Household Workers: Employee vs. Independent Contractor

HWS client care specialists field inquiries about worker classification - whether a household worker is an employee or an independent contractor - all the time.  Families call questioning whether they can treat their household employee as an independent contractor, provide them a 1099 Form instead of a W-2, and avoid the entire issue of payroll taxes.

If you answer YES to all of the following questions, the nanny or household worker IS your employee:

Does the household worker provides service in your private home -or- another private home as part of a nanny share arrangement?

Do you have the right to control the worker's schedule and duties?

Did you/will you pay the household worker $1800 or more (2013) for services in the year?

Is the household worker is 18 years or older?

A household employee must be provided a Form W-2 - only true independent contractors are provided a 1099 form.

HomeWork Solutions has created this helpful video to help you and your employee understand the difference between a Household Employee and Independent Contractor:

Under common law, a worker who performs services for you is your employee if you can control what will be done and how it will be done. It does not matter whether you give your nanny great latitude, but rather that you have the right to control the work. It does not matter if the work is performed on a full time or part time basis. It does not matter whether the worker lives with you or not. It does not matter if he/she is paid hourly, daily or a salary. It does not matter how the employee refers to herself or how you refer to him/her in an employment contract. The household worker is your employee and you are generally obligated for all payroll tax filings and remittances.