Illinois Household Employment
Household employers need to comply with tax, wage, and labor laws that affect nannies, in-home senior caregivers, and other household employees. While federal laws cover employers in all states, there are also state- and city-specific regulations that employers must follow. Here’s what you need to know about Illinois household employment.
Household employees must be paid at least the highest of federal, state, or the applicable local minimum wage rate. State, city, and country rates in Illinois are all higher than the federal minimum wage of $7.25/hour and will apply depending on the location of work.
In Chicago, the minimum wage is $13.50/hour. This rate increases to $14/hour on July 1, 2021; $14.50/hour in 2022; and $15/hour in 2023.
In the rest of Cook County (outside of Chicago), the rate is $13/hour. An inflation-adjusted minimum wage rate will be announced each year by June 1.
The rest of Illinois has a minimum wage rate of $11/hour. The rate will increase by $1/hour every January 1 until it reaches $15/hour in 2025.
For the first 90 days with an employer, a worker can be paid up to 50 cents less per hour than the minimum wage.
Household employees in Illinois are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek.
To be considered a live-in employee, a household worker in Illinois must live at the home (place of employment) for at least five days a week, sleeping on the premises for four consecutive nights.
Live-in employees are not entitled to overtime pay and don’t need to be paid for time spent sleeping, eating, or for personal entertainment if they are completely free from all duties. However, they must be paid for these time periods if they are interrupted to perform work.
Domestic Workers’ Bill of Rights
Household employees in Illinois who are regularly employed for at least eight hours a week receive added protections under the state’s Domestic Workers’ Bill of Rights. Live-in employees and workers employed by an agency are also included. Occasional babysitters are excluded.
Under the Illinois Domestic Workers’ Bill of Rights, household employees must receive:
- An hourly pay rate of at least minimum wage
- At least 24 hours of rest in each calendar week and a 20-minute meal break for every 7 1/2 hours worked. The employee’s day of rest should, whenever possible, coincide with their religion’s traditional day of worship.
- Protections against sexual harassment
- Safeguards from being paid “an oppressive and unreasonable wage”
If a household employee voluntarily agrees to work on their day of rest, they need to be compensated at an overtime rate for all hours worked that day.
Part-time employees – working 20 or fewer hours in a calendar week – are excluded from the day of rest requirement.
Household employees must be paid at least twice per month. They should receive their pay no later than 13 days after the pay period ends.
Pregnancy Fairness Law
Household employers need to provide accommodations for pregnant employees and new mothers. The pregnancy accommodation law, also known as the Illinois Pregnancy Fairness Law, requires an employer to provide reasonable accommodations for an employee with conditions related to pregnancy, childbirth, or related medical conditions, if she so requests, with the advice of her health care provider. Learn more about what reasonable accommodations may include.
State Unemployment Tax & Rate
In Illinois, the new employer SUI (state unemployment insurance) rate is 3.125 percent on the first $12,740 of wages for each employee. Employers with previous employees may be subject to a different rate. This an employer-only tax.
Workers’ Compensation Insurance
Household employers in Illinois are required to have workers’ compensation coverage for any employee working at least 40 hours/week for 13 or more weeks. Get a quote on workers’ compensation insurance.
Chicago Paid Sick Leave
Household employers in Chicago must provide paid sick leave to their employees. Workers can accrue and use up to five paid sick days (or 40 hours) per year, earned at a minimum rate of one hour for every 40 hours worked. Accrual begins on the first day of employment. Up to 20 hours of unused sick time may roll over to the next year. However, employers can limit sick time usage to 40 hours per year. They can also restrict a new employee’s use of paid sick leave until they have completed six full months of continuous employment.
Employees can use paid sick leave if:
- they are ill or injured or need to receive medical care
- they are caring for an ill or injured family member, or a family member receiving medical care
- they are a domestic violence or sex offense victim
- their workplace or their child’s school/childcare facility is closed due to a public health emergency
If you already have a paid sick leave policy that meets or exceeds the required accrual rates, you do not need to create a new or separate plan to adhere to the city’s law.
Cook County Earned Sick Leave
Household employees who work at least 80 hours within any 120-day period for a family in Cook County are eligible for paid sick leave. They must be compensated at the same pay rate they regularly earn.
Paid sick leave starts to accrue on the first day after an employee starts work. For every 40 hours worked, a worker accrues one hour of paid sick leave. An employee can only accrue up to 40 hours of paid sick leave in a 12-month period unless their employer sets a higher limit. An employee can also carry over half of their unused paid sick leave – up to a maximum of 20 hours – into the next 12-month period.
The 12-month period is calculated from the date they began to accrue paid sick leave.
A household employer doesn’t need to provide additional paid sick leave if their paid-time-off policy meets the requirement for paid sick leave under the Cook County law. Household employers also do not need to pay for unused paid sick leave upon an employee’s termination unless they have agreed to do so in their work agreement.
An employee can start using paid sick leave no later than the 180th calendar day following the start of their employment. They can use paid sick leave when:
- they have illness or injury and need medical care, treatment, diagnosis or preventive medical care
- a member of their family has an illness or injury or a family member receiving medical care, treatment, diagnosis, or preventative medical care needs care
- they or a member of their family is a victim of domestic violence, sexual violence or stalking
When an employee quits or is involuntarily terminated, their final paycheck is due at the time of separation or no later than the next regularly scheduled payday. An employee can request to have their final compensation be paid by check and mailed.
All household employers need to follow certain federal regulations including:
Fair Labor Standards Act (FLSA) Classification Guidelines
- Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
- Household workers are also non-exempt employees, which means they receive overtime pay of at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.
Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,300 or more to any household employee in a calendar year, then you need to withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages. As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare). Your employee's share is also 7.65 percent, which you can withhold from their wages or choose to pay it yourself. You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under the age of 18 at any time during the calendar year.
Federal Unemployment Tax (FUTA)
If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is six percent of cash wages on the first $7,000 you pay an employee.
If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2021, the IRS has set the optional standard mileage rate at 56 cents per mile driven. Paying mileage is not mandatory or you can reimburse your employee at a different rate. However, if the cost of mileage causes your employee to fall below minimum wage, then you need to reimburse them for mileage.
GTM Can Help with Illinois Household Employment
Call (800) 929-9213 for a free, no-obligation consultation with a household employment expert. We’ll answer all your questions and show you how to comply with wage, tax, and labor laws as a household employer. Or, if you’re ready to have GTM Payroll Services handle it all for you, get started with our nanny payroll and tax service.
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Free Resources on Household Employment
- Nanny Tax Calculator
- Nanny Tax Guide
- Tax Forms
- Tax Calendar for Household Employment
- Free eBook Chapter: Managing Payroll and Taxes
- Payroll & Holiday Calendar
- Guides & Checklists
- Employer Responsibilities
- Domestic Workers' Rights
- Workers' Compensation Requirements
- Government Websites for Household Employers