For Employers: What to Do if You Have Employees

Before You Begin: Do You Have Contractors or Employees?

Before You Begin: Do You Have Contractors or Employees?

Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is the case even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.

Someone is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. North Carolina withholding is required for either a nonresident contractor or a contractor with an individual tax identification number, if they will be paid more than $1,500 during the calendar year.

If you have employees, you must follow all the requirements provided below. For more information on determining whether you have employees or contractors, see:

1. Employee Withholding

1. Employee Withholding

State income taxes must be withheld from employee wages and remitted to the N.C. Department of Revenue. Each new employer required to withhold North Carolina income tax must complete and file Form NC-BR with the N.C. Department of Revenue. Form NC-BR can be submitted electronically or the employer can complete and mail a paper version of the form.  For additional details, see Income Tax Withholding Tables and Instructions for Employers.

Taxpayers may also call the N.C. Department of Revenue at (877) 252-3052 (toll free) to obtain additional information.

2. North Carolina Income Tax Withholdings from Non-Wage Compensation

2. North Carolina Income Tax Withholdings from Non-Wage Compensation

If, in the course of a payer’s trade or business, a payer pays compensation of more than $1,500 during the calendar year to a payee for services performed in North Carolina, the payer is required to withhold North Carolina income tax from the compensation. For additional details including the definitions for “payer” and “payee”, see Income Tax Withholding Tables and Instructions for Employers.

If a new payer who is required to withhold North Carolina income tax does not have a N.C. withholding account identification number, the new payer must complete and file Form NC-BR with the N.C. Department of Revenue. Form NC-BR can be submitted electronically or the payer can complete and mail a paper version of the form.

Taxpayers may also call the N.C. Department of Revenue at 877-252-3052 (toll free) to obtain additional information.

3. Unemployment Insurance

3. Unemployment Insurance

Unemployment insurance tax is a tax on employer payrolls paid by employers and used to provide funds from which unemployment benefits are paid to qualified unemployed workers. Unemployment tax is not deducted from employee wages.

Each employer is required to submit true and accurate information for determining liability. As an employer in the State of North Carolina, you must complete Form NCUI604, Employer Status Report, and file it with the Division of Employment Security.

To learn more, contact your local NC Works Career Center.

Division of Employment Security
700 Wade Ave.
Raleigh, NC 27605
(919) 707-1170

4. Workers Compensation

4. Workers Compensation

In general, employers of three or more employees must provide workers’ compensation coverage.

The Industrial Commission website and state statute provide more detail.   Some special provisions may apply to:

  • Agricultural employers
  • Sawmill and logging operators,
  • Domestic employers,
  • Businesses that involve radiation
  • Interstate and Intrastate Carrier Industry

If an employer refers to its workers as independent contractors, be aware that this does not mean those workers are truly independent contractors.  The N.C. Industrial Commission may still find that the workers were in fact employees. The Commission will base that decision on factors such as degree of control exercised by the employer over details of the work.

How to Obtain Workers’ Compensation Insurance

If you are subject to the Act, you are required to carry workers’ compensation insurance. To obtain workers’ compensation insurance, contact an insurance agent about your coverage needs and the types of coverage available to you.

Any employer who is required to insure its employees, and fails to do so, may be subject to financial penalties and/or criminal charges. 

For additional information concerning the North Carolina Workers’ Compensation Act, please visit the Industrial Commission website and view the  NCIC Bulletin.

5. Required Posters

5. Required Posters

NCDOL requires all businesses in North Carolina to post a copy of the North Carolina Workplace Laws Poster in a conspicuous place where notices to employees are customarily posted. The poster, printed in two sections, contains information on some of the laws that NCDOL enforces, including occupational safety and health laws, wage and hour laws, and employment discrimination laws.

In addition to the North Carolina Workplace Laws Poster (English | Spanish), businesses in North Carolina may be required by other state and federal agencies to post notices to employees about other workplace laws.

All posters can be downloaded from the NC Department of Labor website.

Further, every employer who maintains workers’ compensation insurance or qualifies as a self-insured employer must post an Industrial Commission Form 17 in a conspicuous place in places of employment.  A Spanish version of the Form 17 is also available.

6. New Hire Reporting

6. New Hire Reporting

Federal and state law requires employers to report newly hired and re-hired employees to the NC Directory of New Hires.  This will help ensure children receive the child support they need. When employees are terminated, they should be reported as well.

NC Department of Health & Human Services
Child Support Enforcement
(888) 514-4568

7. Withholding Child Support

7. Withholding Child Support

When an employee is a noncustodial parent with a child support obligation, the employer is responsible for withholding child support payments from their employees’ earnings and sending these payments to the state Child Support office.

Employers may also need to enroll their employees’ children in health insurance plans, when available, and deduct the premiums from their employees’ earnings.

See the N.C. Child Support Services information for employers and information about electronic funds transfer of child support payments

8. Safety and Health

8. Safety and Health

The North Carolina Department of Labor administers and implements the Occupational Safety and Health Act (OSHA) of North Carolina. OSHA standards protect workers from unsafe and unhealthy working conditions. For information regarding OSHA requirements, contact the:

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

The U.S. Department of Labor administers and enforces the federal OSHA rules designed to protect workers from workplace hazards.

For information regarding compliance with federal standards, contact:

U.S. Department of Labor (Raleigh Area Office)
4407 Bland Road, Suite 210
Raleigh, North Carolina 27609
919-790-8096
919-790-8224 FAX

You may find more information on the federal OSHA website.

9. E-Verify

9. E-Verify

The Immigration Reform and Control Act of 1986 requires employers to verify employment eligibility by completing and retaining a one-page Employment Eligibility Form (Form I-9).

Or use the online E-Verify process.

10. Health Insurance

10. Health Insurance

Under the Affordable Care Act, businesses with 50 or fewer full time employees are not required to provide health insurance for their employees.

Although it is not required, you can use the Small Business Health Options Program (SHOP) to offer coverage to your employees. Enrollment can occur any time during the year. 

If have fewer than 25 employees and want to provide health insurance for your employees, the HealthCare.gov website explains a small business tax credit of up to 35 percent to offset the cost of health insurance.