Hiring Employees in Missouri 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 Missouri 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 Missouri

In order to hire employees in Missouri 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 Missouri

The employers in Missouri 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 Missouri. 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 Missouri New Hire Reporting program

Employers of Business owners are bound by Missouri’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 Missouri; 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 Missouri?

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 Missouri, 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.
  • Missouri 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 Missouri 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 Missouri 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 Missouri 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 employer-employee relationship is regulated by a combination of both Missouri labor laws and federal employment regulations. In addition to the federal laws that provide standards for employee rights, the State of Missouri has its own worker safeguards provisions.

  • In 2022, the new state minimum pay is $11.15 per hour, which is $3 above the federal minimum wage.
  • Missouri also has “right to work” legislation that makes it illegal to require employees to join a union as a condition of employment.
  • All employers who are subject to the legislation’s requirements must publish a summary of the law and regulations. For Missouri businesses’ convenience, the Division of Labor Standards has produced a summary to publish.

Structure of Employees In Missouri

The federal legislation, the Fair Labor Standards Act establishes minimum wage and overtime compensation requirements for all companies. Regardless of whether the minimum wage is determined by federal, state, or municipal legislation, employers are expected to compensate their employees at the highest minimum wage.

Missouri Minimum Wage

The standard minimum wage is now $11.15 per hour. Missouri’s minimum wage is adjusted for inflation on January 1 of each year, rounded to the closest five cents, by the percentage rise or reduction in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months preceding the previous July.

  • Tipped Employees: Employees who receive tips must be paid half the state minimum wage or $5.575 per hour. In case the total amount of tipped wage does not add up to the standard minimum wage, then the employer is responsible to make up the difference, making the tipped employee’s hourly compensation $11.15 per hour.
  • Learners and Trainees: The Department of Labor and Industrial Relations in Missouri is authorized to adopt regulations permitting employees to pay learners a subminimum wage of not less than 90 cents less than the regular minimum wage.

Missouri Overtime Wage

The standard work hours per week in the State is 40 hours per week. If an employee is asked to work beyond the 40 hours in a workweek, Missouri law mandates the employer to compensate at one and one-half times the standard rate paid to the employee. Seasonal and recreational employees, on the other hand, must be paid overtime for all hours performed more than 52 in a workweek.

Young Employees

For minor children, the work hours are regulated as per the school session. During school days, the minor children up to 15 years of age should work a maximum of up to 3 hours every day and up to 8 hours during their holidays. They should not work for more than 6 days a week and have no employment during school hours. During any holiday breaks, when the school is not in session, minors are allowed to work up to 40 hours a week and six days per week. There are no limitations for minors aged 16 and 17.

Missouri Employees Rights

Following are the Employee Rights in Missouri. Any LLC or a business structure has to keep these rights in mind while hiring employees.

Anti-discriminatory Rights

The Missouri Human Rights Act (MHRA) forbids discrimination based on protected characteristics such as age, sex, ancestry, religion, handicap, color, and others for private companies with six or more workers.

Workplace Health and Safety

The federal legislation, Occupational Safety and Health Act (OSHA) guide workplace safety in the State of Missouri. Employers are mandated to maintain a safe workplace free of known dangers. An employer is responsible for providing healthy and safe working conditions, as well as any essential training and safety equipment for the industry.

Unemployment Benefits

When the employment of an employee comes to an end due to no fault of their own and did not leave freely (or was not dismissed for misbehavior), he or she may be eligible for unemployment compensation. However, the employee must fulfill Missouri’s wage standards to be eligible.

Vacation and Sick Leave

Employers are not compelled to offer vacation, holiday, or severance pay; these are benefits that are provided at the discretion of the employer. Mandatory leave can be designed through a contract between the parties, that specifies the clauses in particular. 

Family and Medical Leave

As per the US Family and Medical Leave Act (FMLA), businesses with at least 50 workers shall allow unpaid leave up to 12 weeks each year to the eligible employees for caregiving, sickness, or parental care of a new infant.

Equal Pay

Employers shall base the difference in pay among employees of the same class, on factors including skills, responsibility, and seniority. As per Missouri’s equal pay law, employers cannot discriminate among their employees with regards to the pay structure based on gender, such as prioritizing male employees over other sexes for the same amount of work done by the employees in the same working conditions. 

Whistleblower Protections

In Missouri, the Whistleblower’s Protection Act regulates the actions of the employer with six or more employees from firing an employee who has reported an unlawful act by the employer to an official government authority or law enforcement agency, an officer of the employer, the employee’s supervisor, or an HR representative.

Final Pay

Employees who are fired, whether voluntarily or involuntarily, must be paid all salaries owed on the day of termination. In case the employer defaults in making the payment within seven days of the due date, the employee can enforce a claim for wages for an extra 60 days.

How to Hire Employees Fast in Your Missouri LLC

To hire employees for your Missouri 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 run a Missouri LLC, you must know the laws regarding new hires, state employment laws, and federal labor laws. In addition, you must file various forms and applications for each new hire. These forms include employment eligibility forms and Federal Tax withholding forms. Additionally, you must file the W-4 form and Disability Self-Identification form. Your employees will also need to fill out a Workers Compensation Claimation form and provide the appropriate information to the state.

First, make sure you file all the necessary paperwork with the Missouri state labor department. This will ensure that you have the proper licenses and permits to hire employees. Also, you must register with the state labor department so that your employees are legal residents of Missouri. After filing the documents, you can start hiring employees.

Another important step is deciding on a name for your Missouri LLC. The name should be unique because an LLC does not have shareholders, unlike a C corporation. Also, make sure that your name is not too similar to any other company that has the same name. This is because Missouri has strict rules regarding the name of an LLC. Simply adding “LLC” to an existing name will not suffice; the Missouri Department of Revenue requires businesses to withhold taxes from employee wages.

Your Missouri LLC name needs to be unique and distinct from other entities. Despite the fact that naming a business is fun, the legal aspects of this step are critical. Your LLC name must include the words “Limited Liability Company” or “LLC.” You must also make sure that your chosen name is available in Missouri before choosing it. You can check the availability of your Missouri LLC name online at the Missouri Secretary of State’s office.

Before hiring any employees, you must obtain a federal employer identification number (EIN). This number is issued by the federal government and will be used to identify the business to federal and state tax authorities. This number can be obtained for free through the US Internal Revenue Service. However, it is important to be aware that your Missouri LLC will need to obtain an EIN before it can hire employees.

Getting an LLC in Missouri is easy and affordable. The fee for establishing your LLC is around $50 to $150, and the filing fee can vary between states. Additionally, you must designate a registered agent in Missouri and their name and address will become public records. This is important because the state will need to know who is the registered agent of the company.

An LLC is a great way to protect your personal assets. The state of Missouri is one of the most tax-friendly states in the country. In fact, the state ranks 13th in the nation in the Tax Foundation 2022 rankings.

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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