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 North Dakota 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 North Dakota
- Can an LLC Hire Employees?
- Laws Relating To Wages Of Employees
- North Dakota Employee Rights
Hiring Employees in North Dakota
In order to hire employees in North Dakota 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 North Dakota
The employers in North Dakota 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 North Dakota. 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 North Dakota New Hire Reporting program
Employers of Business owners are bound by North Dakota’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 North Dakota; 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 North Dakota?
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 North Dakota, 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.
- North Dakota 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 North Dakota 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 North Dakota 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 North Dakota 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
There are no state-mandated labor rules in North Dakota. The state adheres to federal standards that protect employees from discrimination and assure the payment of minimum wage, overtime pay, and the right to family leave, among other things. The Fair Labour Standards Act governs the rules pertaining to employee rights.
- In general, the lowest level of wage (minimum) in the United States is $7.25 per hour which parallelly applies to the employees in the State of North Dakota. The minimum wage rate applies to all employers and employees unless they are exempted by Federal or State law.
- Any type of retaliation and discrimination against employees at work in a range of protected classification is not legal in North Dakota.
- At the end of employment or service, employers in North Dakota must comply with the applicable final pay of the employees.
- Business LLC employers in the State should ensure compliance to every State enforced laws and federal regulations.
Structure of Wages of Employees
North Dakota usually follows the federal wage structure while enforcing provisions to compensate their employees under their basic right to work in the State. We have listed below the main provisions that determine the wage structure of employees in the State of North Dakota.
North Dakota Minimum Wage
Employees in North Dakota LLCs are paid a minimum wage of $7.25 per hour. The nationally mandated minimum wage, determined by the Fair Labor Standards Act, is the same as this sum (FLSA). There are some specific exceptions to the rule of basic minimum wage for the employees.
- Tipped Minimum Wage: Tipped employees in the state might be paid $4.86 per hour if their earned tips and direct compensation for each hour worked equals the state’s regular minimum wage rate. Employers in North Dakota can take advantage of a tip credit of 33% of the normal minimum wage. Employers are allowed to pay a lesser minimum wage of $2.13 per hour under the FLSA, but an employee’s tips and direct income must still satisfy the normal wage rate.
- Trainee: North Dakota’s minimum wage regulations prohibit companies from paying trainees less than the state’s legal minimum wage.
- Student Workers: North Dakota’s minimum wage rules prohibit firms from paying student employees less than 90% of the state’s regular minimum wage.
North Dakota Overtime Wage
If any employee serves more than 40 hours in a working week, then he/she will be eligible to receive additional compensation for each hour they worked over 40 hours in the same week. According to the North Dakota Law, for the additional hours served over 40 hours in the week, the employer should pay the overtime to the covered employees.
Minor children who attend school can work for no more than 3 hours a day during school days. On weekends, children can work up to 8 hours per day. Minors are allowed to work only during the daytime from 7:00 AM to 7:00 PM. Children should not be forced to work beyond 40 hours a week. For children above 16 years of age, no such regulations and restrictions are enforced.
North Dakota Employee Rights
Employee rights should be maintained and followed by all the employers in North Dakota. Be it LLCs or any other types of business structures, employers have to keep these rights in mind while hiring employees.
The North Dakota Human Rights Act (NDHRA) covers employers who employ employees in the state for more than a quarter of the year, as well as employers with one or more employees who work in the state regardless of location. Discrimination based on protected characteristics such as race, color, caste, creed, religion, nationality, handicap, sex, and others is prohibited by the NDHRA.
The Equal Pay for Men and Women Act of North Dakota mandates that men and women be paid equally for comparable labor on occupations with comparable skill, effort, and responsibility requirements. Differences in pay based on an established seniority system, a system that measures earnings based on quantity or quality of production, a merit system, or a bona fide criterion other than gender
An employer should not retaliate against an employee for refusing the employer’s order to perform an action that the employee believes is illegal or if the employee reports a breach or suspected violation of laws or regulations by the employer to the governmental agency, or law enforcement authorities.
Paid Time-off and Sick Pay
In North Dakota, employers are not compelled to provide paid time off or sick pay to their employees. If an employer provides either, they must adhere to the terms of the agreement reached between the employer and the employee.
North Dakota Workforce Safety & Insurance (WSI) is a no-fault insurance state fund that covers workplace injuries and deaths and is funded entirely by employers. WSI’s objective is a safe, secure, and healthy North Dakota workforce as the state’s exclusive supplier and administrator of workers’ compensation.
According to North Dakota law, all employees who leave their jobs for any reason must be paid all final salaries no later than the next regularly scheduled paycheck.
How to Hire Employees Fast in Your North Dakota LLC
To hire employees for your North Dakota 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 thinking about setting up an LLC in North Dakota, you’ll want to take some time to learn about the specific legal and financial requirements you’ll need to meet. In particular, you should pay attention to the tax requirements for your industry. This is important to ensure you’re paying the right amount of tax on your business’s earnings.
The IRS recommends you keep records on your employees and how you pay them. You may also need to purchase workers’ compensation insurance for your employees. Fortunately, there are numerous forms and tools available to help you with this.
One of the most important parts of your business’s bank account is your Employer Identification Number, or EIN. This nine-digit number is assigned by the Internal Revenue Service and is used for both state and federal taxes. You can get your EIN online at the IRS website. Some people choose to use a third-party company to do this for them. However, there are also several manual ways to get your EIN, including mailing it in or using a managed annual report service.
An operating agreement is an important document for your LLC. It provides a structure for the operation of your business and can be very useful in avoiding conflicts between members. Besides the main operations, an operating agreement should also detail the voting and resolution structures of your organization.
As a small business owner, you’ll need to obtain several permits and licenses. Some of the most common are a seller’s permit, which enables you to sell physical products, and a sales and use tax permit, which is necessary if you sell products that are subject to tax. For example, if you sell alcoholic beverages or tobacco, you’ll need a permit from the Department of Revenue.
You’ll also need a Federal Employer Identification Number, or FEIN, which is similar to a social security number for your business. Almost all LLCs in North Dakota will need to report their income annually to the Internal Revenue Service, using Form 1040 – Schedule C. If you don’t file your report, you’ll be liable for a $85 late fee.
Before hiring your first employee, you’ll need to get your business registered with the North Dakota Workforce Commission. You’ll also need to register your new hires with the federal Department of Labor. These are all necessary steps to follow to ensure you hire employees quickly.
You should also make sure you’re following the right payroll tax rules. Most North Dakota LLCs with employees will need to register for employee withholding taxes. Likewise, you’ll need to register for unemployment insurance if you hire employees.
You’ll need to know about the latest in labor laws. Ensure that your employees are protected and paid the minimum wage. Follow the law, and you’ll be able to run a successful business in the state.
Finally, you should consider having a business phone system. A reliable system will improve your customer service and build credibility. Also, you’ll want to have a professional business kit. Having all the right documentation and files in one place can save you a lot of time and headaches down the road.
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.