Many families pay their household workers directly and subscribe to a service such as HomeWork Solutions' Essential Payroll to prepare necessary quarterly and end of year tax documents. We are often asked about whether pay stubs are necessary.
Under Federal law, paystubs are not required but ARE recommended. (Note: 39states DO require a paystub or pay rate notice.)
Why are nanny or household employee paystubs recommended? First and foremost, a paystub serves as one of the types of wage and hour records required under the Fair Labor Standards Act's (FLSA) recordkeeping requirements. It is always a best practice to give your employee proof of how their wages were calculated (remembering that almost all household employees are HOURLY employees under the FLSA). Additionally, it is a best practice to further advise the employee of the itemized deductions from the gross wages.
In other words, the FLSA requires all employers, including household employers, to keep accurate and contemporaneous records of the hours worked, the hourly pay rate, the calculation of gross wages and overtime, if applicable, and records of all deductions made from the employee pay check. A paystub satisfies this recordkeeping requirement, with the exception of the daily time card.
HomeWork Solutions provides all clients who issue their own paychecks the ability to calculate and store their payroll records, including the ability to print a paystub for the nanny or housekeeper. At quarter end, a client simply needs to log in and forward all quarterly pay records electronically so HWS can complete the necessary tax documents.
Our new video will quickly and effectively explain nanny and senior caregiver paycheck deductions:
State Mandated Pay Rate Notices for Household Employees
California, the District of Columbia, Massachusetts and New York require Pay Rate Notices to all employees at time of hire: