Hiring Employees in North Dakota

Classifying Your Workers Correctly

Your company must distinguish properly between employees and independent contractors under IRS common law tests and North Dakota wage laws. You should evaluate behavioral control, financial control, and the overall relationship to decide if a worker belongs on payroll or can be treated as a contractor.

North Dakota follows federal rules for exempt vs nonexempt status, so you need to check duties tests and salary thresholds under the Fair Labor Standards Act when deciding who earns overtime. Misclassification can trigger back wages, unpaid overtime, tax assessments, interest, and penalties from both the IRS and state agencies.

If you are unsure, you can review federal guidance and resources such as Playroll’s employee misclassification guide at https://www.playroll.com/blog/employee-misclassification-guide to reduce risk. Documenting your classification analysis for each role will help you defend your decisions in audits or disputes.

Verify Employee Work Eligibility

Every time you hire in North Dakota, you must complete federal Form I‑9 within 3 business days of the employee’s start date. You must review original identity and work authorization documents, such as a U.S. passport or a combination of driver’s license and Social Security card, and record the details on the form.

North Dakota does not have a statewide E‑Verify mandate for private employers, but you may choose to enroll voluntarily or be required by certain federal or state contracts. You must keep I‑9s for the longer of 3 years after hire or 1 year after termination, and store them separately from general personnel files so you can produce them quickly in case of an inspection.

Create an Employee Onboarding Process

For each new North Dakota hire, you should issue a written offer letter outlining pay rate, exempt status, work schedule, and key policies. You will need to collect a completed federal Form W‑4, any state withholding form if applicable, direct deposit authorization if used, and signed acknowledgments for your handbook and required notices.

North Dakota requires you to report new hires to the State Directory of New Hires within 20 days, and you should provide information on workers’ compensation coverage and any benefit eligibility. Building a consistent onboarding checklist helps you control compliance risk and gives you clearer visibility into the full cost of hiring in North Dakota.

Pay Frequency & Methods

North Dakota law requires you to establish regular paydays and pay employees at least once per calendar month, though many employers choose biweekly or semimonthly schedules. If you discharge an employee, you must issue final wages by the next regular payday, while employees who quit must also be paid by the next scheduled payday.

If you fail to pay on time, your company can be liable for the unpaid wages plus potential damages and attorney’s fees in a wage claim. Keeping clear written pay policies and using reliable payroll systems helps you avoid late payments and recordkeeping errors.

Payment Methods (How You Can Pay)

You can choose among several payment methods in North Dakota, but you must always ensure employees receive full wages and an accurate wage statement each pay period.

• Payroll Check: You may pay by check drawn on a bank that allows employees to cash it at full face value without fees.
• Cash: You can pay wages in cash as long as you provide a written pay stub showing hours, rates, deductions, and net pay.
• Direct Deposit (EFT): You may use direct deposit only if the employee voluntarily authorizes it and can choose the financial institution.
• Paycards: You may use payroll cards if employees can access their full wages at least once per pay period fee‑free and receive clear disclosures.
• Outsourced Payroll: You can hire a third‑party payroll provider, but your company remains legally responsible for accurate and timely wage payments and filings.

When you hire employees in North Dakota, you must handle federal payroll taxes plus state income tax withholding and state unemployment insurance. You will need to register with the North Dakota Office of State Tax Commissioner and Job Service North Dakota before you run your first payroll.

Employer Tax Contributions

As an employer, you are responsible for paying your share of federal Social Security and Medicare taxes, federal unemployment tax, and North Dakota unemployment insurance. You must also withhold and remit North Dakota state income tax from employee wages once you have a state withholding account.

Employee Payroll Tax Contributions

Your employees fund part of the system through withholdings from each paycheck, and you must calculate and remit these amounts accurately and on time. This includes federal income tax, the employee share of Social Security and Medicare, and North Dakota state income tax.

Minimum Wage in North Dakota

North Dakota’s minimum wage is currently $7.25 per hour, which matches the federal minimum. You must pay at least this rate to nonexempt employees, subject to limited exceptions such as certain tipped employees who must still earn at least $7.25 per hour including tips.

Working Hours in North Dakota

North Dakota does not cap the number of hours adults may work in a day or week, but you must pay at least the minimum wage for all hours worked. State law has additional protections for minors, so if you hire employees under 18 you must follow youth employment limits on hours and occupations.

Overtime in North Dakota

North Dakota generally follows federal overtime rules, requiring you to pay 1.5 times the employee’s regular rate for all hours worked over 40 in a workweek for nonexempt staff. You should define your workweek consistently in writing and track all hours worked, including approved overtime, to avoid wage claims.

In North Dakota, most benefit requirements come from federal law, including the Affordable Care Act, which may require you to offer health coverage if you average 50 or more full‑time employees. Beyond legal minimums, offering competitive benefits such as health insurance, retirement plans, and paid leave can help your company attract and retain talent in a tight labor market.

Mandatory Leave Policies in North Dakota

Paid Time Off in North Dakota

North Dakota does not require private employers to provide paid vacation or general PTO, so you can design your own policy. Once you adopt a PTO or vacation policy, you must follow its terms consistently, including any rules on accrual, carryover, and payout at separation.

State law does not require you to pay out unused vacation at termination unless your policy or contract promises it, so you should state your payout rules clearly in writing. Transparent PTO practices help you manage costs while supporting employee wellbeing.

Maternity & Paternity Leave in North Dakota

North Dakota relies primarily on the federal FMLA for maternity and paternity leave, which can provide up to 12 weeks of unpaid, job‑protected leave for eligible employees after the birth or adoption of a child. To qualify, your company must have at least 50 employees within 75 miles, and the employee must meet federal service and hours thresholds.

The state does not mandate paid parental leave, but you may allow employees to use accrued PTO or short‑term disability benefits during time off. Offering a defined parental leave benefit can make your company more competitive in recruiting.

Sick Leave in North Dakota

North Dakota has no statewide requirement for paid or unpaid sick leave for private employers, so you decide whether to offer it and how it accrues. If you provide sick leave, you must administer it in a nondiscriminatory way and honor your written policy and any employment agreements.

You should also coordinate your sick leave or PTO policy with federal laws like the Americans with Disabilities Act, which may require reasonable accommodations for serious health conditions. Clear documentation of how employees request and use sick time reduces misunderstandings and disputes.

Military Leave in North Dakota

Employees in North Dakota who serve in the National Guard, reserves, or armed forces are protected by federal USERRA and state military leave laws. Your company must allow unpaid leave for covered military service and training and restore the employee to their job or an equivalent position when they return, subject to legal conditions.

You are not required to pay wages during military leave, but you must continue certain benefits and seniority rights as required by law. Make sure supervisors understand that they cannot retaliate against employees for taking military leave.

Jury Duty in North Dakota

North Dakota law prohibits you from firing or penalizing an employee because they are called for or serve on a jury. You must allow the necessary time off for jury service, but the state does not require you to pay employees for that time.

Many employers choose to provide some paid jury leave or allow employees to use PTO to avoid financial hardship. You can request proof of jury service, such as a court notice or attendance slip, and you should outline your expectations in your handbook.

Voting Leave in North Dakota

North Dakota does not have a specific statute requiring employers to provide voting leave, but you should still consider how work schedules affect employees’ ability to vote. Providing flexible hours, shift swaps, or unpaid time off can support civic participation and improve employee relations.

Because there is no mandated structure, you can design a simple voting policy that fits your operations, such as allowing up to 1 or 2 hours off when polls are open. Communicating this policy before elections helps avoid confusion on election days.

Bereavement Leave in North Dakota

There is no North Dakota law requiring bereavement leave, paid or unpaid, for private‑sector employees. Any time off following the death of a family member will depend on your internal policies or individual agreements.

Many employers voluntarily offer 1–5 days of bereavement leave depending on the relationship, and some allow employees to use PTO for additional time. A clear, compassionate policy can support employees during difficult periods while giving your managers guidance on approvals.

Termination Process

North Dakota is generally an at‑will employment state, meaning you or the employee can end the relationship at any time for any lawful reason. Even so, you should document performance issues, follow your disciplinary procedures, and avoid terminating for discriminatory or retaliatory reasons prohibited by federal or state law.

Notice Period

State law does not require you or the employee to give advance notice before termination in most private‑sector jobs. However, if you promise notice in an employment contract or policy, you must follow those terms or risk a breach‑of‑contract claim.

Severance

North Dakota does not mandate severance pay, so whether you offer it is a business decision. If you provide severance, you should document eligibility, amounts, and any release agreements in writing to ensure both sides understand the terms.