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.
OREGON LABOR LAWS
Minimum Wage & Overtime Pay: Oregon requires that all domestics, excluding companions, be paid at no less than the greater of the state or federal minimum wage, and that all live-out workers be paid an overtime differential of 1.5 times the hourly wage for hours over 40 in a work week. Live-in domestics, again excluding companions, are entitled to overtime for hours over 44 in a work week.
Payroll Frequency: Oregon requires that all household workers be paid daily, weekly, bi-weekly, semi-monthly or monthly. Pay upon involuntary separation is due on the next business day; upon voluntary separation within 5 business days.
Pay Statements: Oregon requires all employers to provide itemized pay stubs foreach wage payment.
Workers' Compensation Insurance: Oregon does not require household employers to obtain Workers’ Compensation Insurance; however; we strongly encourage you to obtain Workers' Compensation Insurance through a licensed broker to ensure should your employee be hurt on the job your interests are protected. Workers' Compensation Insurance is not issued as part of your home owner's insurance and can often be difficult to find. We can help you obtain this insurance through our insurance partner.
Paid Time Off: Oregon’s DWBR mandates after one year of service, a household worker who averages 30 hours per week must receive 3 paid personal leave days.
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.
Questions? Ask us!