The California Domestic Workers' Bill of Rights (CA DWBR), which went into effect in 2014, along two other pieces of recent legislation obligate California household employers to special responsibilities. Recently the January 1, 2017 sunset provision of the 2014 CA DWBR legislation was repealed - a significant victory for domestic worker rights advocates.
California household employers must first make a determination, based on the nature of the work performed, whether their employee is a domestic service worker or a personal attendant. Duties determine the applicablity of Wage Orders and employee protections in California. It's a bit complicated!
All household employees are entitled to pay at no less than the applicable minimum wage. The California minimum wage is currently $10.00 per hour. Be careful though - many localities have adopted so-called "living wage" minimums that exceed the state wide minimum, and the rate most advantageous to the work is always applied. The UC Berkeley Labor Center maintains a comprehensive listing of local minimum wage ordnances.
Domestic Service Workers v. Personal Care Attendant
Who are Domestic Service Workers?
Domestic service workers covered by the CA DWBR provide services related to the care of people in a private home, or maintain private households or their premises. Domestic services workers include nannies, senior caregivers and personal attendants, house managers, maids, housekeepers, cooks, and other household workers.
Personal Care Attendant: How is this defined?
A personal care attendant according to California law is “any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision.” A personal attendant may provide “incidental” housekeeping services such as laundry, bed-making, cooking and cleaning, so long as the “incidental” do not exceed 20% of their time on duty.
Examples of a personal attendant include nannies and senior caregivers, so long as their job duties do not include more than “incidental” housekeeping functions.
The distinction between personal care attendant and domestic service worker is important for the calculation of overtime pay.
Hourly Pay and Overtime
All household workers, whether Personal Care Attendants or Domestic Service Workers are HOURLY pay employees and entitled to overtime as directed by the appropriate California Wage Order.
Personal Care Attendants: Under the CA DWBR, a live-in personal care attendant must be paid at an agreed hourly rate, and is entitled to overtime calculated at 1.5 times the hourly rate for hours worked over 9 in a single day or more than 45 in a defined 7 day work week. Live-out workers who meet the definition of a personal attendant are entitled ot overtime for hours over 9 in a day (state law) or 40 in a week (Federal law).
The CA DWBR applies to personal attendants employed by a private household (either directly or via referral from a registry service) and those employed by third-party agencies. A family who engages a personal care attendant via third-party referral must CAREFULLY determine who the legally responsible employer is for payroll tax and workers compensation insurance purposes. Your contract with the third party referral will either clearly state that the agency employs the caregiver and is responsible for all tax and insurance compliance, or you must assume that the private household is the legal employment entity.
Domestic Service Workers: Household employees who do not meet the definition of a personal care attndant have overtime protections covered in Wage Order 15. Examples of domestic service workers include nannies with housekeeping duties, housekeepers, maids, and senior caregivers providing homemaker services (personal laundry, household linens, maid services such as vacuuming, dusting, mopping, bathrooms).
A domestic service worker who resides with the employer, such as a live-in housekeeper, must paid at an agreed hourly rate, and is entitled to overtime calculated at 1.5 times the hourly rate for hours worked over 9 in a single day or more than 45 in a defined 7 day work week. Live-in domestic service workers must have at least 12 consecutive hours free of duty during each 24 hour workday. A live-in domestic service worker in CA who is required or permitted to work during off duty hours must be compensated at 1 1/2 times their regular hourly rate (ie. overtime rate). Live-in domestic service workers who works more than 5 consecutive days per week has additional overtime and double-time pay protections as defined in Wage Order 15.
Come and go or live-out domestic service workers are entitled to overtime pay for hours over 8 in a workday or hours over 40 in a defined 7 day workweek, and double time (2x the hourly rate of pay) for hours over 12 in a workday. Additional overtime and double time pay protections are provided to domestic service workers who work 7 days per week - see Wage Order 15 3 (C) for details.
Meal and Rest Breaks
California domestic service workers, exclusive of personal attendants, have the right to a 30 minute unpaid meal time when working more than 5 hours, and the right to two 30 minute unpaid meal breaks when working more than 10 hours in a day. These same workers are entitled to paid rest periods: 10 minutes for shifts of 3.5 - 6 hours, 20 total minutes for shifts greater than 6 - 10 hours, and 30 total minutes for shifts greater than 10 - 14 hours. The worker is to receive one additional hour of pay for every day that they are not provided their appropriate rest time.
- Unemployment Insurance: Unemployment insurance is required for any employee you pay over $1000 per calendar quarter.
- Worker’s Compensation Insurance: This insurance is required for all California employment and covers workers (and you) if they are injured on the job.
- State Disability Insurance: This insurance covers an employee who cannot work because they are injured or sick (this includes pregnancy) as a result of something that does not occur in the course of their work. All employers with payroll of $750 or more in a calendar quarter must pay this tax
- Health Insurance: You are not required to provide health insurance to your employee.
- State and Federal Payroll Taxes: The employer is responsible for unemployment tax and the employer’s portion of the FICA taxes. The employer is entitled to withhold the employee's portion of the FICA taxes from the nanny's wages; however, if the employer does not withhold the EMPLOYER remains responsible to pay this tax to the IRS.
- State and Federal Income Taxes: Income taxes are the nanny's responsibility. The nanny may ask and the employer may agree to withhold federal, state, and local income taxes from the worker’s paycheck. The domestic employer is not required to withhold income taxes, it is an accommodation to the worker.
- Reporting: The worker and the employer must file certain forms to comply with tax requirements. To learn more about your tax responsibilities, call HomeWork Solutions at 1-800-626-4829 for a free consultation or visit us here for to learn about our payroll and tax compliance services.
California Wage Theft Protection Act: Mandatory Notice of Pay to CA Employees
Household employers must provide written pay notification to employees at the time of hire, and any time a pay rate change occurs, that includes:
- Hourly and overtime pay rates per hour, as well as any special pay rates.
- The regular pay day.
- The employer's name, physical address, and telephone number.
- The name, address, and policy number of the employer's Workers' Compensation Insurance Carrier.
Additionally, employers are required to provide any notice of change to any of this information within seven days of the change. A sample CA pay rate notice may be downloaded from the HomeWork Solutions website.
California household employers are required to provide a pay stub with every payroll which documents the total hours worked, the total gross wages, all deductions, the net pay, as well as employer and employee names, employer address and the last 4 digits of the employee's SSN or tax id number.
Bottom line, California household employers should review their record-keeping systems and ensure that they maintain the required records, including the CA pay rate notice, and any new notices, for at least three years.
Fine for Willful Misclassification of Employees as Independent Contractors
In California, a household employer who treats their household employee as an independent contractor (issues a Form 1099 instead of a Form W-2) can be fined between $5,000 and $25,000 per occurrence. The law's definition of "willful misclassification" is any employer avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. In addition to the fine, employers who are found to have incorrectly classified employees as independent contractors are responsible for paying all taxes not previously withheld, all employer taxes, and any penalties and interest on the unpaid taxes.
We have a discussion on classification of nannies and other household employees for your review. If you would like to seek legal counsel, we refer CA clients to Bob King, Esq., the founder of Legally Nanny.
What Actions Should California Household Employers Take?
- Review written work agreements, paying particular attention to duties and compensation language.
- Institute time tracking that is DAILY. Accurate and contemporaneous records of days and hours worked is an employer obligation. Protect yourself!
- Understand the distinction between personal care attendants and domestic service workers and the overtime pay regulations that apply to your employment situation.
- Understand meal and rest breaks – on duty v off duty. If the employee is not free to leave the premises during a break, it is on duty. This applies even if the children are napping for example.
- Comply with California pay rate notification requirements.