Nanny Taxes in New York
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 nanny taxes in New York.
New York Minimum Wage
Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates.
New York has various minimum wage rates depending on the location of work.
In New York City, the minimum wage is $15/hour for employers with 10 or fewer employees.
For Nassau, Suffolk, and Westchester counties, the rate is also $15/hour.
The rest of New York State has a minimum wage of $13.20/hour with annual increases until the rate reaches $15/hour. These increases will be published before October 1. They will be based on economic indices, including the Consumer Price Index.
Household employees in New York are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime compensation is not required when work is performed on a holiday. While federal law exempts live-in employees from overtime requirements, New York requires live-in household workers to be paid at least time and a half for hours worked over 44 in a week.
New York State Unemployment Tax & Rate
In New York, the new employer SUI (state unemployment insurance) rate is 4.025 percent, and the re-employment services fund (RSF) rate is .075 percent for a total obligation of 4.10 percent on the first $12,000 of an employee’s wages. Employers with previous employees may be subject to a different rate. This is an employer-only tax.
Workers’ Compensation Insurance
Household employers in New York are required to have workers’ compensation coverage for any employee working 40 hours or more per week. This applies to live-in and live-out employees. Get a quote on workers’ compensation insurance.
Disability Benefits Insurance
New York is one of five states that require household employers to make additional employee withholdings for disability benefits insurance. This program provides short-term benefits to employees who are unable to work due to a non-work-related illness or injury including pregnancy. Disability insurance may be purchased from any insurance company authorized to write disability benefits insurance in New York including the State Insurance Fund. You are authorized to collect from your employee, through a payroll deduction, a contribution of 0.5 – one percent of wages paid, but not in excess of 60 cents per week. You can also make this contribution on behalf of your employee.
Learn more about complying with New York’s Disability Benefits Law.
GTM Payroll Services can manage your disability insurance coverage including employee withholdings. Call (800) 929-9213 for more information.
Domestic Workers’ Bill of Rights
New York was the first state to pass a Domestic Workers’ Bill of Rights, which took effect on November 29, 2010. The law covers full-time workers including immigrants regardless of their immigration status. Relatives and part-time workers like babysitters aren’t included.
Under New York’s Domestic Workers’ Bill of Rights, household employees must receive:
- An hourly pay rate of at least minimum wage
- Overtime pay of at least time-and-a-half for hours worked over 40 in a week (44 hours for live-in employees)
- Weekly pay
- At least three paid days off after one year of employment with the same employer
- At least one day of rest per week. Employees can agree to work on their day of rest at an overtime pay rate. Employers are encouraged to coincide the rest day with the employee’s day of worship (if they have one)
- Written notice on work policies including sick leave, vacation, personal leave, holidays, hours of work, pay rate, overtime rate, and payday
The law also requires household employers to pay unemployment insurance, obtain workers’ compensation insurance, and acquire disability insurance.
Paid Sick Leave – New York State
Under New York State’s Paid Sick Leave Law, household workers employed in the state can use job-protected, paid, or unpaid sick leave for certain designated purposes beginning January 1, 2021. Families with between one and four employees must provide up to 40 hours of unpaid leave. Households with five or more employees are required to provide up to 40 hours of paid sick leave. Sick leave can be used for treatment, care, preventative care, and diagnosis for an employee’s or employee’s family member’s illness, injury, or health condition. Household employees accrue sick leave at a rate of at least one hour per 30 hours worked. Household employers now must provide a summary of the amounts of sick leave accrued and used in any calendar year within three business days of an employee’s request. Employers must also retain records of leave accrual and usage for each employee for six years.
Learn more about New York State’s Paid Sick Leave.
Paid Family Leave – New York State
New York State employers – including household employers – are required to provide paid family leave (PFL) to their employees. Paid leave can be taken for various family or medical reasons including:
- Bond with a newborn, adopted, or foster-care child during the first 12 months after birth or placement
- Care for a seriously ill family member
- Address important needs related to a family member’s military service
Paid family leave is also available in some situations when an employee or their minor, dependent child is under an order of quarantine or isolation due to COVID-19.
Employees who work 20 or more hours a week and at least 30 days in a calendar year are covered. Full-time employees are eligible after 26 consecutive weeks of employment and part-time employees who work 20 hours or fewer per week are eligible after 175 working days (doesn’t need to be consecutive).
The program is paid for by employees through an additional payroll deduction. Or, as an employer, you can pay the cost on your employee’s behalf. The contribution rate beginning January 1, 2022, is 0.506 percent plus a risk adjustment of 0.005 percent for a total of 0.511 percent of an employee’s wages. The annual maximum contribution is $423.71. Employees taking paid family leave receive 67 percent of their average weekly wage up to a maximum weekly benefit of $1,068.36.
GTM Payroll Services can manage Paid Family Leave payroll deductions for household employers. Call (800) 929-9213 to get started.
Learn more about New York State’s Paid Family Leave.
Paid Safe and Sick Leave – New York City
New York City’s Paid Safe and Sick Time Act (also referred to as the Earned Safe and Sick Time Act or ESSTA) requires household employers to:
- provide nannies, housekeepers, and other domestic workers with 40 hours of paid safe and sick leave
- allow employees to use safe and sick leave as it is accrued;
- reimburse employees who must pay for required documentation after three consecutive workdays of leave;
- list on employees’ paystubs (or any document issued each pay period):
- amounts of accrued and used sick and safe leave during the pay period
- total balance of accrued safe and sick leave
Leave must be paid at the employee’s regular rate.
New York City’s paid sick leave law was amended to require employers to provide workers who are parents or legal guardians of a child with four hours of leave for COVID-19 child vaccination time, per injection and per child. The amendment became effective on December 24, 2021, and is retroactive to November 2, 2021. An employee who is a parent may use child vaccination leave to either accompany the child to get a COVID-19 vaccine injection or care for their child who is experiencing temporary side effects from vaccination. For employees of an employer with five or more workers, this child vaccination leave is paid. If the employer has fewer than five workers, then the leave is unpaid.
To be eligible, the employee’s child must be under 18, or a child of any age who is incapable of self-care because of a mental or physical disability. Child vaccination leave is in addition to any existing sick leave provided to the worker. An employer cannot require their workers to work additional hours to make up for the time missed. However, employers may require up to seven days of “reasonable notice” of the need to use child vaccination leave. An employer can also request reasonable documentation showing the child’s receipt of the COVID-19 vaccination injection within seven days of use of the leave. Child vaccination leave must be paid at the employee’s regular rate of pay.
Learn more about New York City’s Paid Safe and Sick Time Law.
A household employee who is asked to work a 24-hour shift only needs to be paid for 13 of those hours as long as they are provided with eight hours for sleep and three hours for meal breaks. If the employee’s meal breaks are interrupted or if they do no get five uninterrupted hours of sleep, they must be paid for the entire break.
Learn more about New York’s 13-Hour Rule.
Sexual Harassment Prevention Training
Employers in New York State – including household employers – must provide annual sexual harassment prevention training for their employees and are required to establish a sexual harassment prevention policy.
New York State provides a model sexual harassment policy that employers can adopt as their own.
Domestic Violence Victim Leave
New York employers must grant leave for domestic violence victims. You must provide a reasonable amount of leave to:
- Seek medical attention for injuries caused by domestic violence (including for a child victim);
- Obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence;
- Obtain psychological counseling related to an incident of domestic violence (including for a child victim);
- Participate in safety planning and take other actions to increase safety from future incidents of domestic violence, including temporary or permanent relocation; or
- Obtain legal services, assist in the prosecution of the offense, or appear in court in relation to the incident of domestic violence.
An exception will be granted if you can show the leave will cause you undue hardship. Employees may need to provide advance notice of the leave or documentation of the leave when it is not foreseeable.
Failure to provide the leave as required will constitute an unlawful discriminatory practice and you could be subject to civil fines and penalties of up to $50,000, or $100,000 if the violation is found to be willful, wanton, or malicious. Victims may also be awarded back pay and damages. Employers must maintain the confidentiality of any information about an employee’s status as a victim of domestic violence, to the extent allowed by law.
New York State Human Rights Law
The state’s Human Rights Law (HRL) has expanded protections to individuals employed as domestic workers. Previosuly, domestic workers were only covered by the Human Rights Law’s antidiscrimination protections in certain circumstances. Now, domestic workers are considered “employees” for all purposes under the Human Rights Law and have the full protections of the HRL’s employment provisions. A person does not need to live with their employer to be considered a domestic worker. Additionally, the law does not cover any individual employed by their parents, spouse, or child.
Employers are prohibited from discriminating against domestic workers due to age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, domestic violence victim status, favorably resolved arrest record, or because the individual has opposed any practices forbidden under the HRL or because the individual has filed a complaint.
In some situations, the employee’s sex might be considered a bona fide occupational qualification. If something is a bona fide occupational qualification, it means it is essential to performing a job.
If a household employee voluntarily leaves their job or is terminated, the family must pay the worker’s wages no later than the regular payday for the pay period during which termination occurred. An employee can request that their wages be paid by mail.
Helpful Links for Nanny Taxes in New York
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 $2,400 or more to any household employee in 2022 (or paid $2,300 in 2021), 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 the remainder of 2022, the IRS has set the optional standard mileage rate at 62.5 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 Nanny Taxes in New York
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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