Hiring Employees in Ohio 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 Ohio 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 Ohio

In order to hire employees in Ohio 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 Ohio

The employers in Ohio 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 Ohio. 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 Ohio New Hire Reporting program

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

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 Ohio, 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.
  • Ohio 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 Ohio 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 Ohio 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 Ohio 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

Labor regulations in the State of Ohio guide the wage and hour provisions, including tips, overtime, breaks, etc.

  • For firms with gross yearly earnings of more than $342,000, Ohio’s current minimum wage is $9.30. Employers earning less than $342,000 are subject to the federal minimum wage of $7.25.
  • Discrimination and retaliation against employees in a range of protected classifications are illegal in Ohio.
  • There are rules in Ohio that govern the minimum wage, overtime, and child labour.
  • If an employee works more than 40 hours in a week in Ohio, they are entitled to overtime pay.
  • Employers in Ohio must comply with any final pay and job reference requirements when an employee’s employment terminates.
  • The business LLCs operating their businesses in Ohio must adhere to every labour regulation mandated under the federal as well as State laws.

Structure Of Wages Of Employees

Employers must abide by the federal legislation,  Fair Labor Regulations Act, which establishes pay and hour standards. Employers must pay the highest minimum wage in their jurisdiction. This could be the federal minimum wage, but if the minimum wage is greater in those locations, state and even municipal laws will take precedence.

Ohio Minimum Wage

The employers whose annual gross receipts exceed $342,000 per year should pay their employees a minimum wage of $9.30 per hour. Employers with yearly gross receipts of less than $342,000 are subject to the federal minimum wage of $7.25 per hour. There are certain exceptions to the standard minimum wage rule in Ohio. Tipped employees and employees under the age of 16 are exempt.

  • Tipped Minimum Wage: The current minimum pay for tipped workers in Ohio is $4.65 per hour. The tipped minimum wage is 50 percent lower than the normal minimum wage, and it fluctuates each year, much like the standard minimum salary.
  • Trainees and Learners: Employers in Ohio shall pay the student learners and trainees a wage equal to the state’s legal minimum wage.

Ohio Overtime Wage Rate

Unless an employee is otherwise exempt, Ohio labor laws compel employers to pay overtime to employees at the rate of 1.5 times the employee’s regular rate of pay for all hours worked beyond 40 hours in a workweek. Employers with annual revenues of less than $150,000 are exempt from the overtime obligation.

Youth Labor

Young children under 17 years of age are not permitted to work in activities that are deemed hazardous or damaging to their well-being. Minors aged around 16 to 17 years of age have no restriction on the number of hours they can work in a week. They are entitled to a 30-minute break time between a 5-hour shift.

Ohio Employee Rights

The rights of employees in Ohio are set by the state. These rights protect the employees at all levels. From wage, payment percentage to equal rights at work for the same position, these rights are mandatory conditions every LLC has to follow while hiring employees.

Anti-discriminatory Rights

Employers in Ohio are prohibited from discriminating against the employees at the workplace based on protected characteristics such as race, color, caste, nationality, religion, disability, sex, age, and others under the Ohio Civil Rights Act.

Equal Pay

The Equivalent Pay Law (EPL) in Ohio forbids wage discrimination based on race, color, religion, sex, age, national origin, or ancestry for positions requiring equal ability, effort, and responsibility and performed under similar conditions. Every employee in the state is covered by this law.

Whistleblower Protection

In Ohio, an employee is protected from retaliation if he or she reports a violation of any law by an employer or coworker that the employee reasonably believes is criminal conduct that may cause an imminent risk of physical harm to persons or is a hazard to public health or safety.

Organisational Safety

A federal statute, the Occupational Safety and Health Act (OSH Act) sets the standard for workplace safety regulations in Ohio. Employers in the State should provide a safe and sound working environment to their employees, free from any foreseeable risks and hazards. The employers must also provide the necessary training on the basic procedures, equipment, etc. to be used at the workplace.

Time Off

In Ohio, there are no federal or state regulations requiring paid time off. The Family and Medical Leave Act is federal legislation that requires employers to give work protections to their employees, during unpaid leave for family and medical reasons.

Right to Privacy

The right to privacy at the workplace is also one of an employee’s basic rights in Ohio. This also includes employees’ personal belongings, such as purses or briefcases, personal telephone calls, and employee-only storage places within the company’s domain.

Final Pay

Employees who quit their jobs voluntarily or their employment is terminated by the employer must be paid their final salaries by the following normal payday.

How to Hire Employees Fast in Your Ohio LLC

In order to hire employees fast, you must be legally compliant with state and federal employment laws. The Ohio LLC owner must purchase workers’ compensation insurance and file a new hire report within 20 days of hiring. You can also deposit federal employment taxes. The Bureau of Workers’ Compensation has specific rules for how to hire employees and the filing fee is $120. The company name must be unique and distinct from other Ohio LLCs. Hometown Bakeries, LLC cannot compete with itself, and the name cannot include any confusing terms or acronyms.

In Ohio, employers must follow the minimum wage rules. Employees under the age of 17 are not allowed to work in hazardous or damaging jobs. Additionally, a minor aged sixteen or seventeen is entitled to a break of thirty minutes in between 5-hour shifts. Employees have rights under state employment laws, including wage and payment percentage. An Ohio LLC must abide by all employment laws before hiring an employee. If you are wondering how to hire employees fast, here are some tips.

When hiring employees, you must have a DBA registered with the Ohio Department of Job and Family Services (ODJFS). Your business must comply with this if it employs other individuals. Additionally, the state of Ohio requires businesses to set up an account with the Ohio Department of Job and Family Services (ODJFS) to pay unemployment compensation tax. Finally, keep in mind that your Ohio LLC is a pass-through tax entity. That means all profits and losses from your business pass through to the owners’ personal tax returns. If you’d like, you can elect to be a corporation and pay the corporate tax on your share of profits.

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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