.
- Deposit and report federal employment taxes as per the IRS procedures for payroll reporting & payment.
Laws Relating to Wages of Employee
Connecticut law gives employees more protection than federal law, such as pregnancy accommodations, a higher minimum wage, and paid sick leave, but it generally follows federal law on topics like overtime pay, jury duty leave, and military leave.
- The current basic minimum wage in Connecticut is $13.00 per hour.
- Employees in Connecticut are entitled to leave or time off for a variety of reasons, including family and medical leave, paid sick leave, pregnant disability leave, family violence leave, and military leave.
- Employers in the State are also expected to comply with appropriate municipal law duties impacting the employment relationship.
- The LLCs have to adhere to all the responsibilities as established under the federal and State labour laws.
Structure Of The Wages Of The Employee
The Fair Labor Standards Act contains the federal wage and hour laws. This federal statute establishes minimum wage and hour rules across the United States. A state, for example, can only establish its own minimum wage law if it mandates that companies pay more than the FLSA mandates. Because Connecticut has its own wage and hour rules, LLCs in the state must follow both state and federal guidelines.
The minimum wage in Connecticut is greater than the federal minimum wage. With few exclusions, the state minimum wage is now $13.00 per hour. The wage is increased by $1 every year on July 1.
For tipped employees, any employee who receives at least $10 per week for their full-time employees or $2.00 per day for their part-time occupation is considered a tipped employee.
For any hours worked in excess of 40 hours in a workweek, Connecticut law requires an employer to pay covered employees’ overtime at one and one-half times the standard rate. The Federal regulations shall become applicable in case it is more beneficial to the interests of the employees.
The employment of minors is regulated by both federal and state regulations. When federal and state child labor restrictions conflict, a stronger statute must be used. The Fair Labor Standards Act (FLSA) establishes minimum age limits for young people seeking work, as well as employment restrictions for those under the age of 18.
Working is normally forbidden for children and youth under the age of 14 unless one of a few exceptions applies, such as being employed by parents in non-hazardous jobs, acting or performing as an actor or performer, etc.
Employees who work at least seven and a half hours must be provided with an unpaid meal time of at least 30 minutes, according to Connecticut law.
Employee Rights in Connecticut
Here are some of the employee rights LLCs and businesses have to follow in Connecticut,
Right to Work and Wage Rights
Employees in Connecticut have the right to receive fair wages. The federal regulations also guide the compensation structure under the Minimum Wage Standards. Employers should not pay salaries below the levels determined under the Federal Minimum Wages.
Leave of Absence
In accordance with the Family and Medical Leave Act, the eligible employees have the right to take leave for medical and family reasons. Such leave is job-protected and any violation by the employer can attract legal actions.
Employers with 75 or more workers in Connecticut must give eligible employees a total of 16 workweeks of job-protected leave for qualified reasons throughout any 24-month period under the Connecticut Family and Medical Leave Act (CFMLA).
Upon termination of employment, the employees are eligible to receive certain unemployment benefits from their employers.
Protection against Discrimination
The employers shall ensure that there exists no practice of discrimination or harassment between the employees at the workplace. The employees have the right to bring claims for legal action against any such incidents.
In the event of an injury or fatality resulting from an unsafe workplace, the employee can approach the Occupation Health and Safety Administration to take action against the employer. The employees can also seek compensation for the losses incurred due to workplace injuries.
Right to Receive Final Pay
If an employee is fired, earnings are due the following business day; if the employee is laid off, quits, or is suspended as a consequence of a labor dispute, payments are due till the next normal payday. Wages due to a dead employee must usually be paid to the surviving spouse or estate conservator.
How to Hire Employees Fast in Your Connecticut LLC
To hire employees for your Connecticut LLC you need to verify if the person is eligible to work in the US and then report him/her as ‘new hires’ to the state.
If you are planning to start a Connecticut LLC, you have to follow certain laws. Not only must you register with the state, but you must also comply with federal and local labor laws. This includes filing an annual report. The best way to do this is to hire a professional service that handles government filings on your behalf.
When you first start your business, you will need to register with the Department of Revenue Services and obtain your Employer Identification Number. These two important items will allow you to file taxes and report to the IRS. In addition, you will need a registered agent for your LLC. A registered agent is an individual or corporation that receives important documents and legal notices for the company.
The state of Connecticut has a business license lookup tool that you can use to determine if you need a license. You may also need to register for a sales or payroll tax permit. For example, if you have employees, you will have to pay state unemployment taxes.
The most important aspect of any business is the people involved. Whether you are hiring a new employee or you are looking for an independent contractor, the first step to a successful venture is finding the right team. Hiring a team can be expensive, but it can also be a cost effective investment. There are many benefits to hiring team members. Having a great compensation package can help you attract top talent.
Another important part of hiring employees in Connecticut is reporting them to the state. Using the DOL’s online system can make this process easy. It is a simple step-by-step procedure that takes only 20 minutes to complete. However, you will need to fill out forms to verify that your new employees are eligible to work for you.
Besides having a good name, the name of your Connecticut LLC needs to be unique. Your LLC may not use words that might confuse it with other businesses or governmental agencies. Also, your name must contain the phrase “limited liability company” or some other abbreviation.
You can get your LLC started in Connecticut by filing a certificate of organization with the Secretary of State. You can either go to the office to apply, or you can use the state’s online application service. Both options take about three to five days to complete. Depending on your preference, you can also purchase expedited processing for a fee. This option will speed up the processing of your application and save you time.
Another important piece of paperwork is the Employee Handbook. Often considered a required document in most states, the Employee Handbook is a comprehensive list of company policies. Although it might seem like an unnecessary item, the Employee Handbook is a helpful guide to the rules and regulations involved with hiring.
Using a registered agent is a must for your Connecticut LLC. A professional service will handle all of the government filings for your company, and they will accept correspondence from the Secretary of State on your behalf.
An LLC is a business entity that can be treated as either a corporation, a partnership, or a sole owner business.
The owners of the company are not personally liable for the actions of the employees, the LLC is liable for any such actions.
Before hiring an employee, under federal law, the business has to verify an employee’s eligibility to work in the United States with the (IRS Form I-9). The business owner also has to make sure the employee has a valid SSN or Social Security Number.
LLC members, or LLC owners, are self-employed according to the IRS because they pay themselves through the earnings of LLC.
All the LLCs with employees are bound by many rules and regulations with reference to wages. It is always advisable to register a registered agent service to understand the laws better. Feel free to share your feedback with us in the comment section below.