Hiring Employees in Utah 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 Utah 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 Utah

In order to hire employees in LLC in Utah, 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 Utah

The employers in Utah 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 Utah. 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 Utah New Hire Reporting program

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

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 Utah, 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.
  • Utah 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 Utah 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 Utah 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 Utah 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 Utah follows the federal legislation to establish the minimum employment protection criteria in the State.

  • The minimum wage in Utah is $7.25 per hour worked, which is the same as the federally determined minimum wage rate.
  • Employers are prohibited from discriminating against and retaliating against employees in a range of protected classifications under Utah law.
  • There are rules in Utah that govern the minimum wage and child labour.
  • Employers in Utah are required to provide relevant final pay after an employee’s employment terminates.
  • Business LLCs should ensure their compliance with every federal legislation and State enforced labor laws.

Structure Of Wages Of Employees

Wage and hour rules in Utah provide the fundamental guidelines on the payment structure of the employees and their working hours. Minimum wage, rest breaks, lunches, and other relevant situations, are all addressed by these rules. Employers must be informed of these rules so that they can effectively implement them in the workplace.

Utah Minimum Wage

Utah’s minimum payment is the same as the federal minimum wage of $7.25 per hour. Every three years, and whenever the federal minimum wage is changed, the minimum wage must be reviewed. The minimum wage in Utah cannot be higher than the federal minimum wage.

  • Tipped Minimum Wage: Employers might pay a reduced hourly minimum rate to employees who get gratuities as part of their remuneration. Employers in Utah are required to pay these workers at the rate of $2.13 per hour. However, this hourly rate, as well as any tips the employees get, must add up to the normal minimum wage of $7.25 per hour worked. Employers must make up the shortfall if this does not happen.
  • Student Learners: Utah minimum wage regulations allow the Utah Labor Commission to set a wage rate for learners that is less than the statutory minimum wage for the first 160 hours of employment.
  • Trainees: Utah’s minimum wage regulations prohibit companies from paying trainees less than the state’s legal minimum wage.

Utah Overtime Wage Rate

Because Utah does not have overtime legislation, federal law applies. For any hours worked exceeding 40 in a workweek, then such employees are eligible to receive the overtime pay for the total number of extra hours beyond 40 hours at the rate of 1.5 times their usual rate of pay.

Youth Labor

Employers are prohibited from forcing minors under the age of 16 to work during school hours or for more than 8 hours per day or 40 hours per week. Minors aged 16 and up are subject to time limits under the legislation.

Utah Employee Rights

While employing workers in Utah, employers must adhere to the state’s labor laws. Workers and employees have many rights under the laws. The following are some of the key provisions that provide employees in Utah with a variety of rights.

Anti-discriminatory Rights

The Utah Antidiscrimination Act (UADA) bans discrimination and harassment on the basis of protected characteristics such as race, color, caste, sex, faith, religion, nationality, and others.

Whistleblower Protection

The ‘Utah Occupational Safety and Health Act’ empowers employees to report workplace risks without fear of punishment from their employers. It also safeguards employees who have testified or are going to testify in any case involving occupational safety and health, or who exercise any right afforded by the Act on behalf of themselves or others.

Employers in Utah are not compelled to give paid time off or sick pay to their workers. Employers must adhere to rules on paid time off and sick pay if they want to implement them.

Employees in Utah are allowed to take up to 12 weeks of leave in a year for a significant health condition, bonding with a new child, or other qualifying exigencies. This leave is renewable every 12 months as long as the employee meets the qualifying criteria outlined above.

Occupational Safety

Occupational Safety and Health Act of Utah applies to both private and public enterprises. Many federal standards have been accepted by reference in Utah, as well as more stringent regulations for emergency preparedness, electrical safety, machine guarding, material handling, personal protective equipment, process safety management (PSM), and injury and sickness documentation.

Final Pay

Final earnings must be paid by the next normal payday if an employee willingly resigns or if employment stops due to a labor dispute. All pay owed to a terminated or laid-off employee must be paid within 24 hours of termination. Commissioned sales representatives are an exception.

How to Hire Employees Fast in Your Utah LLC

To hire employees for your Utah 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.

Hiring employees is a key component of running a successful business, but there are certain rules and regulations that you need to adhere to. You should also know that a Limited Liability Company is a hybrid between a sole proprietorship and a partnership firm. This is because the owner of the company is protected from any liability that arises from the actions of an employee.

First, you must apply for an EIN (Employer Identification Number), which is a nine-digit number used for tax purposes. This number will help you track the activities of your Utah LLC. You can request one from the IRS website. There is no fee for this. Additionally, certain Utah businesses require a license, such as if you are selling food or beverages.

Another requirement is to obtain an EIN, which is like a social security number for your business. An EIN is required by law and helps you identify your business. If you are not sure where to obtain this number, contact a business service in your area or apply online at the IRS website. Be sure to carefully read the requirements and refer to IRS Form SS-4 when applying. You may also need to set up an employer account with the state of Utah.

After forming an LLC, you should find a registered agent to handle your business affairs. An agent will help you process paperwork and provide legal advice. They will assist you with the formation of an LLC in Utah. It’s important to have a registered agent for your Utah LLC to protect yourself from liability.

In addition to hiring employees, you need to obtain an EIN for your Utah LLC. The IRS provides this number for businesses to identify them for tax purposes. Obtaining an EIN is free, but it is important to understand what the rules are before applying. You can also refer to IRS Form SS-4 to determine the details of your company.

When it comes to choosing an LLC name, you should choose a name that will distinguish your business from others registered in the state. The name must not imply that your Utah LLC is an agency of the state or that it is organized for a purpose other than those stated in its formation documents. Additionally, your name must be in English, and it must be distinct from the name of another company.

Registering an LLC in Utah is a simple process. You can register an LLC with the Utah Department of Commerce. You can either file your application online or submit a hard copy by mail. If you have more than one member, you should also choose a Registered Agent in Utah to handle your paperwork.

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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