Household employees - nannies, maids and housekeepers - and the families that employ them often don't understand how payroll tax, labor law, and the unemployment insurance system apply to this particular employment situation.
Unfortunately an article in today's New York Times was not completely correct and may have added to the confusion.
The facts are:
- Minimum Wage: Nannies, maids and housekeepers DO have minimum wage protections. Domestic service workers, with narrow 'companionship care' exemptions, have enjoyed the protections of the Fair Labor Standards Act (FLSA) since 1974. They are hourly employees, must be paid no less than the minimum wage, are entitled to overtime if they do not live with their employers, must be paid for all hours on duty and have the right to file a grievance if they are not paid properly by their employer.
- Unemployment Insurance: Domestic service workers are covered by unemployment insurance, and the families that employ them are legally obligated under state and federal law to comply with all tax reporting and payment regulations.
- Workers' Compensation: Twenty two states mandate that household employers obtain and carry a workers' compensation insurance policy to protect their nannies and other household workers. Among these are California, New York, Massachusetts and Maryland. Many other states allow families to obtain optional workers' compensation coverage.
HomeWork Solutions has an extensive Frequently Asked Questions that addresses these and other questions surrounding household employment. Have a question? Call us for a free telephone consultation at 800.626.4829.