Recent technological developments have made remote work possible from anywhere in the world. Employers and employees both appreciate the accessibility, convenience and choice that remote work offers. However, once your business starts hiring out of state employees in New Mexico, employment law, tax and insurance coverage issues can get complicated.
In order to comply with New Mexico state laws and employment standards, your company must establish an economic nexus within the state, register your business and follow all individual state employment standards.
Hiring out-of-state employees is a smart way to find the very best candidates for each position, but state-specific hiring issues are complex. If you’re unable to register with each new state and comply with state-specific employment standards and regulations, it can open you up to fines, penalties and liability. Let’s look at the different challenges you’ll experience when you hire in New Mexico—and how SixFifty’s solutions make it easier.
Scenario 1: Employee works from home in another state
Previously, when an employee needed to move out of state, they’d also need to find new employment. Today, workers are free to move to a new state to be closer to family, follow their partner to their new employment or simply enjoy a new place to live.
You can retain your employees even when they move—but unless you already do business in New Mexico, you might not have an economic nexus. Your home state’s policies and standards may also be quite different.
Scenario 2: Hiring out-of-state employees in New Mexico
When you hire new employees in a different state, you’ll still need to comply with that state’s rules. For example, your company may be headquartered in Arizona, but New Mexico employment laws and standards will apply to any New Mexico employees. Your company still needs to register in each new state they hire within, and ensure their policies meet those standards.
Multistate Employer Registration Factors to Consider
Researching and complying with state-specific standards can be time-consuming and expensive, but failing to do so exposes the business to liability. That’s why SixFifty has developed tools to make the process easier. We’ve identified five key areas of focus in multistate hiring. These tools simplify the research and compliance process, so you can retain your top employees and onboard new hires—wherever they are.
Here’s what it looks like to register your business in New Mexico.
1. New Mexico Employment Registration
First, you’ll need to establish an economic nexus in New Mexico. This involves submitting a Foreign Profit Corporation Application for Certificate of Authority to the Secretary of State, reporting the new hire to the Department of Labor and updating or obtaining unemployment and workers’ compensation insurance.
- Obtain a registered agent
- Register to do business in New Mexico
- Report new hire to the New Mexico New Hire Directory
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. New Mexico Tax Registration
Next, you must fulfill your tax obligations. Employers are required to register for income tax withholding, complete all necessary forms and register for gross receipts/business taxes. (New Mexico does not have sales tax. Instead, they have a gross receipts tax triggered by an economic nexus or economic threshold.)
- Register for income tax withholding account
- Obtain the completed state income tax withholding form from the employee
- Register for a sales tax license or permit
3. New Mexico Employment Policies
New Mexico has four state-specific employment policies which must be included in your employee handbook. The state’s required cover specific types of leave, including lactation leave. These must be added to the handbook, and any conflicting policies must be updated accordingly.
- Review employee handbook for compliance
- Update policies or add new leave policies as needed
4. New Mexico Required Employment Policies (April 2023)
- Domestic Violence Leave
- Jury Duty Leave
- Lactation Accommodation Policy
- Sick Leave
- Voting Leave
5. New Mexico Employment Implications
Next, you’ll need to ensure that your company’s practices comply with New Mexico state law. For instance, you’ll need to pay at least the state minimum wage ($11.50/hour), review their employment status, and ensure non-compete provisions must comply with state law. You’ll also need to review and decide whether your insurance coverage is appropriate for New Mexico employees.
- Ensure non-compete provisions comply with New Mexico law
- Confirm the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm the payroll practices meet the payment frequency standards in New Mexico
- Consider whether insurance extends coverage to employees in New Mexico
- Consider COVID-19 laws that affect the employee
6. New Mexico Signage
Finally, New Mexico state law requires employers to post six different types of employment signage. The state hasn’t dictated how signage can be posted or distributed to exclusively remote employees. However, federal law generally allows employers to post digital signage on websites, in easily accessible intranet folders or in company communication channels.
- Post or distribute required signage
Simplify Multistate Compliance with SixFifty
The process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with New Mexico employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in New Mexico. To simplify the process of hiring out-of-state employees in New Mexico or supporting remote employees on-the-move, check out our 50 State Hiring Kit.