You may owe taxes for people who work in your home.
Examples of household workers are the following:
Babysitters, companions for the elderly or infirm, maids, caretakers, nurses, housekeepers, cooks, butlers, family chauffeurs, and maintenance personnel.
Independent contractors, self-employed persons and representatives of an agency or au pair program who work in or around the home are not employees, for Federal purposes.
Initial Steps When Hiring
In addition, an employee who does not have a social security number (SSN) can get one by completing Form SS-5, Application for a Social Security Card. This form can be obtained at local offices of the Social Security Administration or by calling 1-800-SSA-1213.
The employer’s identification number (EIN) is issued by the Internal Revenue Service. The EIN is used to complete quarterly and annual employer’s tax forms. An employer can apply for an EIN by completing Form SS-4, Application for Employer Identification Number. The Form SS-4 can be ordered by calling 1-800-TAX-FORM. If the employer’s tax forms are being filed for the first time and the employer has not applied for an EIN, the employer should write “NONE” in the space provided for the EIN. The Internal Revenue Service will then assign an EIN.
Minimum Wage and Overtime Pay
Under the Federal Labor Standards Act (FLSA) domestic workers are entitled to minimum wages and overtime pay. However, casual babysitters and companions for the elderly and infirm may be exempt from coverage. The Federal minimum wage is currently $7.25 per hour. Some States’ minimum wage rates are higher than the Federal rate, in which case the higher rate should be paid. The FLSA permits costs to employers of providing certain facilities, such as meals and lodging, to be counted as part of wages. However, meals and lodging are not subject to social security and Medicare taxes if they are furnished for the employer’s convenience, ’s premises, and as a condition of employment.
Domestic workers are also entitled to 1=times their regular rate of pay for hours worked in excess of 40 hours a week unless the employee resides in the household where employed. The FLSA does not require premium pay for weekends, vacations, holiday work or daily overtime; nor does it require rest periods, discharge notices or severance pay. Also, FLSA does not limit the number of hours an employee may be required or scheduled to work, if the employee is age 16 or older. However, some State or local laws may address these matters. More detailed information about FLSA can be obtained from the Wage and Hour Division of the Employment Standards Administration, U.S. Department of Labor. The address and phone number can be found under the Federal Government Section of the local telephone directory.