2016 Household Employment Laws

It’s a new year, and with that come changes or new laws and regulations that impact employers across the country, including household employers. Here is a brief overview of 2016 household employment laws.

Minimum Wage

Minimum wage changes have already occurred in several states, with others to come later this year. The following list shows the states that have 2016 minimum wage changes and when those changes are effective.

Mileage Rate

The standard mileage rate changed on January 1st of this year to 54 cents per mile for business miles driven, a decrease of 3.5 cents from 2015. Household employers affected by this change should make sure to revise their expense reports and policies accordingly.

Nanny Tax Threshold

Also note that for 2016, the domestic employee coverage threshold amount has increased to $2,000, up from $1,900 last year; this means that you are required to pay taxes if you pay a nanny or other household employee at least $2,000 in a year. For those employees that earn more than $200,000 in a year, employers are required to pay an additional Medicare tax of 0.9 percent.

Domestic Worker Rights

One thing to keep an eye on this year is the proposed Domestic Workers’ Bill of Rights in Illinois. There is current legislation pending for this new law, which would follow along the same lines as the laws passed in New York, California, Hawaii, Massachusetts, Oregon, and Connecticut. Household employers in Illinois should begin following the progress of this bill, as it could become law this year.

For more information or to learn how GTM keeps household employers compliant with tax and labor laws, contact us at (888) 432-7972.