Hiring Employees in New Mexico 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 Mexico 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 Mexico

In order to hire employees in New Mexico 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 Mexico

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

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

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 Mexico, 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 Mexico 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 Mexico 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 Mexico 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 Mexico 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 Mexico regulates the code of conduct of business LLCs in the State through State-enforced regulations, in line with the federal legislation. Such laws offer standard protection and rights to the employees working in the State of New Mexico. Such as employee compensation, wage rate, leave of absence and holidays, and employee benefit packages formed by LLCs.

  • The minimum wage in New Mexico is above the federal minimum wage. In 2022, the state minimum wage is now $11.50 per hour.
  • Employers are obligated by state and federal law to post certain information on employee rights at their workplaces. These posters must be displayed in a popular area across NMSU’s hiring departments.
  • Employers in New Mexico are prohibited from discriminating against and retaliating against employees who belong to a range of protected classifications. Equal pay protections must also be provided by employers.
  • When employment ends, New Mexico employers must comply with applicable final pay
  • Business LLC employers in the State must ensure compliance with every State mandated laws and federal legislations.

Structure Of Wages of Employees

The Fair Labor Standards Act, generally known as the FLSA, establishes uniform minimum wage and hourly wage requirements for all employers in the United States. Employers must pay their employees the highest lawful minimum wage in their state. 

Minimum Wage

In New Mexico state, the current minimum wage is $11.50 per hour. As per the predictions, the minimum wage in New Mexico is set to rise to $12.00 per hour as of January 1, 2023. However, there are certain exceptions to the basic minimum wage rule applicable in the State.

  • Tipped Minimum Wage: New Mexico’s minimum wage for tipped employees is $2.80.The tip minimum wage shall increase to $3.00 on January 1, 2023.
  • Trainees: Employers in New Mexico are not permitted to pay trainees a wage that is less than the state’s legal minimum wage.
  • Student Learners: Learners are excluded from the minimum wage and overtime rules in the State of New Mexico.

New Mexico Overtime Wage

If an employee works beyond 40 hours in a week, then they are eligible to receive overtime compensation for the number of extra hours worked at their employment. Such employees should be paid at the rate of 1.5 times their usual pay rate for the extra hours in a workweek by the employers.

Youth Labor

For minors aged 16 and above, there are no time limitations on their work hours. However, the young children from 14 to 15 years of age shall not work for more than 3 hours when school is in session, and 8 hours on a non-school day.

New Mexico Employee Rights

The New Mexico Center on Law and Poverty collaborates with workers and workers’ rights organizations to improve pay and working conditions for low-wage earners. The major rights ensured to the employees in the State are:

Anti-discriminatory Rights:

Employees in New Mexico are protected against discrimination and harassment based on protected characteristics such as race, color, sex, nationality, religion, disability, and other similar factors under the New Mexico Human Rights Act (NMHRA).

Equal Pay

The Fair Pay for Women Act prohibits an employer from discriminating against employees of the opposite gender for the same work on the job that needs the same skill, responsibility, and effort. They also prohibit lower wages paid to the employees of the opposite gender for the same work on the job that needs the same skill, responsibility, and effort and performed under the same conditions. Only in the case of a seniority system, merit system, or a system that assesses earnings by amount or quality of work may exceptions be granted.

Family and Medical Leave

According to the Family and Medical Leave Act, employers with at least 50 employees must provide eligible employees unpaid time up to 12 weeks each year for disease mitigation and healthcare.

Organizational Safety

The New Mexico Occupational Health and Safety Bureau (OSHB) is a division of the New Mexico Environment Department that monitors employee safety and establishes guidelines for companies to follow in order to ensure employee safety. An employee can bring an action against their employer in case they sustain any injuries due to workplace hazards. 

Final Pay

Upon termination, the employee must be reimbursed with their wage and other benefits within 5 days from the date of termination. All other workers whose employment ended involuntarily must be compensated within 10 days of their termination. If an employee dies, the company may be obligated to pay the person’s surviving spouse all overdue earnings.

How to Hire Employees Fast in Your New Mexico LLC

When you want to hire employees fast for your New Mexico LLC, it is best to start with the right steps. First, register your business with the state. Then, you will need to obtain an EIN, or employer identification number, from the IRS. Your EIN is one of the most important aspects of running a small business. Next, file the Form 2553 to become an S-Corp, which is a type of corporation that has characteristics of both a partnership firm and a sole proprietorship.

Hiring employees is an exciting but intimidating process. As a new business owner, you need to balance the cash flow needs of your new business with the legal obligations associated with employment. You also need to comply with state and federal laws regarding hiring. Getting your first employee requires filing the proper paperwork and complying with various laws. You will need to get a Federal Employer Identification Number (FEIN) from the U.S. Department of Labor, as well as a Withholding Tax Account (WTA) from New Mexico’s Taxation & Revenue Department.

Once you’ve completed the steps to form an LLC, you can file an effective date. You’ll need to file an annual report in most states, but in New Mexico, you’ll only need to file a biennial report. The annual report will be due on the 15th day of the fourth month following the close of your fiscal year. To obtain the necessary forms, visit the New Mexico Secretary of State Office.

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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