Payroll tax compliance for your new employee does not need to be terrifying, time consuming or expensive!

When you hire through CareLinx to care for your loved ones, you become a household employer. A household employer is someone who hires an individual to perform duties and provide services under their direction in a private home. Generally, these workers are your employee, not independent contractors. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS. 

PAYROLL TAX RESPONSIBILITIES

You are responsible for employment taxes when you pay a household worker who is 18 years or older $2000 or more.

Social Security and Medicare Taxes: The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS. You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself.

Unemployment Taxes: You will make contributions to the IRS and state to fund unemployment and worker re-training programs.

Income taxes: Federal and state income taxes are ultimately the responsibility of the household employee.

Tax Filings: You have both Federal and State tax filing responsibilities. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. Your state will require quarterly unemployment tax filings, reports and remittance. Employee wages are reported to the Social Security Administration. Your employee is due a W-2 form in January.

OTHER LEGAL RESPONSIBILITIES

Verification of Work Eligibility: All U.S. employers are required to verify a candidate's employment eligibility using Form I-9.

Fair Labor Standards Act (FLSA) Compliance: Maintain accurate and contemporaneous records including time tracking, gross pay calculations, and detailed records of all deductions from the employee paycheck. Pay no less than minimum wage on an hourly rate basis

DISTRICT OF COLUMBIA LABOR LAWS

Minimum Wage & Overtime Pay: DC extends FLSA minimum wage standards to all household employees, excluding senior caregivers and companions. Pay may be no less than the greater of the state or federal minimum wage, and all live-out workers receive an overtime differential of 1.5 times the hourly wage for hours over 40 in a workweek.

Payroll Frequency: DC allows you to pay your household worker daily, weekly, bi-weekly or semi-monthly, and does not permit monthly pay cycles. Pay upon separation is due on the next scheduled pay date or within 7 days, whichever is sooner.

Workers' Compensation Insurance: DC requires that all household employers obtain Workers’ Compensation Insurance. 

Paid Time Off: DC domestic workers entitled to overtime payments accrue 1 hour of sick leave for every 87 hours worked, to a maximum of 24 hours/year.

HEALTH INSURANCE

You are not required to provide employee health insurance, however there are financial and retention advantages to contributing some or all of your employee’s health insurance premium. 


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