Compliance guides and resources

Contractor work arrangements are popular. According to the US Government Accountability Office, about one-third of all businesses and almost 90% of Fortune 500 companies use independent contractors in some capacity. Hiring contractors can be a particularly attractive option for early-stage businesses because it allows them to leverage specialized skill sets while building their internal teams. But contractors are very different from employees, and the two mustn’t be conflated—or hefty penalties can apply.

As of 2024, five US states require employers to provide short-term disability insurance to workers: California, Hawaii, New Jersey, New York, and Rhode Island. Eligibility requirements, employer contributions rates, and authorized providers vary by state—but in general, businesses with at least one non-owner employee who performs work in one of these states need to obtain coverage to maintain compliance with state law. What is state disability insurance (SDI)? State disability insurance (SDI) refers to a collection of state programs that require employers to offer short-term disability insurance to workers.

Tax nexus refers to a relationship between a business entity and a taxing jurisdiction. There are four main types: income tax nexus, sales and use tax nexus, franchise tax nexus, and excise tax nexus. If your business has one of these types of nexus in a state, you may need to pay the corresponding tax type there. Determining where you have each type of nexus is a critical—and complicated—compliance task.

When you think of unemployment insurance tax, you probably think of state unemployment tax first—but there’s actually a federal unemployment tax too. Both state and federal unemployment tax are taxes that employers pay directly to the government, typically calculated as a percentage of payroll. Employment tax obligations can include federal, state, and local income tax, social security and Medicare tax, and SUTA and FUTA tax. To maintain compliance (and be prepared to pay), employers need to understand which taxes apply to them, how to calculate their liabilities, and when and how to make payments.

Maintaining a registered agent in every state where you’re registered with the Secretary of State is a key compliance requirement—and to avoid fines or other penalties against your business, each agent needs to be able to reliably receive and forward correspondence. If one of your registered agents can’t perform these functions (or if your business needs change), your business can change registered agents by filing a statement with the relevant Secretary of State.

What state is home to over two-thirds of Fortune 500 companies, half of US publicly traded companies, and the beachside amusement park Funland? The answer, of course, is Delaware. While Delaware’s corporate law is famously friendly to large public corporations, banks, and credit card companies, incorporating in Delaware can also be a good choice for small or early-stage businesses—particularly those that plan to seek investor funding. As a result, most startups also choose to incorporate in Delaware.

For most people, government and legal correspondence isn’t the world’s most exciting type of mail. It’s less fun than, say, an invitation to a swanky party or your most recent fruitcake-of-the-month club delivery. For business owners, however, effectively receiving and handling these communications is a critical part of running a business. If you miss a notification, you might lose your ability to do business in a state or be unable to defend yourself against a legal action.

The limited liability company (LLC) entity type provides many advantages—like reducing the owners’ personal liability, and providing flexibility in tax classification and management structure. Once you’ve established LLC status, you’ll need to comply with ongoing LLC compliance requirements to maintain LLC protections and avoid any penalties against your business. In most states, this includes filing an LLC annual report. What is an LLC annual report? An LLC annual report is a brief overview of key facts about a limited liability company (LLC).

The benefits of paid leave are clear. Research shows that offering paid leave increases participation in the workforce, improves financial security, supports child development and improves maternal health, and can increase employee productivity and retention. Despite this, the US is one of only six countries in the world that doesn’t guarantee any type of paid leave to full-time workers. Without access to paid leave, employees who face a serious medical condition or who need to care for a family member or child can experience financial insecurity and may drop out of the workforce entirely.

Remote work is becoming increasingly popular with businesses and employees: According to estimates, flexible work arrangements have become three to ten times more common since 2019. Offering remote work options can give employers access to a national talent pool, reduce overhead costs, and help businesses attract and retain the best people for their teams. This shift also means that an increasing number of companies face multi-state payroll obligations. If you employ out-of-state remote workers, have business locations in multiple states, or have employees who travel for work, you may be required to withhold taxes in multiple states.