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FLSA - Compensation Rules Live-In vs. Live-Out Caregivers

Posted by HomeWork Solutions on 12/6/23 11:11 AM
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Whether you are hiring a nanny, a caregiver for an elderly family member, or any other domestic worker, understanding the Fair Labor Standards Act (FLSA) live-in and live-out designations, is crucial. These federal guidelines ensure fair treatment and compensation for domestic workers, based on the residential status required of their position.

Let's explore the key differences between live-in and live-out domestic employment under the FLSA, and the different compensation required for each.

Live-In Domestic Employees:

Live-in domestic employees are individuals who reside within your household permanently or for an extended period of time, defined as either five days per week or five consecutive days.  Common examples include live-in nannies, caregivers, and housekeepers. The FLSA regulations for live-in employees are designed to strike a balance between ensuring their well-being and providing flexibility for employers. There are specific FLSA requirements to keep in mind:

  1. Compensation: Live-in domestic employees are entitled to a regular hourly wage. Employees must receive at least the federal or state minimum wage, whichever is higher, unless they meet FLSA companionship services requirements.
  2. Work Hours: The FLSA allows for uncompensated "sleep time" of up to 8 hours BOTH contiguous with a scheduled work day and truly affords the caregiver a minimum of 5 hours of uninterrupted sleep. California does not permit the exclusion of sleep time. Additionally, time spent on call and relieved of all work duties, does not need to be counted as working hours under FLSA. Some employers choose to offer pay for on call time to encourage candidate applications, and employee retention.
  3. Overtime: Live-in domestic employees are not required to be paid overtime under FLSA.  However, many states have different rules and regulations, and the regulation most advantageous to the worker must always be applied.

Live-Out Domestic Employees:

Live-out domestic employees, as the name suggests, do not reside within the employer's household. They commute to work and return to their own homes at the end of their shifts. This arrangement offers greater separation between personal and professional life. The FLSA requirements for live-out domestic employees are more straightforward:

  1. Compensation: Live-out domestic employees are paid on an hourly basis. Employees must receive at least the federal or state minimum wage, whichever is higher, unless they meet FLSA companionship services requirements
  2. Work Hours: Their working hours should be clearly defined, and overtime pay must be provided if they work more than 40 hours in a week.
  3. Overtime: Overtime rules apply to live-out employees, and they must be compensated at the overtime rate for hours worked above 40 in a week.
  4. Rest and Meal Breaks: Employers should allow for rest and meal breaks as required by federal, state, and local law. Each law specifies if a break is paid or unpaid, and in some cases how an employee should be paid if a break is consensually not provided.

Whether you're hiring a live-in or live-out domestic employee, understanding and abiding by the FLSA regulations is vital. It not only protects your employees' rights but also ensures a harmonious and productive working relationship. Treat your domestic workers with respect, and they will reward you with dedication, loyalty, and outstanding service. After all, a happy home is one where everyone's needs are met, including those of your domestic employees.

If you still have questions about your domestic employment arrangements, and how to pay your employee correctly, give us a call. Our friendly household payroll and tax pros will make sure you understand your obligations. If you are looking for a comprehensive service to take care of all of your household payroll and tax needs, ask one of our pros about our turn-key solutions.

Topics: nanny agency, senior care, nanny, Senior Caregiver Payroll, agency, senior, CPA

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