If you are thinking about hiring someone to work in your home, it’s important to understand the legalities that surround compensation. Maybe you are looking to hire a nanny to help with the children, an estate manager or chief of staff to oversee all the inner workings of your busy household, or you need a housekeeper.
Hiring staff to work in your home means you become a household employer. Many employers make the mistake of assuming they can pay their new hire as an independent contractor. A household employer is someone who hires individuals to work within their private home, and pays them more than $2,700 in cash wages within a calendar year (2024). Providing fair, on-the-books wages for your household employees is critical.
About Fair and Legal Pay
Domestic employees from across the country have recently started advocating more to demand the same rights that workers in other industries have. Their request: to earn a living wage that includes overtime pay and paid sick leave. Several cities and states have passed bills that protect domestic workers, but there is still a lot of work to be done regarding fair and legal pay.
#FAIRANDLEGAL, a coalition of domestic worker advocates, non-profit organizations, for-profit companies, staffing agencies, and individuals, has united to raise awareness and drive change, ensuring household employees receive the benefits they deserve and are legally entitled to. This coalition emphasizes the need to recognize and treat household employees as professionals for their essential contributions to millions of households nationwide. You can read more about their effort and review participating members on the #FAIRANDLEGAL website.
An organization that has proven integral to the advancement of fair and legal pay for household workers is the National Domestic Workers Alliance. The National Domestic Workers Alliance (NDWA) advocates for the respect, recognition, and labor rights of nearly 2.5 million nannies, housecleaners, and homecare workers who provide essential care for our loved ones and homes. By redefining how care work is perceived, valued, and compensated, NDWA aims to transform these vital roles into dignified jobs that offer economic security and opportunities for advancement.
What is fair and legal pay?
In short, fair and legal pay means domestic employees receive a living wage for all hours worked, including the proper compensation for overtime. It also means that they are not paid under the table. Household employees need to be paid on the books, with proper employment and federal taxes withheld on each paycheck. Legal pay provides the employee with verifiable income that can be used to rent or purchase a home or apartment, buy or lease a vehicle, and more.
Further, legally paid employees have access to government benefits, such as Social Security when they retire, family medical leave, and unemployment benefits or disability benefits. If your employee cannot work or loses their job, utilizing these benefits can help give them and their families a safety net.
It’s important to note that paying on the books is not only the right thing to do, but it’s also the law. If you choose to pay off the record and it’s discovered by the IRS, you could face huge fines, fees, or be forced to pay back taxes.
For Employers
At Household Staffing, we prioritize employers who offer fair pay for the position they are seeking to place, and do not accept any new client application paying below $29 per hour– even for part time positions. In addition, we offer guidance on what a realistic compensation package should include to attract top talent rather than simply suggesting a minimum pay for domestic workers.
Our introduction process includes a short, paid trial period before hire in which the selected candidate works in the employer’s home to ensure the match we’ve created truly results in the perfect, fair, and long-term fit. Should a candidate or client find something during this trial period that doesn’t feel like the right fit, there is no contractual obligation to continue.
For Candidates
For our household employee candidates, we offer guidance on how to create an optimal work agreement to ensure fair pay, while ensuring the expectation of duties is favorable to both parties.
According to a 2023 survey report published by the International Nanny Association, the nanny median hourly rate was $25 in 2022. Newborn care specialists report a median hourly rate of $35. Approximately 72% of nannies are compensated for overtime, 28% receive health insurance, 74% receive an end of the year bonus, and 80% receive paid time off.
In most of the positions we place, our candidates earn 25% higher wages than the industry average.
Where should you begin?
Our team at Household Staffing is dedicated to finding great employees for our clients. At the same time, we work hard to make sure our candidates are placed in roles that are fair and align well with their expertise and passions. We understand how important it is to stay in compliance with all federal, state, and local laws that apply in each state, as well. We work closely with domestic payroll specialists and once you find that perfect candidate, can connect you. This ensures all payroll and tax withholdings are correct from day one.
Contact us today to get started!
