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Businesses with employees must comply with numerous regulatory issues. Some businesses
attempt to avoid these issues by engaging Independent Contractors rather
than hiring employees or by classifying workers as independent contractors
instead of employees. Both Federal and state regulations govern whether a worker can be
classified as an independent contractor. Make sure you fully understand them.
Heavy fines may be imposed if you have misclassified people who work in
your business and you may have to pay outstanding back employment-related
taxes.
For a listing of the most important agencies you
need to contact if you have employees or independent contractors, do a search
using the Business
Wizard. In Section 3, choose "Employee, Independent Contractor, or
Both."
Following is a list of most of the major issues that businesses in
Idaho may encounter
when hiring or working with employees or independent contractors and the agencies that
administer each issue.
For a
brief description of an agency's activities and a link to its Web site, click on the agency's name.
Bureau
of Occupational Licenses
 The Bureau of Occupational Licenses
examines applicants and issues licenses to employees and business owners who are
engaged in a number of business activities. If your staff members are required to be
licensed and they are not, you could be held liable for any consequences set forth
by the related licensing board.
To find out which professions are licensed by the Bureau of
Occupational Licenses, visit their Web site at http://ibol.idaho.gov/IBOL/General/bol%20boards.htm.
Occupations not listed on the site may be licensed by their particular occupational board,
such as the Board of Medicine or State Bar. To
find a list of these agencies, visit http://www.accessidaho.org/business/licensing.html.
Employees engaged in certain professions may be able to renew their licenses
on-line by visiting https://secure.ibol.idaho.gov/IBOLPortal/Boards/OnLineRenewalApplication/tabid/86/Default.aspx
or http://www.accessidaho.org/business/licensing.html.
Idaho Department of Health & Welfare
Division of Family and Community Services
If you have employees who are required to pay
court-ordered child
support, you will need to become familiar with this agency. The Division of Family and Community
Services receives payments from employers for employee payroll deductions
for child support payments. When you hire new employees, the Idaho Department of Labor submits
a copy of your New Hire report to this agency. If an
employee is determined to be in arrears on child support payments, Health
& Welfare will send an income withholding order to the employer.
The order indicates when to begin withholding payments, how much to withhold,
and where to send the withheld funds. The employer may charge the
employee a small fee to cover administrative costs.
An employer may be required to enroll dependent children in the company's
health insurance plan if they have no other coverage. For
information, visit http://www.healthandwelfare.idaho.gov/DesktopModules/Articles/ArticlesView.aspx?TabID=0&Alias=Rainbow&Lang=en-US&ItemID=28&mid=10282
If an employee owes child support in
another state, the designated agency in that state may contact the
employer with an income withholding order. Failure to comply with
the order can result in the employer being held in contempt
of court and being fined.
If an employee holds an occupational license and is in
arrears with child support payments, the license can be suspended, as can
the employee's driver's license. A license suspension could affect
your business.
For further information on employer responsibilities call the
Department at (208) 334-2479 or toll-free (in Idaho) at 1-800-356-9868, or
visit their Web site at http://www.healthandwelfare.idaho.gov/portal/alias__Rainbow/lang__en-US/tabID__3337/DesktopDefault.aspx
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Idaho
Department of Labor
Note: On July 1, 2007 the department formerly known as Idaho
Commerce and Labor separated into two agencies, Idaho Department of
Commerce and Idaho Department of Labor. Therefore, the URLs listed below
may change as the restructuring of the agencies continues.
The Department of Labor offers a wide
variety of information and services for employers through its offices
located throughout the state. To find your nearest Job Service office,
click the link to the right. The department's Web site can be accessed at http://labor.idaho.gov.
The department oversees the following employee issues: 
Unemployment Insurance: Information about unemployment
insurance (actually a tax, not insurance) can be found in the Taxes section of this site.
Independent Contractors: If you are considering using
independent contractors in your business, click here for a detailed description of
the difference between an Employee and an
Independent Contractor. You could face serious penalties if you
misclassify workers.
Employment and Training: Idaho Department of Labor offers
several business employment and training
services. For a description of available services, visit http://labor.idaho.gov/DNN/Home/tabid/673/Default.aspx,
then choose "Education and Training" from the menu on the left
side of the page.
New Hire Reporting: Employers must report all newly
hired employees within 20 days of the date of hire. Employees who are rehired
after an absence of 12 months or more must also be reported. For
information, visit https://labor.idaho.gov/applications/newhire/.
Idaho Labor Laws: To learn about state labor laws
that may
affect your business, visit http://labor.idaho.gov/DNN/LaborLaws/tabid/748/Default.aspx.
For information on Federal labor laws that may impact your business, see
the information for the U.S. Department of Labor
below.
Minimum Wage: For information on Idaho's minimum
wage requirements, visit http://cl.idaho.gov/ftp/MW-I-91-91.pdf.
The minimum wage increased on July 24, 2007 and will increase again in
July 2008 and 2009. Required minimum wage posters can be printed from the Idaho
Department of Labor's Web site listed above.
Employment Posters: To find copies of state
labor posters
that employers must post, visit http://cl.idaho.gov/ftp/requiredposters.pdf.
Farm Labor Contractors: Those who represent
farm laborers in securing work in agricultural positions in Idaho must register
with the Idaho Department of Labor, obtain a license,
and be bonded. For information, visit http://www.labor.idaho.gov/pdf/flc-001.pdf
and http://labor.idaho.gov/DNN/LaborLaws/tabid/748/Default.aspx.
Information is available in both English and Spanish. Farm labor contractors must also register with the Federal government. For
information, see U.S. Department of Labor below.
Employer Tax Incentive/Tax Credit: Employers who
meet certain requirements may receive a tax credit for hiring employees.
For information visit http://labor.idaho.gov/dnn/idcl/Businesses/EmployerTaxCredits/tabid/705/Default.aspx.
Hiring Veterans: For information on the benefits to
your business by hiring a veteran, visit http://cl.idaho.gov/dnn/Default.aspx?tabid=720.
Hiring an Employee with a Criminal Record: For
information about hiring someone who has been convicted of a crime, visit http://www.hirenetwork.org/admin/clearinghouse.php?state_id=ID
and http://cl.idaho.gov/lmi/pubs/idempnews/archived/ieFYIcurapr6.pdf.
It is possible to obtain fidelity bonding for high risk employees through
a Federal bonding program. Information is available on the above Web sites.
Your
business may qualify for a Work Opportunity Tax Credit for hiring an
ex-felon, a welfare or food stamp recipient, or another hard-to-place
individual. For information, visit http://cl.idaho.gov/ui/wotc1.htm.
Additional information on hiring an ex-felon is available from the Idaho State
Police Criminal History Unit by calling (208) 884-7130.
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Idaho
Commission for the Blind and Visually Impaired
Provides rehabilitation services to workers who are losing their vision
or have lost it due to an injury, illness, or congenital problem. For information, call
the Commission at (208) 334-3220 or visit their Web site at http://www.icbvi.state.id.us/
Idaho Council for the Deaf and Hard of
Hearing
Serves the deaf and hard of hearing and their employers. Find interpreters,
assistive
devices, and information on the Council's Web site at http://www.cdhh.idaho.gov/
or call their office at (208) 334-0879 or (800) 433-1323.
Idaho
Division of Vocational Rehabilitation
The employer of a worker who has suffered an injury or illness that
results in permanent or long-term disability that interferes with her/his ability to perform their job should contact this agency
for information about rehabilitation services. Workers who qualify to
receive Social Security Disability Insurance payments should also contact
this agency to learn about assistance programs. The agency's Web site
is located at http://www.vr.idaho.gov/.
Idaho Industrial Commission
Business Registration: If you have employees or make retail
sales, you must register
your business by submitting Form IBR-1, which can be
completed on-line at https://labor.idaho.gov/applications/ibrs/ibr.aspx. (Please
note, submitting this form does not register your business name
or entity type.)
Workers
Compensation Insurance: Employers having one or more full-time, part-time,
seasonal or occasional workers are required to provide workers’
compensation insurance coverage unless specifically exempt under Idaho law.
Information is available at http://www.iic.idaho.gov/employers/employers.htm
or you can contact a compliance representative by calling (208) 334-6000 or toll free 1-800-950-2110.
 Not
all employees or professions need to be covered by Workers' Compensation
Insurance. For more
information on exempt employees or professions, click on the button to the right.
Also see Workers' Compensation on the Insurance
section of this site.
Independent Contractors: If you are
considering using independent contractors instead of employees, be certain that you can legally do so.
For information on
the difference between an employee and an independent contractor, visit Employee
vs Independent Contractor.
If you fail to classify a worker correctly, you could be fined for failure
to carry worker's comp insurance.
Rehabilitation Assistance: If
an employee is injured in an on-the-job accident, the Industrial
Commission will provide rehabilitation assistance. For information, visit http://www.iic.idaho.gov/about_the_iic/divisions/rehab.htm.
The IIC offers an informative Guide
for Employers that can be accessed at http://www.iic.idaho.gov/employers/guide_for_employers.htm.
To find your nearest Industrial
Commission office, click on the box to the right.
 Idaho State Tax Commission
If you have an employee who physically works in Idaho,
or if you withhold Idaho income tax from a paycheck, you must open
an Idaho withholding account with the Idaho State Tax Commission.
Withholding Idaho income tax is required when payments are made to an
employee for work performed in Idaho, with some exceptions. Idaho income tax withholding returns
can be filed electronically at http://www.tax.idaho.gov/filing.htm.
 This
is what you need to do to get started:
Employer Tax Incentives:
For tax years beginning in 2005, the Idaho Small Employer Incentive Act
provides tax benefits to taxpayers who certify that they will meet certain
tax incentive criteria. You will find information about the Idaho Small Employer Incentive Act
of 2005 under Form 41 instructions found at http://tax.idaho.gov/forms_bus_05.htm.
Look for "New for 2005." Also refer to Forms 83, 84, and
85 and instructions.
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Internal
Revenue Service
The Internal Revenue Service's Web site, http://www.irs.gov,
is an easy-to-use resource to help you with all your Federal business
and personal tax needs. It contains information on how to obtain tax
forms and publications, tax statistics, tax regulations, taxpayer help
and education, IRS news, electronic services, how to contact the IRS
and ask questions via the Internet, and more.
Employer Identification Numbers (EIN): The IRS issues Employer
Identification Numbers (EIN), also called tax identification
numbers or tax ID numbers. For information, visit http://www.irs.gov/businesses/small/article/0,,id=98350,00.html.
You will need an EIN if you have employees, make retail sales, or do
business with corporations and government agencies. Your bank may also
require that you obtain an EIN. If your business offers employee health
insurance, you will need to use your EIN as your National Standard Employer
Identification number for electronic claims reporting.
Independent Contractors vs Employees: Employers are often
confused about the difference between an independent contractor and an
employee. For information on the difference and how it affects your
tax reporting, visit http://www.irs.gov/businesses/small/article/0,,id=99921,00.html.
Federal Unemployment Insurance Tax: See the Taxes
section of this Web site for information.
Social Security and Medicare Withholding: Social Security
and Medicare payments withheld from employee earnings are paid to the
IRS. For information, visit http://www.irs.gov/businesses/small/international/article/0,,id=104936,00.html
Self-employment Tax: Business owners who are sole proprietors,
partners, or who own an LLC must pay
self-employment taxes, which are a form of Social Security, on their
earnings. For information, visit
http://www.irs.gov/businesses/small/international/article/0,,id=105255,00.html.
Pension/Retirement Plan: For information on establishing an employee pension
or retirement plan and required tax reporting, visit http://www.irs.gov/pub/irs-pdf/p560.pdf
and http://www.irs.gov/retirement/sponsor/article/0,,id=136475,00.html
Information on terminating a pension or
retirement plan and the required tax reporting can be found at http://www.irs.gov/retirement/article/0,,id=110421,00.html
Occupational
Safety & Health Administration
OSHA is the division of the U.S. Department of Labor
that regulates working conditions. They also publish the "OSHA Small Business Handbook," which
can be downloaded at http://www.osha.gov/Publications/smallbusiness/small-business.pdf.
The handbook provides valuable information for employers.
For information about OSHA and the services they provide, visit their
Web site at http://www.osha.gov.
Their Office of Small Business Assistance can be accessed at http://www.osha.gov/dcsp/osba/index.html.
Information about the various training programs offerred
by OSHA can be found at http://www.osha.gov/dcsp/ote/index.html.
Information for Hispanic employers and workers can be found at http://www.osha.gov/dcsp/compliance_assistance/index_hispanic.html.
If you employ teenagers, visit http://www.osha.gov/SLTC/teenworkers/index.html
to find teen worker safety and health information in both English and
Spanish.
OSHA maintains an office in Boise at 1150 N. Curtis Rd., Suite 201,
phone (208) 321-2960 or toll-free in Idaho 1-800-482-1370. Free, confidential, on-site consultation
services about workplace health and safety issues that may affect your
business are available.
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U.S. Department of Labor
The U.S. Department of Labor regulates working conditions, wages, and payment practices. These
activities are governed by the Wage and Hour Division, which publishes the
"Handy
Reference Guide to the Fair Labor Standards Act." To obtain
a copy, visit http://www.dol.gov/esa/regs/compliance/whd/hrg.htm.
Wage and Payment Practices: DOL
guidelines classify all employees as either exempt
or nonexempt. Nonexempt employees are entitled to overtime pay if
they work more than 40 hours in a week. Exempt employees are
managers who spend at least 80% of their time (60% in retail and service
businesses) on management duties. They must also supervise at least
two employees and have some discretionary authority over accomplishing
their jobs.
Paying an employee a salary rather than an hourly
wage does not automatically classify her/him as exempt from receiving
overtime pay. Rather, the duties performed determine whether
they are exempt or nonexempt employees. If you have questions about
the status of your employees, contact the DOL. If you fail to pay
overtime to a nonexempt employee, you could be fined for failing to comply
with Federal law. For information, visit http://www.dol.gov/dol/topic/wages/index.htm.
Overtime Pay: For information on
requirements concerning payment of overtime when a non-exempt employee
works more than 40 hours in a week, visit
http://www.dol.gov/esa/regs/compliance/whd/whdfs23.htm. Click on
"Fact Sheet 23."
Minimum Wage: Both Federal and state laws
cover minimum wage payment practices. For information on the Federal
minimum wage law, visit http://www.dol.gov/dol/topic/wages/minimumwage.htm.
Effective July 24, 2007 the minimum wage increased from $5.15 per hour
to $5.85 per hour.
Employment Laws: To find out about Federal labor regulations that
may affect your business, visit the Department's e-laws Web site at http://www.dol.gov/elaws.
The "FirstStep Employment Law Advisor" on this site helps employers quickly
determine which of the DOL's major employment laws apply to their
business. If your business is a government contractor or
sub-contractor, visit http://www.dol.gov/elaws/ofccp.htm
to be certain that your business complies with all necessary Federal
employment regulations.
The DOL Compliance Assistance Web site at http://www.dol.gov/compliance
offers information on Federal employment rules and regulations and how to
comply with them.
Employment Posters: If you have employees, you must post
labor-related posters, even if you have a home-based business. To
find a list of federal poster requirements, visit http://www.dol.gov/elaws/posters.htm.
Posters concerning Idaho laws can be found at http://cl.idaho.gov/ftp/requiredposters.pdf.
Health Plans and Benefits: If your
business offers health insurance, visit http://www.dol.gov/dol/topic/health-plans/index.htm
to find information on how to comply with ERISA and COBRA requirements.
Information can also be found on the Employee Benefits Security
Administration's Web site at http://www.dol.gov/ebsa/.
Employing Teenagers: If your business employs teenagers, you will find much information at http://www.youthrules.dol.gov.
Laws govern the number of hours that teens can work, the
types of activities they can perform, and the types of equipment they can
operate based on their age.
Drug and Alcohol-free Workplace: The U.S. Department of Labor
Working Partners division helps employers establish an alcohol and drug-free work place and
provides
information on drug and alcohol use in the work place. The site is
located at http://www.dol.gov/workingpartners/welcome.html.
Hiring Veterans: For information on hiring
or retaining employees who are veterans, including information on
available grants, visit http://www.dol.gov/vets/.
Information on assistance available for employing homeless veterans can be
found under "Hiring Veterans" above.
Disabled Workers: If you employ workers
with disabilities, visit http://www.dol.gov/esa/sec14c/index.htm
to find information about special minimum wage allowances and requirements.
Employing the Homeless: The U.S. DOL offers
programs to train and support homeless individuals and agencies working
with the homeless to return them to employment. For information, visit http://www.dol.gov/dol/audience/aud-homeless.htm.
Farm Laborers: This agency administers
the "Migrant and Seasonal Workers Protection Act" found at http://www.dol.gov/esa/whd/mspa/index.htm.
The Act requires that farm labor contractors be licensed by the U.S.
Department of Labor as well as by the Idaho Department of Labor.
Family and Medical Leave Act: Businesses
with 50 or more employees must comply with this act. For
information, visit http://www.dol.gov/esa/whd/fmla/.
Military Service: Employees who are
members of the National Guard and who are called to active duty are
covered by the Uniformed Services Employment and Reemployment
Rights Act. The Act requires employers to
reinstate returning employees with the status, seniority, and same rate of
pay they would have obtained if they had been continuously employed. The
law also prevents discrimination in hiring, promoting, or retaining
employees who are in the National Guard. For information on the law and
how it may affect your business, visit http://www.dol.gov/dol/compliance/comp-userra.htm
Pension Plans: Find information on
employee pension and retirement plans at http://www.dol.gov/dol/topic/retirement/consumerinfpension.htm.
Information on the Pension Protection Act of 2006 can be found at http://www.dol.gov/ebsa/pensionreform.html.
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Bureau
of Citizenship and Immigration Services
Federal law requires that all parties in a business have
a legal right to work in the United States. To comply with this requirement,
a Form I-9, Employment Eligibility Verification, must be completed by all employees
and owners of a business. Employees must complete the form
during their first day of work.
Note: Effective December 26, 2007 employers must use a new
version of Form I-9 or face penalties from the Bureau of Homeland
Security. For information visit http://labor.idaho.gov/news/PressReleases/tabid/294/ctl/PressRelease/mid/1047/ItemID/1949/Default.aspx.
The new form includes changes in the types of documents employers can
accept to verify a job applicant’s identity.
Employers must complete their portion of the form,
including recording the documents presented by the employee to verify
identity, by the end of
the third day of employment. Employers must keep the completed forms on
file with their personnel records for at least three years after hiring a
new employee. If an employee resigns or is terminated in less than
three years, the form must be kept on file for one year after the end of
employment.
Be aware: If an inspector visits
your office and you can't produce the forms, you can be fined for each
undocumented employee, including the business owners.
For more information on Form I-9 visit
http://www.uscis.gov/files/nativedocuments/m-274.pdf. To download Form
I-9, visit http://www.uscis.gov/files/form/i-9.pdf.
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Social Security Administration
Federal Law requires that employers
withhold Social Security and Medicare payments from employee wage and
salary payments. For information and forms, visit http://www.ssa.gov/employer1.htm.
Business owners must pay self-employment tax, which is a form of Social
Security, on their earnings. This tax is paid to the Internal Revenue
Service when a business owner files his or her taxes. For more
information, see Internal Revenue Service above.
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Nondiscrimination Compliance
Businesses having five or
more employees
must comply with state and federal laws that cover various types of
discrimination, including discrimination based on race, religion, ethnic
origin, gender, disability, age, and pregnancy. These laws include the Americans with Disabilities
Act and the Federal Fair Employment Practices Act. For information on ADA
requirements, call (800) 669-3362 or visit the ADA Web site at http://www.usdoj.gov/crt/ada/.
A guide containing ADA requirements for small businesses can be downloaded at http://www.usdoj.gov/crt/ada/publicat.htm#Anchor-ADA-35326.
You may be eligible for a tax credit if you must make structural changes to your
building or work
area to accommodate a disabled employee's needs. Check with your accountant for
details or visit http://www.usdoj.gov/crt/ada/taxpack.htm. The
Web site of the Equal Employment Opportunity Commission (EEOC) provides
much information for small businesses, particularly those that do not have
an HR department, to assist with compliance issues. The
site is located at http://www.eeoc.gov/employers/smallbusinesses.html The
Idaho Human Rights Commission enforces both Idaho and Federal human rights
laws. For information on laws that may affect your business, visit the
Commission's Web site at http://humanrights.idaho.gov/. Harassment:
Every business, even a very small one, should have a written harassment policy that all employees read
and sign, since harassment on the job is a Federal offense. See Employee Handbooks
in the Links
section of this Web site for information on creating a harassment policy. top
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Federal Disability
Employment Information
Federal law requires that businesses with 15 or more
employees hire and make
accommodation for disabled workers or current employees who become disabled during
the course of employment. For information about your responsibilities and
for assistance in complying with the law, visit http://www.disabilityinfo.gov.
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Americans with Disabilities Act
The Americans with Disabilities Act gives civil rights
protection to individuals with disabilities similar to the rights provided to
individuals on the basis of race, color, sex, national origin, age, and
religion. It guarantees equal opportunity for individuals with
disabilities in public accommodations, employment, transportation, State
and local government services, and telecommunications. To learn
about your responsibilities under the law, visit the ADA Web site at http://www.usdoj.gov/crt/ada/adahom1.htm.
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