Running a home is like setting up a small business. The same structure, hiring processes, and operational complexities are involved when it comes to employing domestic staffing.
What Are Tax and Labor Laws for Household Staff?
Many families organize payroll and taxes through their business office or a third party service. Whether you operate with a home office, business office or third party, you must have an employer identification number, confirmation that the employee is allowed to work and all relevant tax forms completed for each member of your staff. This includes W4 and I-9 forms.
In California, domestic workers are entitled to minimum wage and overtime pay at 1.5 times their regular rate of pay for any hours worked in excess of nine (9) hours in a day or in excess of 45 hours in a week. A 30-minute unpaid meal break for work periods more than 5 hours is required. Depending on the schedule, paid sick leave may also be required to offer domestic staff.
Most domestic workers are “at will” employees. This means that notice and reason does not have to be given before firing or letting go a employee. However, it is illegal for an employer to fire or threaten to fire a worker for exercising her workplace rights, such as complaining about violations to minimum wage or overtime, filing a claim for unpaid wages or reporting sexual harassment. It is also illegal for an employer to call or threaten to call immigration or the police on a worker for exercising her workplace rights. There are serious penalties if an employer threatens to call or calls immigration of the police in retaliation for the worker enforcing her workplace rights.
California does require worker’s comp to be provided for all domestic staff after they have worked in a home for a certain period of time. Most states require detailed records of payroll and income to be kept. If not required, specific record keeping is always encouraged to avoid discrepancies should problems arise in the future.
For more tax or legal guidance specific to your estate and state’s laws, please consult your financial team. Setting up your hiring process the correct way will save time and money for all future hires and ensure that you avoid any legal issues in the future.
What Constitutes Household Staff?
Household staff are hired to work in a private home. What differentiates domestic employees from contract workers is how autonomously they work. An independent contractor will work within their own schedule, use their own tools and operate within their own guidelines. For example, a plumber would be an independent contractor. Domestic employees work on a set schedule and process determined by the employer or homeowner. For example, your housekeeper working to your schedule and using the tools provided would be a domestic employee. This distinction applies whether an employee is live-in or live-out, part-time or full-time, hourly or salary.
*This introduction is presented as a resource for staffing your home. For tax or legal guidance specific to your estate and state’s laws, please consult your financial team. British American Household Staffing is able to provide advisement on salaries, benefits, schedule and any relevant tax information in your state.