The nuances of domestic employment can trip up even the most organized of domestic employers. Families need to follow tax, wage, and labor laws at the federal, state, and local levels. This can cause confusion and possible non-compliance, which means fines and penalties even for unintentional violations. Here’s what families need to know about California domestic employment when searching for or hiring a nanny or other household worker.
In California, the minimum wage is $10.50/hour for employers with 25 workers or less. However, many cities have their own minimum wage rates that are higher than the state. Remember the local rate supersedes the state rate.
There a couple of factors that determine when to pay a domestic worker at an overtime rate. Live-in and live-out employees are treated differently as well as household workers who are considered “personal attendants.”
Duties of a personal attendant include “supervising, feeding, and dressing a child or person who needs assistance due to advanced age, physical disability, or mental deficiency.”
If a domestic worker spends more than 20 percent of their time performing work other than supervising, feeding, and dressing a child or person who needs supervision, they are not considered a personal attendant.
Live-out domestic workers who aren’t personal attendants
Live-out employees are entitled to overtime pay of one-and-a-half times their regular rate of pay for hours worked over eight in a day or 40 in a workweek. They also receive overtime pay for the first eight hours worked on the seventh consecutive day of the work week. Double time kicks in for hours worked over 12 in a day and over eight hours on the seventh consecutive day of the work week.
Remember nannies are required to be paid by the hour and can’t be paid a salary.
Live-in domestic workers who aren’t personal attendants
Live-in employees are entitled to overtime pay of one-and-a-half times their regular rate of pay for hours worked over nine in a day and for the first nine hours worked on the sixth and seventh consecutive days of the workweek. Double time applies for hours worked over nine on the sixth and seventh consecutive day of the workweek.
Domestic workers who are personal attendants
Personal attendants are entitled to overtime of one-and-a-half times their regular rate for any hours worked over nine in a day or 45 hours in a workweek.
Workers’ compensation insurance is required in just about every domestic work situation. The only exceptions are employees who work for their parent, spouse or child. In California, workers’ comp is normally covered under your homeowners’ insurance. If it isn’t, you can obtain a policy through the California State Fund. The annual premium is based on the employee’s annual compensation. The state will monitor all quarterly tax filings and conduct an audit at the end of the year to make sure you paid the correct premium.
Domestic Workers’ Bill of Rights
California is one of several states to pass a Domestic Workers’ Bill of Rights into law. The legislation establishes overtime pay, meal breaks, days of rest, and human rights protections. Learn more about California’s Domestic Workers’ Bill of Rights.
As part of the Domestic Workers’ Bill of Rights legislation, Wage Order 15, which had previously exempted personal attendants from overtime pay, was amended to remove this exemption.
Paid Sick Leave
Household employees who work for 30 or more days within a year must be given at least 24 hours of paid sick leave annually. In addition, the cities of Los Angeles, San Diego, and San Francisco have paid sick leave laws that affect household employers.
Wage Theft Protection Notice
Household employers must provide their workers with written, detailed information on how much and when they are paid. The notice must include:
- rate of pay and whether paid by the hour, shift, day, week, etc., including any rates for overtime
- meal, lodging, or other allowances
- regular payday designated by the employer
- name, physical address, and phone number of the employer
- employer’s workers’ compensation insurance carrier’s name, address, and phone number
Household employers must give their workers an itemized written statement with every paycheck, which must include the following information for each pay period:
- total gross wages
- total hours worked
- any deductions
- net pay
- pay period dates
- employee’s name and the last four digits of the employee’s Social Security number
- employer’s full name and address
New Employer SUI Rate
The new employer State Unemployment Insurance (SUI) tax rate that all employers pay when they first become employers is 3.40 percent. Families that had employees previously may be subject to a different rate.
Taxable Wage Base
In California, the Taxable Wage Base is $7,000. This is the maximum income amount for which employees must pay Social Security taxes.
GTM Can Help with California Domestic Employment
Hiring a domestic employee in California or have questions about complying with the state’s tax, wage, and labor laws? Get a free, no-obligation consultation with a household employment expert at (800) 929-9213. It’s important to get nanny taxes and payroll done right to avoid fines and penalties for violating the law.