Hiring Someone to Work in Your Home
04-11

You may owe taxes for people who work in your home.

Definition of “employee”

For Federal employment tax purposes, a household worker is an employee who performs services in and around your home. If you hire someone to do household work and you are able to control what work he or she does and how it is done, you have a household employee. This is true even if you give the employee freedom of action. What matters is that you have the right to control the details of how the work is done.

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

One of the first steps to take when hiring a new employee is to establish the employee’s identity and employment eligibility. This can be done by having the employee complete the Employment Eligibility Verification Form, Form I-9, at the time of hire. The employee must present documents from those listed on the form as acceptable to establish identity and employment eligibility. The employer must review these documents and attest that these documents appear to be genuine and relate to the individual being hired. The employer retains the Form I-9 and must present it, if requested, to officers of the U.S. Citizen and Immigration Services (USCIS), the Department of Labor, or the Office of Special Counsel for Immigration-Related Unfair Employment Practices. Form I-9 can be found in the Handbook of Employers (M-274), and is available in limited quantities from the local office of the INS. In addition to containing the Form I-9, the Handbook answers many commonly asked questions regarding the employment verification procedures.

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.

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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.

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Page Last Updated: 4/12/11 3:09 PM