Hiring Employees in New York LLC – Wages, Laws, Compliance Guide


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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 New York 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. 

Hiring Employees in New York

In order to hire employees in New York LLC, 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 New York

The employers in New York 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 New York. 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 New York New Hire Reporting program

Employers of Business owners are bound by New York’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 New York; 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 New York?

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 New York, 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.
  • New York 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 New York 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 New York 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 New York 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 Employees

The State of New York has several regulations that offer strong protection to the employees working in the State in addition to the federal legislation. Employers are expected to abide by both the legislations. Following below, we shall cover the key regulations guiding labor conduct in the State of New York. An employer should ideally follow both federal and state laws.

  • The minimum wage rate of the employees in New York varies based on their occupation.
  • Employers are not compelled to offer severance compensation to departing employees under New York State labor regulations.
  • When an employee’s employment in New York comes to an end, the employer must pay the relevant final pay.

Structure Of Wages Of Employees

In the following section, we shall cover the employment laws and regulations effective in New York with respect to a minimum wage of employees, leave and absence, overtime compensation, protection against discrimination and retaliation, etc.

New York Minimum Wage

The standard minimum wage rate applicable in New York City is $15.00 per hour. For the rest of New York, the current minimum wage is $13.20. The pay rate in the State varies depending on the place of occupation of the employees. The employers in the State are required to disclose their determined wage rate and the frequency of payment, i.e. pay period. There also exists a certain exception to the standard wage rate, such as:

  • Tipped Employees: Employers in all industries other than building service can meet the minimum wage under New York State law by combining a “cash wage” provided by the employer with a credit or allowance for tips received from consumers.
  • Student learners: The New York minimum mandates that no student learner should receive a subminimum wage below the standard minimum wage. Nevertheless, students working under corporations, charitable or educational foundations are exempted from such requirements.
  • Trainees: New York minimum wage regulations prohibit companies from paying trainees less than the state’s legal minimum wage.

New York Minimum wage

In New York, most employees must be paid one and a half times their usual rate for each hour worked above 40 in a workweek. For an hour completed beyond 44 hours in a week, the domestic employees must also be compensated at the same rate.

Youth Labor

Minors who haven’t turned 18 yet are not permitted to work for more than 8 hours per day, six days a week. Minors aged 14 and 15 are not permitted to work more than 40 hours a week. Working hours for 16 and 17-year-olds are limited to 48 hours a week.

Rights Of Employees In New York

Following are the employee rights every business structure including LLCs must keep in mind.

Anti-discriminatory Rights

Employers in New York are prohibited from discriminating against workers based on certain traits, such as origin, color, race, or religion, under federal and state law.

Whistleblower Protections

The New York False Claims Act, like federal law, permits whistle-blowers to make claims on behalf of state and municipal agencies.

Equal Pay

An employer may not pay an employee with protected class status a wage that is less than the wage paid to an employee without protected class or classes status in the same establishment for similar work on a job that requires equal skill, effort, and responsibility and is performed under similar working conditions; 

Time Off and Leaves of Absence

The state’s Paid Family Leave statute allows qualified employees to take paid time off to cover their family responsibilities, as well as to assist them when a spouse, child, parent, or domestic partner is deployed abroad on military duty. The length of paid family leave given to qualified employees under the state’s Paid Family Leave (PFL) statute has risen from 10 to 12 weeks beginning January 1, 2021.

With respect to sick leave, employers are not obligated to give paid or unpaid sick leave benefits to their employees under New York labor laws. Employers in New York City may be obligated by federal legislation or the Family and Medical Leave Act to give employees unpaid sick leave.

Workplace Safety

The New York Committee for Occupational Safety and Health (NYCOSH) aims to expand and defend everyone’s right to a safe and healthy workplace, based on the idea that workplace injuries, illnesses, and fatalities are avoidable.

Final Pay

Employees whose employment has been terminated must be paid their final salaries no later than the customary payday for the pay period in which they were fired. The company must transmit the final earnings if the employee demands them. An employer must follow a set of probate regulations once an employee dies to appropriately transfer over any payments owing to the dead employee’s estate or survivors.

How to Hire Employees Fast in Your New York LLC

To hire employees for your New York 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.

Adding employees to an LLC is a crucial step in your company’s development. However, this process can be a daunting task. If you’re considering adding employees to your business, take the time to learn about the requirements for hiring, what to expect, and how to go about the process. Getting the details right will save you time, money, and potential headaches down the road.

There are several legal considerations involved in launching an LLC in New York. Depending on the type of business you plan on operating, you may be required to obtain a license from the city, county, or state. The cost of these will vary by location. You may also be required to register your business with the IRS.

First and foremost, you need to decide whether you’re going to hire employees or be an independent contractor. For this purpose, it’s important to know how the term “employee” is defined in the law. Aside from determining if you can afford to hire a new employee, you need to find out what types of employees are suitable for your business. It’s best to make an organizational chart that includes the jobs that you’ll be hiring and the tasks they’ll perform. This will keep you from violating state and federal labor laws.

Fortunately, you don’t need to hire a lawyer to ensure that you’re following the law. In fact, there are several online tools to help you out. These include ZenBusiness Money, which allows you to manage your finances, create invoices, receive payments, and transfer money between accounts. Another option is Fundera, which is a subsidiary of NerdWallet.

If you’re a US citizen, you can obtain an Employer Identification Number (EIN) free of charge. EINs are required for federal and state tax filings. They are also needed to open a bank account and receive payment for services. When you apply for an EIN, you’ll need your Social Security number and an address in the United States.

One of the most basic steps in establishing an LLC in New York is to file the Articles of Organization. To file the articles, you’ll need to provide your name, the county where your business is located, and a mailing address. Next, you’ll want to choose a registered agent. A registered agent is an entity that will act as your LLC’s legal representative. Ideally, your registered agent will have a street address in the state of New York.

Another essential element is a business plan. If you’re just starting your business, a well-written business plan can prove invaluable in helping you identify your goals and objectives and outlining your strategies for success. While a business plan is not mandatory in New York, you should consider using one if it is deemed relevant.

Finally, you’ll need to register your LLC with the New York Department of State. Most businesses in the state have to file an annual fee based on their income. Typically, this amount is anywhere from $25 to $4,500.

FAQs

What Is an LLC?

An LLC is a business entity that can be treated as either a corporation, a partnership, or a sole owner business.

Is the LLC liable for damages caused by employees?

The owners of the company are not personally liable for the actions of the employees, the LLC is liable for any such actions.

What is the IRS Form I-9?

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.

What is LLC self-employment?

LLC members, or LLC owners, are self-employed according to the IRS because they pay themselves through the earnings of LLC.

In Conclusion

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.

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