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 Alaska 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 Alaska
- Can an LLC Hire Employees?
- Laws Relating to Wages Of Employees
- Alaska Employee Rights
Hiring Employees in Alaska
In order to hire employees in Alaska 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 Alaska
The employers in Alaska 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 Alaska. 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 Alaska New Hire Reporting program
Employers of Business owners are bound by Alaska’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 Alaska (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 Alaska?
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 Alaska, 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.
- Alaska 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 Alaska 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 Alaska 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 Alaska 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
Alaska generally follows federal law on the topics involving employer-employee framework, such as a higher minimum wage. The State laws provide further assistance in ensuring greater rights to the employees than the federal laws.
- The minimum wage is estimated at the rate of $10.34 per hour. The Alaska labour laws guarantee protection to their workers in terms of their efforts and are protected from unfair and unethical practices.
- In addition to the regular wage, the State has an established practice to compensate the workers if they work for more than 8 hours in a day or for more than 40 hours in a week.
- Alaska labour laws involve enforcing minimum wage and overtime requirements, as well as child labour laws, “right to return” transportation, public contract laws, and oversight of private employment agency administration and licencing.
- In pursuance of legal compliance with different labor standards, an employer must also adhere to different municipal law duties impacting the employment relationship.
Structure of The Wages of The Employees
The State of Alaska enforces both federal and state laws to be followed by an employer. To assist employers in understanding the employer-employee relationship, we have summarised the various employment wag below.
Alaska Minimum Wage Structure
- Minimum Wage: Alaska’s current minimum wage is $10.34 per hour. The State’s minimum wage is greater than the federal rate as determined by the Alaska Wage and Hour Act. The Act states that the state’s minimum wage must be at least one dollar more than the federal minimum wage.
- Student minimum wage: Employers in Alaska are allowed to pay student learners a wage that is no less than 75% less than the state’s legal minimum wage.
- Trainee minimum wage: Unless one of the other subminimum wage exclusions applies, Alaska minimum wage regulations prohibit employers from paying trainees less than the standard minimum wage.
- Overtime Wage: As per the Alaska Labour regulations, if an employee works more than eight hours in one day or more than 40 hours in a week, they are entitled to 1.5 times their standard hourly pay rate for every time worked over those restrictions. Alaska follows the federal Fair Labor Standards Act for all other areas of overtime regulation (FLSA). Employers with less than four employees, on the other hand, are exempt from Alaska’s overtime restrictions.
Alaska exempts certain employees from its overtime laws, such as professional employees, executive employees, administrative employees, agricultural workers, etc.
- Tip minimum wage: Employers in Alaska are required to pay tipped employees the federal minimum wage. Employers are not permitted to pay tipped employees a lower minimum wage rate under Alaska’s minimum wage rules.
Employee Leaves And Breaks Structure
- Holiday and Vacation Leave: Employers in Alaska are not required to provide vacation pay, paid holidays, sick leave, or premium pay for work done during the holidays under state law. If an employer provides such benefits, they have the authority to set the terms and circumstances under which they are provided.
- Wage Deductions: Certain forms of deductions from employees’ salaries are permissible, such as those mandated by state or federal law or with the employee’s express consent (e.g., benefit contributions, transportation costs). Employers are prohibited by state law from making deductions for a variety of reasons, including particular shortages or losses.
- Time Off and Leaves of Absence: The State follows time off and leaves of absence for employees on mandatory dates. Jury duty leave, voting leave, military leave, and crime victim leave are all examples of these statutes.
Alaska Employee Rights
The Alaska Human Rights Act prohibits any type of workplace discrimination and harassment based on race, color, sex, religion, origin, mental stability, marital status, etc.
Workplace Health and Safety
The federal Occupational Safety and Health Act governs job safety and health programs. Any hazard incident, occupational injuries or fatalities, etc. bear legal outcomes in the State of Alaska. The Alaska Whistleblower Laws protect the employees against any discrimination from the employer upon filing a complaint of occupational safety and health standards.
Organizational Exit Requirements
The Laid-off employees should receive their compensation and settlement amount in full within 3 weeks of the termination.
In case there arises any conflict between federal, state, and/or local law, the law that provides the employee with the most rights or benefits will normally apply.
How to Hire Employees Fast in Your Alaska LLC
When you want to hire employees for your Alaska LLC business, there are a few basic steps that you should follow. First, you will need to register with the state of Alaska as an employer. To do this, you will need to register for a myAlaska account, file employment eligibility forms, and have a Federal Employer Identification Number (FEIN).
Next, you will need to hire a registered agent. This person will act as the go-between your company and the state. Your registered agent must be an Alaska resident and have a state-issued mailing address. Make sure that the name of your registered agent does not resemble any governmental entity. Your agent’s name must also contain the full phrase “Limited Liability Company.” If you do not want to use this term, you can use an abbreviation instead.
Another crucial step when hiring employees is to create an Employee Handbook. While not necessary in Alaska, it is essential for many companies. This document contains an extensive list of policies and procedures. It is also vital to display posters explaining your company’s rules and expectations. When hiring employees, you must also comply with the state’s labor laws. You must pay federal employment taxes for your workers’ compensation benefits and state labor laws.
After creating your Alaska LLC, you should file the Articles of Organization with the state. The documents will cost you about $50. After that, you should file an annual renewal. As long as you keep up with your taxes, you’ll have a stable business. This document will help protect you in the future if you have to file for bankruptcy. Your employees’ safety and well-being are crucial to the success of your Alaska LLC, so it’s important to have an operating agreement in place.
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.