Your best employees may not have an official Social Security number. Instead, they have an Individual Taxpayer Identification Number or ITIN. It's a nine-digit number that functions similarly to a Social Security number and starts with the number nine. So, can you hire someone without a Social Security number?
The short answer is... it depends on your payroll provider.
But the good news is, even though most payroll providers will stop you from adding workers with ITINs onto your payroll. We're the complete opposite!
Baron allows our clients to add workers with ITINs onto their payroll and has been doing this since day one.
With Baron, you can still put these employees on your payroll, which allows them to pay taxes like a typical employee and protects you and your company from liability resulting from paying people off the books in cash.
What is an ITIN Number?
Individual Taxpayer Identification Numbers were created by the Internal Revenue Service to allow workers without Social Security numbers to pay taxes. However, they alone do not provide legal immigration status or work authorization in the U.S.
A foreign national may not be able to get a Social Security number in the U.S., but they have an ITIN and have enough other documentation to work here legally.
For these employees, taxes are withheld from payroll in the same way they are for employees with Social Security numbers.
If an employee provides enough documentation required by the I-9 form to work in the U.S. and presents you with an ITIN, Baron can include these workers on your payroll.
Can you Add Workers with ITINs to your Payroll?
It benefits you to use an employee's ITIN and put them on your official payroll instead of paying them off the books in cash.
If one of these employees has an injury on the job, they aren't covered by workers' compensation unless they're on your payroll.
If the Department of Labor walks through your door, they will want to see payroll records and ensure all of your employees are accounted for. If not, you could be in legal trouble.
It's also difficult as a business owner and not a safe practice to continually carry around cash to pay employees. You may not have cash on hand when needed.
When you use ITINs and include these workers on your payroll, you can sleep at night. There are no skeletons in the closet.
Later, suppose your employee gets a Social Security number as their immigration status changes. In that case, they can request to move their records from the ITIN to the new Social Security number.
It's a win-win for the employee and you, and it protects your business.
Are You Looking to Put ITIN Workers on Your Payroll?
- Have you been told it's not possible?
- Have you been told it's not legal?
- Are you worried about the DOL?
- Are you worried about your ITIN workers getting injured and not being covered by workers comp?
If so, then we can help.
Why Does Baron Allow ITIN Employees When Other Companies Don't?
Most large payroll providers will not put workers with ITINs on your books. Some may claim they will, but when push comes to shove, and you have one to add, they won't do it.
The reason often comes down to inconvenience. Specifically, payroll companies must send an electronic file with wages and withholding for all their clients to the Social Security Administration once a year.
Any ITINs included in this big file will corrupt the file, and nothing will upload. To get around this, payroll providers need to remove all companies with ITINs (those starting with a nine) from the big file and upload each company with ITINs separately, one company at a time.
It takes much more time and care, and big payroll providers don't want to deal with these administrative complexities.
That's not us. We won't avoid hard, complex work – we'll do what we need to for you to be compliant and include your ITIN workers on your payroll.
We won't tell you to get rid of employees with ITINs. They may be your best, most trusted workers. And we will tell you that paying employees off the books isn't the safest option for your business either.
Because Baron is not a giant company, it's easy for us to manage this process and get it right. We've been doing this successfully since we opened our doors in 2003.
And that’s it!
Now that you have learned that you can hire someone with an ITIN Number, hopefully, you’ll be able to make the right decision for your business.
If you found this article informative for you and your business, you may enjoy reading these other articles:
- How to Choose the Best Payroll Company for Your Small Business
- The Pros and Cons of Paying Employees with Payroll Paycards
- Why Employee Printback Checks are Good for Your Business
- How Will the New York State Secure Choice Retirement Savings Program Impact Your Business
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