Your organization's workforce is one of its key assets. Managing your employees is critical not only to the basic operation of your business, but also for its ongoing success. As an employer in the Commonwealth you have certain responsibilities and obligations; below are resources to help you in understanding them.
Although an employee handbook isn’t required by law or regulation, its one of the most important communication tools that you can provide your employees about your business. A good, well-written handbook describes your legal obligations as an employer, and your employees’ rights. The US Small Business Administration has a number of good resources on Employee Handbooks to get you started, and also has an Employee Handbook Template.
New Hire Reporting
Federal and state law requires employers to provide basic information on new hires or anyone that is rehired or returns to work after a separation of employment of 30 days or more. This information is used to identify individuals that may owe child support or recipients of unemployment compensation who fail to report earnings. Additional information is available from the Kentucky New Hire Reporting Center or by calling (800) 817-2262.
Employment Eligibility Verification
If you hire employees, you must have the employee fill out an Employment Eligibility Verification Form (I-9). The I-9 form is used to provide proof that people you hire are U.S. citizens or legal aliens authorized to work in the United States. Employers must verify the information provided by new employees. Refer to the Handbook for Employers for more information on employer I-9 responsibilities. Additional employee eligibility verification information is available from the U.S. Citizenship and Immigration Services by calling (800) 357-2099.
Employees or Independent Contractors
As your business grows you may need to hire employees. Another option is to establish a contract with another company or individual (independent contractor) to perform certain tasks for you. An important first step is to determine whether someone doing work for you is an employee or an independent contractor, because the answer has tax as well as other implications. The IRS has additional information on this topic and will determine for you whether a worker is an employee or independent contractor if you submit Form SS-8.
Federal and State Employee-related Taxes
Employers have tax obligations to the Internal Revenue Service and the Kentucky Department of Revenue. The IRS provides guidance on federal employment taxes. Federal employer tax obligations include social security/Medicare taxes, unemployment taxes and federal income tax withholding from employee pay. Kentucky employers are required to withhold state income taxes from employees. The Department of Revenue provides state withholding tax information or by can be reached at (502) 564-7287.
Employers in the state must register with the Office of Employment and Training (OET) to establish a state unemployment insurance account.
Although there are a few exceptions, most employers in Kentucky must provide workers’ compensation insurance coverage for employees. Kentucky does not sponsor a state-run insurance program. Therefore, it is the employer’s responsibility to secure the insurance from a private insurance carrier or self-insure. See the Kentucky Department of Workers' Claims for more information.
The U.S. Department of Labor provides information on federal poster requirements.
Kentucky employers are required to display certain posters in a conspicuous location at the place of business:
Required state posters can also be found through the Kentucky Labor Cabinet, the Office of Employment and Training, and the Kentucky Commission on Human Rights.
Occupational Safety & Health
Employers should be aware of occupational safety and health regulations that may impact their business. This includes issues such as noise levels in the workplace, exposure to hazardous or toxic chemicals, job-related injury and illness recordkeeping and reporting requirements. Visit the Kentucky Labor Cabinet's Office of Occupational Safety & Health or call (502) 564-3070 for additional information.
Employers Engaged in Construction Work or Mining Activities
Employers involved in construction work or mineral severance, preparation, or transportation in Kentucky that haven't been doing business in the state for at least five consecutive years are required to post a performance bond with the Kentucky Department of Labor as per Kentucky Revised Statute 337.200.
Americans with Disabilities Act
The Americans with Disabilities Act (ADA) impacts virtually every business in the areas of employment practices and business accessibility to the public. The ADA is a federal anti-discrimination law for individuals who are disabled. The definition of "disabled" applies to individuals with a physical or mental impairment that greatly limits one or more major life activities (such as self care, seeing, walking, hearing, speaking, learning, etc.) The U.S. Department of Justice has a toll-free ADA Specialist hotline at (800) 514-0301 for more information. Other resources include the Equal Employment Opportunity Commission ADA Handbook, and the Office of the Kentucky ADA Coordinator.