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Household Employee Cost Factors

Are you considering hiring a household employee? Maybe your aging parent needs a senior caregiver to help with day-to-day tasks, or you need a nanny-tutor this summer to provide care for your kids. Life is busy and hiring someone to help around the house can be incredibly beneficial. Here are some important factors to keep in mind when it comes to cost and hiring your new domestic employee.

Pay ‘on the books.’

When you hire someone to work in your home, you are a household employer. Don’t be tempted to pay in cash ‘under the table’, as this could have serious repercussions if you were to be found out. The government can impose big fines or fees if they discover you’ve not been paying taxes for your employee. It is best to pay on the books, with all federal and local taxes withheld. Not sure where to start? We can explain the details that are involved. For your added convenience, we partner with companies like HomeWork Solutions that provide payroll and tax preparation services specifically for clients who have household employees.

Don’t avoid overtime.

The Fair Labor Standards Act states that household employees who live out of your home should be paid 1.5 times their hourly wage, if they work over 40 hours per week. If they live in your home, they should be paid overtime at their regularly hourly rate. Paying your employee a lump monthly or weekly salary and avoiding overtime could cause a problem in the event of a labor dispute. Some states have exceptions to this rule, so be sure to do your research.

Think about insurance and benefits.

As a household employer in the United Staes, you are not obligated to provide benefits or insurance to your household employee. But, if you are able to do this, it’s one of the best ways to attract and retain the best employees in the industry. Consider offering some paid time off, in addition to paid holidays through the year. And when it comes to insurance, even paying just half of your employee’s premium or offering to reimburse medical costs could be a huge benefit.

If you are ready to find an experienced household employee to work in your home this year, now is the time to act! Contact us today to learn more about finding the right person to be placed in your home.

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