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Household employers are required to meet or exceed local, state and federal labor laws.
(Please note that many states and municipalities have unique nuances to the general laws
described below. Give us a call and we'll give you a complimentary, no-obligation consultation
so you’ll know all the laws that may affect you). Generally, however, the following labor law issues apply:
Minimum Wage. Household employees must be paid at a rate that meets or exceeds the Federal
Minimum Wage standards -- currently $7.25 per hour. Important Note: Many states have higher Minimum Wage standards.
In those cases, the higher wage standard applies. For minimum wage laws by state, visit your state website or the Department of Labor.
Mileage Reimbursement. Employees who are asked to use their own car while on the job should be reimbursed at a rate of 56 cents per mile. This covers the cost of gas plus wear and tear on the car. Commutes to and from work each day are not considered "on the job" and, therefore, employers are not responsible for any reimbursement on those miles. If money is paid to the employee to defray the cost of commuting to and from work each day, it is considered taxable income and should be reported as part of the employee's compensation.
Overtime. Household employees are classified as "non-exempt" workers, and federal overtime law dictates that non-exempt workers must be paid overtime if they work more than 40 hours in a 7-day work week. Overtime is calculated at a rate of 1.5 times the regular rate of pay. Overtime law applies whether the employee is paid on an hourly or salary basis; it's the occupation - not the type of pay - that determines overtime requirements.
Exception for Live-In Employees: In most states, families are not required to pay live-in employees at the overtime rate, but they must pay the employee for every hour worked.
It is legal to pay your employee a salary and have the overtime hours included in the compensation. To accomplish this, you must have a written employment agreement that explicitly details the regular rate of pay and the overtime rate of pay. If you'd like help calculating the regular and overtime pay rates or the employment agreement language, just let us know.
Paid Time Off for Vacations/Sickdays/Holidays. Household employers typically are not required by law to provide paid vacation, sick days or holidays. While these perks are an effective way to attract and retain good employees, household employers are generally not legally obligated to offer them. There are a few exceptions, so please call for details.
Workers' Compensation. Employers in some states are required to carry a workers' compensation policy on household employees. Workers' compensation is not a tax; its an insurance policy that helps cover lost wages and medical expenses due to work-related injury or illness. It also protects the employer, since workers who accept the benefits generally forfeit their right to sue - regardless of fault. To learn about the requirements in your state,
If workers' compensation is legally required in your state - or you elect to carry it - we can guide you to a policy solution. In many states, our exclusive partner can write a stand-alone workers' comp policy. With free instant quotes, a streamlined application process, and expert claim support, this family-friendly product makes workers' compensation extremely easy to obtain and manage.
In other states, the easiest solution may be a call to your homeowner's insurance agent. If you decide to become a HomePay client, please know that we'll guide you through your workers' compensation options as part of your registration process.
Legal Work Status. According to the law, employers are required to verify that workers are legally permitted to work in the United States. Specifically, the government asks each employer to utilize Form I-9, which verifies the identity and employment eligibility of all citizens and foreign nationals. Recent regulations issued by the Department of Labor establish "caregivers" as a skilled worker category for employment based on green card petitions. For American families who hire foreign-born caregivers, this means legal immigration options are available under certain circumstances.
Obviously, with pending reform of immigration laws, the employment verification regulations and procedures may change quite rapidly. We recommend that employers interested in sponsoring a foreign worker contact an attorney specializing in immigration law.
Given the large number of undocumented workers currently residing in the United States and working in household jobs, most experts agree on two points:
The U.S. Citizenship and Immigration Services (CIS) and the Internal Revenue Service
(IRS) work together to create an environment in which undocumented workers can pay
taxes without fear of deportation. Many illegal workers and their employers wrongly
assume that it is safer to fly “under the radar” by not filing tax returns. In reality,
the opposite is true; by paying taxes, the CIS views the worker as a contributing
member of society – helping to pay for schools, hospitals, roads, and other government
services. The CIS does not have any directive to force these contributing residents
to leave the country.
Those who are contributing members of society will receive preferential treatment
if there is a question about who should stay and who should go. If an undocumented
worker wants to remain in the United States, the wisest thing they can do is make
sure their earnings are reported and taxes are paid each year.
In rare circumstances, there are other legal issues that come into play for household employers. If you have any questions about your particular employment situation, feel free to give us a call. It might save you a bundle in legal fees and headaches down the road.
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