It’s been a busy first half of the year in household employment compliance.
Here’s a look at what’s happened, what’s new, and what’s coming down the road that has been announced so far in 2022. Beyond payroll and tax rules, families with household help also need to follow applicable labor laws to stay in compliance and avoid fines, penalties, and potential legal actions.
Premium Payments for Missed Meal and Rest Breaks in California
Since household workers like nannies and senior caregivers in California likely don’t get required meal and rest periods, these employees must be provided with an additional hour of pay called “premium pay.” A recent California Supreme Court ruling held that these premium payments are deemed wages under the law and must be itemized on a household worker’s pay stub. Also, because these payments are considered wages, they must be paid in full – and in a timely manner – when an employee leaves their job. If not, it can constitute a waiting time penalty for the family.
IRS Increases Mileage Rate
Starting July 1, the standard mileage rate for business travel will be 62.5 cents per mile, an increase of four cents from the rate effective at the start of the year. Household employers can use the optional standard mileage rates to calculate the deductible costs of their employees operating their own automobiles while they are on the job.
DHS Ends COVID-19 Temporary Policy for Expired List B Identity Documents
Household employers are no longer able to accept expired list B documents with their worker's Form I-9. At the onset of the COVID-19 pandemic, DHS adopted the temporary policy in response to the difficulties many individuals experienced with renewing documents, such as driver’s licenses or state identifications, during the health crisis. Now that document-issuing authorities have reopened and/or provided alternatives to in-person renewals, DHS has ended this flexibility.
Household Employees Eligible for Paid Leave Under New Maryland Law
Maryland will establish a Family and Medical Leave Insurance Program that covers just about all employers and full- and part-time workers in the state including household employers and their workers. Benefits will be available beginning January 1, 2025. The law will be funded through a payroll tax that is scheduled to begin on October 1, 2023.
What the Massachusetts Wage Act Ruling Means for Household Employers
The Massachusetts Supreme Judicial Court rules for an employee who was terminated for cause and was seeking treble damages for the untimely payment of her final wages under the state’s wage act. This ruling emphasizes the importance of paying all final earned wages, including vacation and/or PTO, on time. In this case, unused vacation time needed to be paid on the day of termination as required by law.
New York Establishes Sexual Harassment Complaint Hotline
New York State enacted a new law that requires the state’s Division of Human Rights to establish a confidential, toll-free hotline for employees to call with workplace sexual harassment complaints. The new law also provides free legal assistance to individuals who contact the hotline. Once this law goes into effect and the hotline goes live on July 14 employers – including household employers – must notify their workers of the hotline.
Employee Paid Leave Increase in Washington, D.C.
Starting October 1, the District of Columbia will increase the amounts of available leave for employees under the district’s Universal Paid Leave Act. The employer payroll tax that funds the leave decreased on July 1. Initially, the increase in paid leave was also set to begin on July 1 but D.C.’s Fiscal Year 2023 Budget Support Act of 2022 pushed back the start date.
New Tax Reporting Rule for Mobile Payments
Under the American Rescue Plan Act from March 2021, paying for goods and services - like babysitting or childcare - through third-party settlement organizations (live Venmo, PayPal and CashApp) will be reported to the IRS if those transactions total $600 or more in a year. 1099-K forms (Payment Card and Third-Party Network Transactions) for the 2022 tax year will start arriving early next year.
New Protections for Household Employees in New York
Household workers are considered “employees” for all purposes under the New York State Human Rights Law and have the full protection of its employment provisions. Under the New York City Human Rights Law, employment protections now apply to all household employees.
New Chicago Ordinance Requires Written Contracts for Household Employees
Under a new ordinance enacted by the Chicago City Council, all household employers in the city must now provide their workers with a written contract in their preferred language.
GTM can help
Need help with managing household employment compliance? GTM Payroll offers Household HR Services led by a PHR-certified human resources advisor. We can help with employee documents like handbooks, job descriptions, nanny contracts, and confidentiality agreements as well as consult on hiring and termination practices, employee management, labor law compliance, and employee benefits. Household HR Services are in addition to a payroll and tax plan. To learn more o get started, call (800) 929-9213.
Reposted with permission from gtm.com/household