Case Study: Household Employee Overtime Pay

Jan 27, 2015 | Domestic Workers' Rights, Employee Benefits, Household Payroll & Taxes, Tax & Wage Laws

household employee overtime payHaving a household employee can be a complex and time-consuming process. Wage and labor laws are constantly being updated and revised; that’s why it’s always a good idea to trust an organization with the expertise to handle these issues. The following case study is an example of how a company like GTM can help an employer when it comes to household employee overtime pay.

The Situation

To tend to his newborn child’s needs, a household employer in New York sought to hire a live-in doula but wanted to avoid paying overtime and wanted the doula to work seven days a week, with her agreement.

GTM’s Solution

Prior to hiring the doula, the employer contacted GTM’s Household Employment Experts to learn how to document the doula’s daily pay. GTM advised him to:

  • pay his live-in household employee time-and-a-half of her regular hourly rate for all overtime hours worked. (State law mandates live-out household employees must be paid overtime after a 40-hour work week.);
  • pay the doula “waking hours” wages and implement one day of rest during the seven-day week for her to use as personal time;
  • maintain records of both time worked and paid to protect him if audited; and,
  • consult a labor lawyer to clearly and fully understand what is required under federal and state laws when hiring a doula.

The Results

The household employer fully understood federal and state wage requirements after consulting with GTM’s payroll and tax experts and altered his agreement with the soon-to-be-hired live-in doula according to GTM’s recommendations. He also agreed to limit the work week to six days, enabling the household employee one day off per week—despite the doula agreeing to a seven-day work week. If the doula chooses to work a seventh day, GTM noted that the household employer must pay her overtime.

The household employer then enrolled in GTM’s Easy Pay® payroll program, allowing GTM to handle the demanding responsibility of payroll and taxes. In addition, the household employer contracted with GTM to ensure compliance with New York’s mandatory workers’ compensation and disability insurance requirements.

For more information, contact GTM at (888) 432-7972.

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