Hiring Employees in Montana 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 Montana 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 Montana

In order to hire employees in Montana 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 Montana

The employers in Montana 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 Montana. 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 Montana New Hire Reporting program

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

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 Montana, 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.
  • Montana 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 Montana 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 Montana 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 Montana 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 In Montana

The State of Montana follows the combination of federal legislation and State-enforced laws to offer strong protection and rights to the employees working in the State.

  • The standard current minimum wage, as of January 2022, in the State of Montana is $9.20.
  • There are laws in Montana that govern the minimum wage, overtime, and child labour.
  • Montana employers and business LLCs must comply with all the federal and State-enforced regulations to maintain a standard employer-employee relationship at their workplace.

Structure of Wages Of Employees In Montana

Montana employment rules and regulations are covered in this section, including state civil rights legislation, payroll requirements, legal holidays, etc.

Minimum Wage

The current minimum wage in Montana is $9.20 per hour. Employers, with total annual sales of less than $110,000, but not covered by the Federal Fair Labour Standards Act may pay a lower minimum wage of $4.00.

  • Tipped Minimum Wage: Tipped employees are not entitled to a specific minimum wage; they must be paid at the usual rate. Employers with a gross yearly income of less than $110,000 can pay tipped employees $4.00.
  • Learners and Trainees: For the first 30 days of a learner’s employment, Montana minimum wage regulations enable the Department of Labor and Industry to exempt them from minimum wage and overtime standards.
  • Student Learners: For the first 180 days of employment, Montana minimum wage rules enable employers to pay learners under the age of 18 who work as agricultural employees a subminimum salary of not less than 50% of the normal minimum wage.

Montana Overtime Wage Rate

For any amount of time worked above 40 hours within the employer’s seven-day workweek, Montana law mandates that most employees be paid 1.5 times their ordinary rate of pay. Seasonal service employees, on the other hand, must work a minimum of 48 hours per week before overtime is payable.

Youth Labor

Employee rights in Montana provide that children under the age of 16 must be subjected to labor limitations. No minor under the age of 16 is authorized to work on a building site or on a farm. Similarly, no youngster under the age of 18 is permitted to work in a dangerous vocation. Regulations set out by the Commissioner of Labor and Industry provide a list of dangerous employment.

Montana Employee Rights

The Montana Labor and Employment Law Division is responsible for enforcing many of the laws associated with Montana employee rights. There are many divisions to enforce the well-being of employees in Montana.

Anti-discriminatory Rights

Employers are prohibited from discriminating against workers on the basis of protected characteristics such as race, caste, religion, sex, nationality, and other factors under the Montana Human Rights Act (MHRA).

Equal Pay

Employers in Montana are prohibited from paying women less than males for the same quantity or kind of work or labor in the same industry, establishment, office, or place of employment.

Whistleblower Protections

The Wrongful Discharge From Employment Act (WDEA) protects employees who have been with a company for at least six months from being fired without cause. The WDEA forbids an employer from firing an employee in retaliation for the employee’s unwillingness to violate public policy or for reporting a breach of public policy, a practice known as whistleblowing.

Time Off and Leaves of Absence

Montana has a few regulations that apply to all companies regarding mandated time off and leaves of absence for employees for events such as maternity and child care leave, jury and military duties, etc.

Occupational Safety and Health

All companies are obliged to establish and manage a safety program for all employees that includes training under the Montana Safety Culture Act. A safety committee is required for businesses with more than five workers.

Final Pay

If an employee is dismissed or laid off, they must be paid all last earnings immediately upon termination. According to the Montana Department of Labor and Industry, employees who quit or resign due to a labor dispute must be paid all final salaries by the next normal paycheck or within 15 days, whichever comes first.

How to Hire Employees Fast in Your Montana LLC

To hire employees for your Montana 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.

The first step to hiring employees in your LLC in Montana is obtaining an Employer Identification Number, or EIN. This is a number that identifies your business to the federal government and state of Montana. An EIN will allow you to legally hire and fire employees. You can apply online to obtain one. It is important that you read the instructions carefully and understand them before applying.

Once you have the EIN, you can open a bank account and hire employees. You should also have a website, which will attract more customers and allow you to grow your business faster. The global web will be crucial in 2022. The next step is to obtain your Operating Agreement, which lays out the rules and regulations for your business.

While the law does not allow you to hire anyone under the age of 21, an LLC can still hire employees in Montana. In some cases, it allows you to hire independent contractors to do certain tasks for you. However, this type of business must obtain a federal employer identification number to file taxes with the IRS.

When you are hiring employees, your first step should be to choose a company that has a registered agent in Montana. This agent must be over 18 years old and have a physical address in the state of Montana. This will allow you to fill out documents quickly and efficiently. You can also create an operating agreement that will streamline the hiring process.

When hiring employees, it is important to ensure that the name chosen for the LLC meets state requirements and is not already taken by another business. If you are unsure of the name you choose, you can check the secretary of state’s website. Although the secretary of state’s website is not the most user-friendly website, it does verify name availability for its clients.

You may also need to apply for a state license. These vary from state to state. Some require a seller’s permit while others do not. To get a business license, you can contact the state’s Department of Labor and Industry. Additionally, some states do not charge business owners sales tax on their products.

Your LLC’s name will be one of the first impressions that your company will make on potential customers. Choose a name that describes your business and explains what you do. For example, if you plan to open a coffee shop, you should include the words coffee and brew. You can also include the word green to show that your business is environmentally friendly.

When starting a business in Montana, it is important to choose a name that meets the state’s naming requirements. Your LLC should have a registered agent. A registered agent will receive government correspondence and service of process on behalf of your LLC. LegalZoom can provide you with a registered agent for a low fee of $249 a year and it renews automatically.

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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