Employer Issues

These resources help new small business owners understand the basics behind hiring, compensation, taxes and employee verification. For a comprehensive guide to everything from corporations and partnership issues to business license information and environmental regulations, refer to North Carolina 2004  Legal Aspects. 

Withholding Taxes

Certain taxes must be withheld from employee wages and remitted to the appropriate agency. These include state and federal income taxes and FICA (Social Security).

The State of North Carolina requires that every new employer complete and file with the North Carolina Department of Revenue an application for a North Carolina withholding identification number.   To learn more see State Taxes below.

In addition, the federal government requires that every employer who pays wages to one or more employees file an application for an employer identification number with the Internal Revenue Service. You may hear these numbers often referred to as Tax ID Number or Taxpayer ID Number. To learn more see Federal Taxes below.

State Taxes

To register with the State of North Carolina, you must complete an Application for Withholding Identification Number (Form NC-BR) and submit it to:

North Carolina Department of Revenue
PO Box 25000
Raleigh, NC 27640
(877) 252-3052

Unemployment Insurance Tax

Generally, a sole proprietorship, partnership, or corporation is required to provide unemployment insurance coverage for its employees if the business has one or more employees for 20 or more weeks in a calendar year; or pays $1,500 in wages during a calendar quarter.

You may also be liable for unemployment insurance tax if you acquire all or part of a business already subject to the Unemployment Insurance Act. Employer contributions to the Unemployment Insurance Fund are paid to and administered by the North Carolina Employment Security Commission. To determine the extent of your obligation, contact your local Job Service Center or:

Employment Security Commission
700 Wade Ave.
Raleigh, NC 27605
(919) 733-4329

 

You may also obtain general Employment Security Commission information from your Business ServiCenter Consultant.

Workers' Compensation

The Workers' Compensation Act requires that any employer who employs three or more employees provide workers’ compensation coverage. The act provides employees with compensation for the loss of earning capacity from accidents/deaths or injuries and occupational diseases arising in the course of employment.

Any sole proprietor or partner of a business whose employees are eligible for benefits may also be covered as an employee under the workers' compensation coverage of the business if the proprietor or partner is actively engaged in the operation of the business; and the insurer is notified that he/she has elected to be included.

For further information concerning workers' compensation, contact the:

North Carolina Industrial Commission
430 N. Salisbury Street
Raleigh, NC 27611

Mailing Address:
4340 Mail Service Center
Raleigh, NC 27699-4340
(919) 807-2501 or (800) 688-8349

Your Business ServiCenter Consultant can provide you with general workers’ compensation information supplied by the Industrial Commission.

Occupational Safety and Health Act of North Carolina

The North Carolina Department of Labor administers and implements the Occupational Safety and Health Act (OSHA) of North Carolina that applies to most private employers in the state.

OSHA safety and health standards protect workers from unsafe and unhealthy working conditions. The Department offers free services that can help employers bring their businesses into full compliance with OSHA standards. For information regarding OSHA requirements, contact the:

North Carolina Department of Labor
Occupational Safety and Health Division
4 West Edenton Street
Raleigh, NC 27601
(919) 807-2900

Federal Taxes

To register with the federal government, you should file an Application for Employer Identification Number (Form SS-4) by phone, fax, online or through the mail with the:

Internal Revenue Service Center
Attn: EIN Operation
Holtsville, NY 11742

(800) 829-4933

Fax (631) 447-8960

As a public service, the Internal Revenue Service will assemble and send you a tax information kit that fits your particular business situation. The kit includes forms and publications that apply to federal taxes only. To obtain this information, contact the IRS at (800) 829-3676 and request or their website and download:

• A Small Business Resource Guide CD (Publication 3207) 
• Tax Guide for Small Business (Publication 334); and
• Employer's Tax Guide (Publication 15).

For more information regarding Federal Employer Identification Numbers, read Understanding Your EIN (Publication 1635).

Federal Occupational Safety and Health Act

The U.S. Department of Labor administers and enforces the federal OSHA rules designed to protect workers from workplace hazards and ensure they come home healthy everyday. Enforcement is a high priority at the federal level and OSHA continues to track the injury and illness records of about 80,000 workplaces in high hazard industries to identify trends, pinpoint problems and target inspections. For information regarding compliance with federal standards, contact:

Raleigh Area Office
4407 Bland Road, Suite 210
Raleigh, North Carolina 27609
(919) 790-8096
(919) 790-8224 FAX

You can find more information on the federal OSHA website.

Employment Eligibility Verification

The Immigration Reform and Control Act of 1986 requires employers to verify employment eligibility of anyone hired after November 6, 1986 by completing and retaining a one-page Employment Eligibility Form (Form I-9). The form must be presented for inspection to officers of the U.S. Immigration and Naturalization Service or the U.S. Department of Labor upon request. The law does not require that Form I-9 be completed for:

1. Persons hired before November 7, 1986;
2. Persons hired after November 6, 1986, who left your employment before June 1, 1987;
3. Persons you employ for domestic work in a private home on an intermittent or sporadic basis;
4. Persons who provide labor to you who are employed by a contractor providing contract services (e.g. employee leasing); or
5. Persons who are independent contractors.

I-9 information on this website may also be helpful.

Other information is available by calling the U.S. Citizenship and Immigration Services National Customer Service Center (NCSC) at (800) 375-5283. This toll-free call center has additional information and, during their specified office hours, can connect you to live assistance in English and Spanish. The NCSC will be able to answer most questions - although they cannot provide information about the status of your case over the telephone.

To help you verify the employment eligibility of new hires, the U.S. Department of Homeland Security administers a Basic Pilot Program that is available to businesses in all 50 states.  This new program verifies a prospective hire’s status with methods that go into greater depth than you might otherwise be able to do. Participation is currently voluntary.  Guidelines and access to the program are outlined on the Office of Business Liaison website.