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It is the responsibility of every household employer to pay and treat their employee(s) fairly and professionally in accordance with the Fair Labor Standards Act and IRS Publication 926 (Household Employers Tax Guide). Please use the following information to ensure you are in compliance with labor laws as they apply to nannies and other household employees.
Workers Compensation and Disability
Most states require a household employer to carry a workers’ compensation and/or disability policy if the employer employs someone on a full or part-time basis. These policies will protect
the employer from lawsuits and liability in the event that their employee is injured in their home while performing their job. The employee, in turn, is entitled to certain medical and wage-loss compensation. See our list of Workers’ Compensation Requirements by State. If the state law requires the employer to have workers’ compensation, GTM advises household employers to contact their state’s insurance fund or their insurance agent. Learn more about why having a workers’ compensation policy is important for household employers.
Overtime
Federal law states that overtime is to be paid to all live-out household employee positions after 40 hours per week at 1.5 times the hourly wage. The laws for overtime vary state by state. GTM recommends that each household employer refer to overtime law for the state the employee will work in. GTM advises that the employer investigate the laws with regard to full-time/parttime and live-in/live-out positions as they may differ. Live-in employees do not have to be paid overtime and overtime is not required to be paid for holidays worked. Learn more about overtime guidelines for household employers.
Minimum Wage
According to the Federal Labor Standards Act, all household employees must be paid at least minimum wage. GTM recommends that all household employers are in line with their state’s minimum wage requirements. If the employee works in a state with a higher minimum wage, the employer should pay that state amount. Please keep in mind that many states and some cities are increasing their minimum wage for 2014 – view our guide to see if your state is affected.
Time-Off
Although paid vacations, holidays, and sick days are not required by law, GTM supports household employers providing these benefits to their employees to help retain quality caregivers, as well as attracting new candidates. One of the more popular changes that we have seen in recent years is the transition away from a traditional vacation, sick, and personal leave benefit policy in favor of a more flexible, all-inclusive “Paid Time Off” or “PTO” policy. Additionally, we recommend sending all employees the 2014 holiday schedule at the beginning of the year so they may plan accordingly. Some states may have legal obligations for the employer with regard to time-off. Employers are advised to investigate with their own state’s Department of Labor.
Termination
All employees are obligated to let the employee know that they may collect unemployment insurance in the event of termination. If you have provided health insurance for your nanny or other employee, follow COBRA by offering the employee the option to continue his/her coverage. Even if exempt from COBRA requirements, consider extending to the employee an option for continued health insurance coverage.
For questions or more information about nanny labor laws and other household employer requirements, please contact the Household Employment Experts at GTM.
