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This question is about employer.
Can an LLC member also be an employee?
Yes, an LLC member can also be an employee. Though typically not the case, there are conditions whereby someone can be both a member and employee of an LLC.
LLC members are defined as individuals who share an ownership interest in a company and share in the gains and losses of the business. There are several exceptions that allow for members to also be employees.
A member can enter into an employment agreement with the LLC and provide services in exchange for salary and compensation. An example of this can be an LLC member hired to run the company's finances or the HR department.
If the LLC is a taxed corporation, it can choose to hire its members whose compensation will be a set salary. In such cases, the company earnings or profits are divided among members and serve as their salaries. This arrangement only works if the salaries awarded to members/employees are in line with reasonable industry salary standards.
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