Remote work has skyrocketed in popularity, which means employers have their pick of candidates in all 50 states. Employees love the flexibility and convenience of remote work, while employers have a much larger talent pool to choose from. However, hiring out of state employees in North Carolina can cause complex issues.
Employment laws can vary dramatically between states. Laws and standards in North Carolina may conflict with your home state’s requirements and policies. If you violate the laws—even unknowingly—you could expose your company to fines and penalties.
SixFifty has developed multistate employer registration tools to simplify the out-of-state hiring process. Instead of researching each new state’s laws, you can save time, money and frustration while quickly onboarding new hires.
If you’re thinking about hiring in North Carolina, here’s what the process might look like.
Scenario 1: Employee works from home in another state
Caring for aging parents, following a spouse to new employment, moving to a new home: before remote work, employees would have to seek a new job. Now employers can retain their top talent, even when they move out of state. However, employers must be aware that North Carolina’s laws govern any employees living and working there—not the laws where the company is headquartered—and adjust policies accordingly.
Scenario 2: Hiring out-of-state employees in North Carolina
Alternatively, an employer may wish to hire out-of-state employees from the start. Again, the laws of the new state apply to the out-of-state employee. If your new employee lives and works in North Carolina, they’re subject to North Carolina state employment laws—and so is your company. Employers must ensure their employment policies and procedures are compliant. This can get complicated, particularly if you’re hiring in multiple new states.
Multistate Employer Registration Factors to Consider
Whatever your reason for hiring or retaining out-of-state employees, the importance of compliance can’t be understated. Failing to comply with laws and standards in each new state could result in expensive penalties. Because each state’s laws vary, it’s easy to spend hours or days researching.
Our multistate employment tools make it faster, easier, and more affordable to stay in compliance with North Carolina’s employment laws. SixFifty has identified five core areas of focus for every business hiring workers in a new state. Here’s what the process might look like.
1. North Carolina Employment Registration
To work with a North Carolina employee, employers must establish an economic nexus within the state. This involves registering to do business in North Carolina, reporting the new hire to the Department of Labor and registering for insurance and workers’ compensation coverage.
- Obtain a registered agent
- Register to do business in North Carolina
- Report new hire to the North Carolina New Hire Directory
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. North Carolina Tax Registration
Next, you’ll need to fulfill your tax obligations within the state. This includes registering for an income tax withholding account, filing the tax forms from your new employee and registering with the state for a sales tax license. Your company must withhold state taxes as appropriate.
- 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. North Carolina Required Employment Policies (2024)
North Carolina has seven state-specific policies which must be included in your employee handbook. These cover various types of leave, including disaster response and school involvement leave, and meal and rest breaks for minors. Companies should review their handbooks and update or add new policies as required.
- Disaster Response Leave
- Domestic Violence Leave
- Immigration Law Compliance (25 Employees in the state)
- Jury Duty Leave
- Leave for Involvement in School
- Meal and Rest Breaks (minors only)
- Parent Compliance with Juvenile Court Orders Leave (Witness Duty Leave)
- Pay Transparency Policy
4. North Carolina Employment Implications
Your company should be aware of non-compete restrictions, the state minimum wage and overtime policies. Payroll policies must comply with North Carolina standards. Similarly, review whether your insurance covers North Carolina employees, and make adjustments as necessary. Your new employee could be subject to state-specific COVID-19 laws and policies.
- Ensure non-compete provisions comply with North Carolina 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 North Carolina
- Consider whether insurance extends coverage to employees in North Carolina
- Consider COVID-19 laws that affect the employee
5. North Carolina Signage
Finally, North Carolina requires employers to post or distribute three different types of employment signage. The state has not declared how companies should do so for exclusively remote workers. Generally, posting the signage in easily accessible web folders, on the company intranet or in communication channels will satisfy the requirement.
- 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 North Carolina employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in North Carolina. To simplify the process of hiring out-of-state employees in North Carolina or supporting remote employees on-the-move, check out our 50 State Hiring Kit.