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How to Hire Employees In Utah

Hiring in Utah for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Utah:

Establishing a local entity: Creating a legal entity in Utah allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Utah’s labor laws, helping you hire in Utah without navigating the complex legal landscape yourself.
Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Utah’s labor regulations while offering competitive employee benefits.
Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Utah has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Utah.

Complying with Utah specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Utah, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

As of 2023, Utah's population is approximately 3.4 million, with a growth rate among the highest in the nation.

Utah boasts a diverse economy with key industries including technology, mining, and tourism.

Utah is a right-to-work state, meaning employees cannot be compelled to join or pay dues to a labor union as a condition of employment.

Utah follows the at-will employment doctrine, allowing employers to terminate employees without cause, provided it doesn't violate employment laws.

Key Things to Know About Hiring in Utah

Labor Laws in Utah

Working Hours in Utah

Utah has specific employment and labor laws governing working hours, designed to protect employees’ rights and ensure fair compensation. Whether you’re hiring local employees or working with an Employer of Record (EOR), it's essential to understand the state's regulations around working hours to ensure compliance.

1. Standard Workweek and Overtime

Utah does not define a standard workweek; however, the federal Fair Labor Standards Act (FLSA) considers 40 hours per week as standard.
Under the FLSA, non-exempt employees must receive overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek.
Certain employees, such as salaried professionals, may be exempt from overtime.

2. Meal and Rest Breaks

Utah labor laws do not require meal breaks for employees aged 18 and over. Minors under 18 must receive a 30-minute meal period for continuous work exceeding 5 hours.
Minors are entitled to a paid 10-minute rest break for every 4 hours worked. There are no rest break requirements for adult employees.

Minimum Wage in Utah

As of 2024, the minimum wage in Utah is $7.25 per hour, aligning with the federal minimum wage. This rate applies statewide as Utah does not permit local municipalities to set higher minimum wages.

Overtime in Utah

Utah adheres to federal overtime regulations under the Fair Labor Standards Act (FLSA). Non-exempt employees are entitled to overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek. Exempt employees, such as executives, professionals, and administrative workers, are not eligible for overtime pay.

Onboarding New Hires in Utah

We can help you get your new employee started in Utah fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Utah

Payroll taxes in Utah are deductions employers must take from employees’ wages and remit to the state. These taxes fund various state programs and services, including unemployment benefits and disability insurance. Examples of payroll taxes include:

State Income Tax: Utah imposes a flat income tax rate of 4.85% on employee wages.
Unemployment Insurance Tax: Employers pay unemployment insurance taxes, with rates varying based on the employer's experience rating and other factors.

Payroll Cycle in Utah

Utah law mandates that employers pay employees at least semimonthly (twice a month). Wages must be paid within 10 days after the end of the pay period. Employers must establish regular paydays and inform employees of the pay schedule. Exemptions apply for executive, administrative, and professional employees who may be paid monthly.

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Utah Employment Taxes

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Utah. Understanding the tax obligations for both employers and employees is crucial when operating in Utah's business landscape.

Employer Tax Contributions

Employers in Utah are responsible for employment taxes, including unemployment insurance and workers' compensation. Unemployment insurance tax rates vary based on the employer's experience rating, while workers' compensation rates depend on the industry and employer's claim history. Employer payroll contributions are generally estimated at an additional 1% to 10% on top of the employee salary in Utah.

Employment Tax Type	Tax Rate
Unemployment Insurance Tax	Varies; typically between 0.2% and 7.2%
Workers' Compensation	Varies by industry and employer's claim history

Employee Tax Contributions

Employee tax contributions are generally estimated at 4.85% of employee salary in Utah.

Employee Payroll Tax Contribution	Tax Rate
State Income Tax	4.85%

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Utah tailored to your needs.

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Benefit Requirements for Employers in Utah

In Utah, employers are not required to provide benefits such as health insurance, retirement plans, or paid leave. However, if offered, they must comply with federal laws, such as the Employee Retirement Income Security Act (ERISA). Learn more about employee benefits.

Employee Benefits for Utah

Competitive benefits are essential for attracting and retaining top talent in Utah. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Utah packages include:

Pension or 401(K)
Vision Insurance
Life Insurance
Medical Insurance
Dental Insurance
Health Savings Plan (HSA)
Flexible Spending Account (FSA)

Paid and Unpaid Leave Policies in Utah

Family and Medical Leave

Under the FMLA, eligible employees are entitled to 12 weeks of unpaid leave for family or medical reasons.

Jury Duty Leave

Employers must provide unpaid leave for jury duty, ensuring employees can fulfill this civic duty.

Voting Leave

Employees are entitled to up to two hours of paid leave to vote if they cannot do so outside working hours.

Military Leave

Employees serving in the National Guard or military reserves are entitled to unpaid leave for service under USERRA.

Bereavement Leave

Not required by law, but many employers offer leave for family bereavement.

It’s Easy To Manage Benefits For Employees In Utah With Playroll

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Employment Termination Protocols in Utah

Hiring Employees in Utah with an employer of record

Discuss how an EOR handles onboarding, including setting up compliant employment contracts, registering for taxes, and managing benefits like Utah's superannuation system (if applicable).

The employer of record is responsible for:

Employment Compliance: Ensure all employment contracts comply with Utah's labor laws and regulations, including proper classification of employees.
Payroll Management: Calculate, process, and distribute employee salaries in accordance with Utah's payroll laws, including deductions for taxes and social security contributions.
Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Utah's legal requirements.
Benefits Administration: Provide mandatory employee benefits as required by Utah's labor laws, such as health insurance, pension contributions, and statutory leave.

Employer of Record for Utah

Guide to Hiring Employees in Utah