Are Domestic Workers Exempt Employees?

Jun 7, 2016 | GTM Blog, Household Payroll & Taxes, Tax & Wage Laws

are domestic workers exempt employees There has been a lot of news lately about the Department of Labor’s new rule regarding overtime exemptions for exempt employees. Many household employers may be wondering if they need to take notice of this rule and if it applies to domestic workers.

“Exempt” and “non-exempt” are employee classifications under the Fair Labor Standards Act (FLSA)—a federal law dating back to 1938 that requires certain employees to receive minimum wage and overtime pay. An exempt employee is exempt from these requirements.

The FLSA lists a number of exemption categories. The most commonly used are the executive, administrative, professional, computer, outside sales, and highly compensated employee exemptions. These are collectively known as the “white collar” exemptions.

Most of these exemptions require that the job pass a three-part test:

Duties: The employee has to do specific things regularly, such as use independent judgment or manage at least two people. Each exemption has its own duties test.
Salary level: A minimum salary must be earned; currently $23,660, but this will rise to $47,476 on December 1, 2016.
Salary basis: The employee is paid the same each week regardless of hours worked or the quantity or quality of their work.

If an employee meets all of the criteria under at least one of the FLSA’s exemptions, the employee qualifies as “exempt” and is not eligible for overtime pay. If the employee does not meet all of the criteria under one of these specific exemptions, they must be classified as “non-exempt,” and given overtime pay when applicable.

Are domestic workers exempt employees?

Any employee that currently earns $23,660 per year or less ($47,476 starting December 1st), regardless of their duties, are not exempt. Most nannies, senior care workers, and housekeepers would not be considered exempt (due to their duties and varying hours) and therefore must be paid overtime. But some household employees like estate managers, personal assistants, or house managers may qualify as exempt if they spend the majority of their time supervising, rather than performing tasks, and make the minimum salary required for exemption.