Massachusetts 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 Massachusetts household employment.
Household employees must be paid at least the highest of federal, state or the applicable local minimum wage rate. Massachusetts’ state minimum wage of $13.50/hour applies. This rate will increase by 75 cents/hour every year until it reaches $15/hour in 2023.
Household employees in Massachusetts are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek.
State Unemployment Tax & Rate
In Massachusetts, the new employer SUI (state unemployment insurance) rate is 2.42 percent on the first $15,000 in wages. Employers with previous employees may be subject to a different rate. This an employer-only tax.
Workers’ Compensation Insurance
Household employers in Massachusetts are required to have workers’ compensation coverage for all part- and full-time employees. Get a quote on workers’ compensation insurance.
Domestic Workers’ Bill of Rights
Massachusetts was one of the first states to pass a Domestic Workers’ Bill of Rights, which took effect on April 1, 2015. The law provides clear guidelines for household employers and their workers.
Under Massachusetts’ Domestic Workers’ Bill of Rights, household employees must receive:
- Pay for all working time when required to be on their employer’s premises or on duty
- At least 24 consecutive hours of rest per week if they work at least 40 hours/week
- Overtime pay of at least time and a half for hours worked over 40 in a week or if they work on their day of rest
- Eight weeks of maternity leave for the birth or adoption of a child
- A written employment agreement that includes their rate of pay, overtime pay rate, working hours, days of rest, sick days, vacation days, holidays, health insurance, severance, other benefits, job responsibilities, process for addressing grievances, right to workers’ compensation, and required notice for termination by employer.
- A written evaluation, if requested, after three months of employment and then annually thereafter
- Protection against retaliation (can’t be fired or discriminated against when seeking fair wages and overtime)
Also, a household employer must keep all notices, payroll records, and work agreements for at least three years.
Paid Family and Medical Leave (PFML)
Massachusetts PFML will provide temporary income replacement to household employees who are welcoming a new child into their family, are struck by a serious illness or injury, need to take care of an ill or ailing relative, and for certain military considerations. Employees may take 12 to 26 weeks of job-protected paid leave. This benefit will be available to employees beginning in January 2021. However, employers will be required to comply with the PFML law beginning October 1, 2019.
Families are responsible for sending PFML contributions to the Department of Family and Medical Leave (DFML) on behalf of their employees.
The family leave contribution is 0.13 percent of wages and the effective contribution for medical leave is 0.248 percent of wages (employees pay 40 percent of the amount owed for medical leave, which is 0.62 percent of wages).
As a household employer, you likely have less than 25 workers, so you are not required to pay the employer share (the remaining 60 percent) of the medical leave contribution.
You may choose to cover all or a portion of your employees PFML contributions in order to reduce or eliminate the amounts owed by your employees.
GTM Payroll Services can manage Paid Family and Medical Leave payroll deductions for household employers. Call (800) 929-9213 to get started.
Learn more about Massachusetts Paid Family and Medical Leave.
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 Massachusetts 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