THE COMPLETE GUIDE TO HOUSEHOLD EMPLOYMENT - Redlig - Tax… · 2017-07-31 · THE COMPLETE GUIDE TO HOUSEHOLD EMPLOYMENT IN NEW YORK STATE EVAN GILDER REDLIG FINANCIAL SERVICES REASSURANCE

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An Educational Publication of Redlig Financial Services Inc.

THE COMPLETE GUIDE TO

HOUSEHOLDEMPLOYMENTIN NEW YORK STATE

EVAN GILDER

SECOND EDITION

THE COMPLETE GUIDE TO

HOUSEHOLDEMPLOYMENTIN NEW YORK STATE

EVAN GILDER

REDLIGFINANCIAL SERVICES

REASSURANCE THROUGH LIFE´S JOURNEY



SECOND EDITION

TABLE OF CONTENTS

Preface .................................................................................... 6

About the Author ................................................................... 8

Introduction ........................................................................... 10

Demographics ............................................................................11

The Decision to Employ Privately ........................................ 14

Federal Labor Law Definitions ............................................. 16

Fair Labor Standards Act (FLSA) ...............................................16

Independent Contractor vs. Employee ...................................20

Employment Eligibility ...............................................................22

Federal Tax Requirements and Obligations ....................... 23

Social Security and Medicare ...................................................25

FUTA Tax .....................................................................................26

Federal and State Income Taxes ..............................................26

End of Year Filing Requirements .............................................28

New York State Tax and Employment Obligations ............ 30

Domestic Worker Bill of Rights ................................................31

Wage Theft Prevention Act .......................................................34

Notice of Acknowledgement of Pay Rate and Payday ..........35

New York State Wage Statement Requirements ...................38

Employer Registration in New York State ...............................40

New Hire Reporting ...................................................................41

Unemployment Insurance ........................................................42

Withholding Tax Remittance Requirements...........................44

Metropolitan Commuter Transportation Mobility Tax (MCTMT) ................................................................45

Workers Compensation and Disability Benefits Insurance .....................................................................46

Penalties for Non-compliance ..................................................47

Frequently Asked Questions (FAQ) ...................................... 51

Questions on Federal Labor and Employment Laws ............51

Questions on New York State Employment and Labor Laws .................................................................................57

Resources ................................................................................ 61

Federal Forms and Publications ..............................................61

Federal Phone Numbers ...........................................................61

New York State Forms and Publications .................................62

New York State Phone Numbers .............................................63

Disclaimer ...................................................................................64

Questions ...................................................................................64

Online Tools and Resources .....................................................64

About Redlig Financial Services Inc. .................................... 65

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Call 646-827-3600 For a Free Consultation An Educational Publication of Redlig Financial Services Inc.

Law attorneys and families will find this booklet helpful in guiding their families and clients.

The guidance contained herein is not legal or tax ad-vice and is intended to help families address the most common questions that arise once a family decides to hire someone. It is meant to provide clear, concise infor-mation that will allow an employer to understand, and remain compliant with, the employment laws.

This guide is separated into two sections: The Feder-al regulations, which can be thought of as foundation building blocks, and then State and Local regulations, which revise and modify the Federal laws by providing additional protections to domestic employees.

Please note that this guide will not go into any detail on the role of third party employers, such as home care or companion agencies or the differences in legal inter-pretations that exist between them.

PREFACE

The purpose of this guide is to provide educa-tion, knowledge, guidance and information on the complex laws that families must comply with

when employing someone in their household. Many people are unaware that when they hire domestic workers, they become employers, subjecting them to complex rules and regulations to which they must ad-here. The goal of this booklet is to share my knowledge, gained from years of experience specializing in house-hold employment issues, and address the concerns brought to us, by present and past clients, through years of calls and discussions.

This guide is geared towards families employing nan-nies, companion-caregivers to the elderly, and other types of home based workers. It should be noted that the term domestic employer/employee is a legal definition and household employer/employee is a common term. For purposes of this guide, these two terms are used in-terchangeably, unless specifically stated otherwise.

It is with this purpose, that we, as an accounting firm, have chosen to assist our clients in managing the totali-ty of this process on their behalf, and shield them from the risks described herein. It is our hope that other professionals, such as Social Workers, Care Managers, Elder

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This fundamental flaw exposes families to unnecessary and unanticipated risks.

It is not uncommon to receive calls from people seek-ing guidance after receiving stiff penalty notices over vi-olations of rules they either did not know existed or had thought were previously addressed. Others are given poor guidance and advice from professionals who are not familiar with the rules, which results in additional compliance issues that cost lots of time and money to resolve.

Recognizing these gaps, Evan has built a successful practice encompassing employment tax, labor, compli-ance education and advisory. This practice includes as-pects of reporting, and offers easy integration with ev-identiary requirements for Long Term Care insurance policy claims and fiduciary accountings. It encompasses workers’ compensation and disability insurance report-ing and is fully tax and fiduciary compliant, eliminating the potential for out of compliance penalties while mini-mizing risks and costs for families.

As a principal at Redlig Financial Services Inc., a New York based accounting and tax advisory firm in New York, Evan runs the Family Financial Office Practice, which en-compasses Employment (Payroll, Unemployment and Workers Compensation), Bill Paying, and Family financial office management.

ABOUT THE AUTHOR

Evan Gilder has devoted his ca-reer to helping families and professionals navigate the

complex array of labor and tax laws that families are required to abide by. His clients have relied on his ability to educate and simplify the complicated path of employment and manage all aspects of these moving parts on their behalf.

As an advocate for fairness and transparency in the do-mestic employer-employee relationship, Evan remains at the forefront of changes in domestic employment laws, and continually provides a professional education series called “It’s More Than Just Payroll” to accountants, attor-neys and social workers on a regular basis.

Household employers are under the assumption, be-lief and expectation that payroll service providers pro-vide guidance and advice on domestic labor laws. Shock-ingly, almost all payroll service providers are not capable of providing this type of support because household em-ployers represent such a small segment of the overall employment market and the rules covering businesses are dramatically different from those from households.

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thoroughly interview and perform background checks on all candidates. They are quite helpful in finding the right person for the right job. Registries do not act as em-ployers when the proper candidate has been identified.

Protecting the needs of an individual, especially some-one with a mental and/or physical incapacity, often in-volves invoking and utilizing a Power of Attorney. A Power of Attorney, often called a POA, comes in many different formats, with limited and durable powers of attorney being the most popular. In addition, there are other types of fiduciaries, such as Trustees and Guard-ians, who are legally tasked with protecting the needs of individuals and their assets, based upon specific and court mandated instructions. Careful guidance and advi-sory services are crucial to understanding the fiduciary obligations that come with the appointed role.

DEMOGRAPHICS

People who work in households represent a growing segment of the employment market. This is most com-monly associated with maids, nannies, private nurses, caretakers and home health aides. The latter is a di-rect result of demographics and the aging of the “Baby Boomer” generation combined with their increased life expectancy. According to the US Department of Health

INTRODUCTION

The decision to employ someone is often long, drawn out and complicated, filled with many questions that families often struggle to address

correctly. It often includes a delicate balance between need and cost, with complicated factors such as:

» the balance between dependence and independence;

» the balance and flexibility with household needs, such as cleaning, meal preparation and companionship;

» changing needs associated with progression of mental and/or physical incapacity;

» cultural and gender preferences and biases;

» attending social activities and events, including doc-tors’ appointments; and

» medically complex needs and requirements, just to name a few.

Private placement registries can be very helpful to fam-ilies in facilitating staffing needs and requirements. They have well qualified candidates to choose from and they

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to burgeon as the “baby boom” generation begins to reach age 65.

The population age 65 and over has increased from 35.9 million in 2003 to 44.7 million in 2013 (a 24.7% in-crease) and is projected to more than double to 98 mil-lion in 2060. By 2040, there will be about 82.3 million old-er persons, over twice the number of 2000. People 65+ represented 14.1% of the population in the year 2013 and are expected to grow to be 21.7% of the population by 2040. The 85+ population is projected to triple from 6 million in 2013 to 14.6 million in 2040.

and Human Services, the older population, defined as a person 65 and older, numbered 44.7 million people in 2013. This represents 14.1% of the United States popula-tion, about one in every seven Americans.

The older population will continue to grow significant-ly well in the future (see Figure 1). This growth slowed somewhat during the 1990’s because of the relatively small number of babies born during the Great Depres-sion of the 1930’s. But the older population is beginning

3.1 4.99.0

16.6

25.5

35.0

44.7

56.4

82.3

98.2Figure 1

Number of Persons 65+1900 to 2060 (numbers in millions)

1900 1920 1940 1960 1980 2000 2013 2020 2040 2060

Source: U.S. Census Bureau, Population Estimates and Projections

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and associated benefits, thereby eliminating any poten-tial miscommunication.

It should be noted that in August 2015, the United States Court of Appeals overturned a lower court rul-ing on proposed changes to the Federal minimum wage and overtime laws specifically impacting third party em-ployers, such as home care agencies. The change to the “Companionship exemption” rules had a profound effect on the household employment market nationwide by re-stricting how the exemption can be used.

THE DECISION TO EMPLOY PRIVATELY

The main reason why someone decides to hire privately can be summed up in two words: “Control” and “Cost”. Families want to maintain

control over the job requirements and responsibilities regarding care, and want the final say on job functions. In addition, employing someone privately can result in savings of at least 25% (and often more) when com-pared with the cost of using a third party employer, such as a homecare of companion agency. Families also have different strategies available to them when paying for live-in and sleep-in care.

This means that a well thought out strategy is imper-ative to making the process easy and manageable. For instance, not only is it important to understand the laws around employment, but it is equally important to have employment contracts in place, stating clear and concise terms of employment, work hours and schedule, payday

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though domestic workers were previously excluded entirely from the law, FLSA was amended to include them in 1974). However, domestic workers who reside in an employer’s home are not covered by overtime law, though they are still covered by the federal minimum wage law. 29 U.S.C. § 213(b)(21). Additionally, domestic workers are not covered by minimum wage or overtime law if employed on a “casual basis” to provide “babysit-ting services.” 29 U.S.C. §213(a)(15). However, babysit-ting is not deemed to be on a “casual basis” if the work-er is employed by an employer or agency other than the family or household using their services, 29 C.F.R. 552.109(b).

Similarly, domestic work-ers are exempt from min-imum wage and overtime if employed to provide “companionship services for individuals who (because of age or infirmity) are unable to care for themselves.” 29 U.S.C. §213(a)(15). Like the babysitting exemption, the companionship exemption dates back to the 1974 FLSA amendment, when it was originally intended as a narrow carve-out to the law’s coverage. Because of the broad interpretation of this exemption, the U.S.

FEDERAL LABOR LAW DEFINITIONS

A Domestic (or Household) Employer is defined as someone who pays a worker to perform duties in or around their home(s). The worker

is your employee when you can control not only what work is done, but how it is done.

FAIR LABOR STANDARDS ACT (FLSA)

The Fair Labor Standards Act (FLSA) protects workers by providing wage and hour standards that employers must follow, such as paying the federal minimum hour-ly wage and overtime. With some significant exceptions, most of these protections apply to domestic workers, which is the legal term for household employees. (Al-

FEDERAL MINIMUM WAGE

The federal minimum wage is $7.25 per hour. The rate has

remained unchanged since July 25, 2009.

EXEMPTION OVERRIDDEN

The companionship service exemption

from minimum wage regulations has been eliminated in many states such as New

York, California, Illinois, and Colorado,

just to name a few.

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services and specifically exclude many other types of work performed in a household setting. It should be noted that the Companionship Exemption may only be used by a household employer. It specifically excludes use by third party employers such as home care agen-cies.

The DOL further states that “the term “companion-ship services” does not include services performed by trained personnel such as registered or practical nurs-es. Registered nurses are exempt from the FLSA’s wage requirements where their time is spent in the perfor-mance of the duties of a nurse and are paid on a salary or a “fee basis” as defined by Regulations, 29 CFR Part 541.”

Translation: Individuals who are trained personnel

with licensing such as RNs or LPNs are ‘exempt’ from

the FLSA and are not considered ‘domestic employees’

at all. They are free to negotiate a wage that is paid on

a fee basis, salary, or hourly at their discretion. Depend-

ing on circumstances, they may still be considered your

employee, simply not under the classification of ‘do-

mestic employment’ as discussed in the FLSA.

Under the definitions set in the FLSA, domestic em-ployees are also classified as non-exempt employees. As such, the pay frequency of a household worker (the maximum interval between wage payments to the worker) is governed by individual state law.

Department of Labor has amended, effective January 1, 2015, the definition of how the companionship ex-emption may be used. Under the revised definitions, the term companionship services mean the provision of “Fellowship and Protection” for an elderly person or a person with an illness, injury or disability, who requires assistance for caring for himself or herself.

The provision of “Fellowship” means to engage the person in social, physical or mental activities, such as conversation, reading, games, crafts, accompanying the person on walks, errands and appointments.

The provision of “Protection” means to be present with the person in their home, or to accompany the person when outside of the home and to monitor the person’s safety and well-being. This must be the pri-mary role for the worker if the employer is able to use this provision.

In addition, while other services may be performed in the home, such as cooking, cleaning, washing of clothes and meal preparation, or other similar services, it must not exceed 20 percent of the total hours worked per work week or it will invalidate the use of this exemption for that week. It therefore becomes very important to be able to track the length of time for specific services being performed to determine adherence to the rules on a weekly basis.

The goal of the redefined exemption was to limit its use to workers who chiefly provide true companionship

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available and marketed to the market and the mech-anism of payment.

Since no economic ben-efits are associated with household employment, this aspect of the laws are not relevant.

The type of relationship refers to the facts that show how the worker and business interact in their relationship with each other. In addition, a contract, regardless of what it states, does not by its nature determine the worker’s status. Therefore, someone contractually stating their designa-tion as independent contractor is not necessarily inter-preted as such by the IRS. If there are any benefits pro-vided, such as insurance, paid vacation or sick time, they will likely not be considered an independent contractor, as these are generally considered employee benefits.

It is also important to understand that even if some-one does not work for an extensive number of hours, it does not change whether or not they are considered an employee or not. This is especially relevant as it relates to State Labor Laws, which generally cast a wide net in classifying workers as employees.

INDEPENDENT CONTRACTOR VS. EMPLOYEE

For many years, it was quite common, although com-pletely incorrect, to misclassify domestic workers as Independent Contractors. The Internal Revenue Service and the United States Department of Labor have both repeatedly documented the illegality of this arrange-ment. There are also major enforcement initiatives un-der way at both the Federal and State level to address this issue.

The IRS has published and provides multiple docu-ments and online tools to properly determine employ-ment classification and eligibility. At the core of the rules are evidence of the degree of control and independence over the specific employment arrangements as follows:

1. Behavioral Control

2. Financial Control

3. Type of Relationship

Behavioral control refers to the right to direct and con-trol how a worker does the work. A worker is an employ-ee when the employer has the right to direct and control the worker.

Financial control refers to facts that determine wheth-er the business has the right to control economic aspects of the employee’s job. The financial control factors fall into categories such as significant investment, unreim-bursed expenses, opportunity for profit or loss, services

IRS DOCUMENTATION

The IRS has assembled detailed documentation on this topic. It can be found at: http://www.

irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-

Contractor-Self-Employed-or-Employee

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FEDERAL TAX REQUIREMENTS AND

OBLIGATIONS

Once you decide to become a household em-

ployer, you must obtain a Federal Employer Iden-tification Number (EIN). An EIN acts as a masking mechanism to hide the employer’s social securi-ty number on all tax doc-uments. Additionally, it adds an additional layer of security when it comes to identity theft.

The IRS will only provide an individual with one EIN in their lifetime. If you have ever obtained an EIN previous-ly, for yourself, even for a sole proprietorship (business),

EMPLOYMENT ELIGIBILITY

The Immigration Reform and Control Act of 1986 re-quires all employers to verify that new employees are el-igible to work in the United States. Accordingly, employ-ers are required to maintain records showing that their employees are eligible to work. In particular, all employ-ees must complete United States Citizenship and Immi-gration Services (USCIS) Form I-9, Employment Eligibility Verification, no later than the first day of work.

Employers must retain an employee’s completed I-9 for as long as the individual is employed. If an individ-ual’s employment is terminated, their form must be re-tained for three years after the date of hire, or one year after the date their employment was terminated, which-ever is later. The I-9 can be retained in either paper or electronic format.

Please note that Form I-9 does not need to be complet-ed for a person providing domestic services in a private household that are sporadic, irregular, or intermittent.

CURRENT TAX THRESHOLDS

The minimum reporting requirements for

withholding of Social Security and Medicare tax is $2,000 in annual

compensation. The social security maximum base

limit for 2017 is $127,200.

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SOCIAL SECURITY AND MEDICARE

Household employers, just like regular employers, are legally required to withhold Social Security and Medicare tax from each of their household employees who are over the age of 18 and earns $2,000 or more of income in a calendar year. The Social Security withholding tax rate is presently 6.2% and the Medicare withholding tax rate is presently 1.45%.

In addition, employers are also required to match the employee’s share of taxes for Social Security (6.2%) and Medicare (1.45%) for all employees. The Social Security tax has a maximum taxable amount within its calculation that changes every year. For 2017, the applicable taxable maximum amount is $127,200 of annual income. Medi-care, on the other hand, has no maximum limit within its calculation. Therefore, an employer’s overall tax liability is 12.4% for Social Security and 2.9% for Medicare taxes.

I am often asked, by the employer, about the inten-tion of paying the employee’s share of Social Security and Medicare tax directly. Since the employee is legally obligated to remit the tax payments to the taxing author-ities, it is not a problem to do so, with one caveat. The IRS considers this arrangement to be an employee benefit. As such, it is a taxable benefit and must be grossed up in the employees pay.

you will need to reuse (and if necessary, reactivate) the EIN if you begin employing someone.

If you apply for an EIN on-line via the IRS website, it is possible the IRS may deny the request. If that happens, you will receive an error code, known as a reference num-ber. Please make a note of it as you will need to refer to it when you call to follow up on the error. The two most com-mon causes for the denial of an EIN number are: 1) the incorrect taxpayer informa-tion furnished on the appli-cation request, and 2) the IRS has previously issued an EIN to the taxpayer. When you call up the IRS to resolve the issue, you will need to provide them with the sys-tem generated reference number. Be aware that when interacting with the IRS, expect a long wait time on the phone before you speak with an individual agent. In addition, the IRS will only deal with the taxpayer direct-ly, unless there is an IRS Power of Attorney on file (Form 2848), which is different from a legal limited or durable power of attorney that you may already have.

IRS EIN ASSISTANT

To request an EIN from the IRS, go to:

https://sa.www4.irs.gov/modiein/

individual/index.jsp

The IRS Business and EIN assignment

phone number is (800) 829-4933.

https://sa.www4.irs.gov/modiein/individual/index.jsp



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1. Domestic employees are often not able to proper-ly budget their tax liabilities, often creating end of year complexities with large tax liabilities as a re-sult of inadequate tax planning.

2. Logistically, it is no more complicated to withhold these taxes since it does not require any additional tax filings.

3. Psychology is a very important factor in retaining good workers and employers often work hard to ensure the workers remain happy. Providing this option is often a necessity, even if not legally man-dated.

The calculation of withholding taxes is determined by tax tables that are published every year by the Internal Revenue Service and State Taxing authorities (where applicable). It is directly tied to the withholding tax elec-tions that an employee specifies when they complete a W-4 form for their employer.

Therefore, as a best practice, it is beneficial to with-hold income taxes from an employee’s paycheck, which works to everyone’s benefit.

Please be aware that many states also have their own respective withholding tax forms, similar to the W-4 form, which allow an employee to specify their respec-tive state withholdings. These forms are only required to be completed when an employee elects to withhold a different level of withholdings from the federal withhold-ing election.

FUTA TAX

The Federal Unem-ployment Tax Act (FUTA) is a tax paid directly by the employer. House-hold employers are subject to FUTA tax if they paid total cash wages of $1,000 or more to household employees in any cal-endar quarter for any non-family employee.

Employers generally receive a 5.4% credit for state un-employment taxes when they file their tax form, which results in a 0.6% net FUTA tax rate, or $42.00 per em-ployee. However, certain states, considered Credit Re-duction States (CRS), have a reduced credit of 1.2%, re-ducing their FUTA Credit to 4.2% Benefit Cost Rate (BCR).

FEDERAL AND STATE INCOME TAXES

By law, employers are not required to withhold Feder-al or State (and city/local) income taxes, where applica-ble, from the paycheck of domestic employees, unless specifically requested. This poses problems and as a practical course of action, it is encouraged for employers to withhold income taxes as a standard practice for the following reasons:

CURRENT FUTA TAX CALCULATION

(APPLIES TO FIRST $7,000 OF EMPLOYEE EARNINGS)

Effective tax rate of 0.6% translating into a per employee cost of $42.

For CRS states, effective tax rate is 1.2% translating into

a per employee cost of $126.

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END OF YEAR FILING REQUIREMENTS

At the end of the fiscal year, employers are required to provide to all employees completed W-2 forms by January 31 of the following year. There are four differ-ent parts of a W-2:

1. Copies B&C are to be provided to the employee. Copy B contains tax filing instructions for the em-ployee and Copy C contains three copies of the form provided.

2. Copy A is to be filed with the Social Security Admin-istration with the W-3 filing.

3. Copy D is the Employer’s copy.

It should be noted that while it is still technically possi-ble to file paper based W-2 and W-3 forms, it is anticipat-ed that support for paper filings will likely be eliminated in the near future.

Form Schedule H must be completed and used on the employer’s 1040 income tax return. While there is no technical deadline for the completion of this form, it must be made available for the completion of the em-ployer’s income tax filing, due by April 15.

END OF YEAR TAX FILINGS

• W-2’s due to employees by January 31

• W-2 and W-3 filings e-filing due to Social Security by January 31

• Schedule H must be completed by January 31, unless it is a stand-alone filing

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» Bill Title: An act to amend the labor law, in relation to establishing the Wage Theft Prevention Act

» Purpose or General Idea of Bill: The Wage Theft Pre-vention Act (WTPA) seeks to expand the rights of em-ployees to seek civil and criminal avenues of remedy for their employers failing to follow labor law appro-priately and the specifications therein.

DOMESTIC WORKER BILL OF RIGHTS

Here is a summary of the Domestic Worker Bill of Rights provisions, which took effect on November 29, 2010:

The most important part of this legislation is that New York State has redefined the term domestic worker, from the federal definition. Under this law, a “domestic worker” is defined as a person employed in a home or residence for the purpose of:

a. caring for a child;

b. serving as a companion to a sick, convalescing, or elderly person;

c. housekeeping; or

d. for any other domestic service purpose.

Furthermore, the modification of the term “Domestic Worker” excludes someone who:

a. works on a “casual basis” (which term is not defined in the statute);

NEW YORK STATE TAX AND EMPLOYMENT

OBLIGATIONS

If you hire household help, your responsibilities as employer include reporting and filing requirements mandated by law. These will be discussed further

down in this section.

Before going into the details associated with state tax and labor compliance, it is important to know that there are two pieces of legislation in New York State that gov-ern employment in the household. They are:

Domestic Worker Bill of Rights – Bill Number S2311E

» Bill Title: An act to amend the labor law, the executive law and the workers’ compensation law, in relation to establishing regulations regarding employment of do-mestic workers including hours of labor, wages and employment contracts.

Wage Theft Prevention Act – Bill Number S8380-2009

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(nanny, housekeeper, home health aide) works 40 or more hours on an average week.

4. The domestic worker must have one 24-hour peri-od per week off from work, but may agree to work that 7th day. In this case the 7th day work must be compensated at the overtime rate (apparently no matter the total hours worked in the 7-day week).

5. After one year of service, a domestic employee is entitled to 3 paid days of leave (sick, vacation, per-sonal, etc.) at the regular rate of compensation.

6. Anti-discrimination provisions are included to pro-tect the domestic employee from sexual or verbal harassment and abuse.

A simple question will inevitably come up: Do I need to pay my home health aide or housekeeper minimum wage and overtime pay?

In New York State, the simple answer is YES. New York State has overridden the Federal exemptions, effectively mandating that domestic employees must be paid minimum wage for the first 40 hours of work (or 44 hours in certain cir-cumstances), and then overtime, defined as one and a half times the base rate of pay, for any hours worked thereafter.

b. is a relative through blood, marriage, or adoption of the employer or of the person for whom the worker is delivering services under a program funded or ad-ministered by federal, state, or local government; or

c. provides “companionship services,” as that term is defined in the federal Fair Labor Standards Act (FLSA), and who is employed by any entity other than the family or household (e.g., a third-party employer or agency).

FLSA regulations define “companionship services” as “those services which provide fellowship, care, and pro-tection for a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs. Such services may include household work related to the care of the aged or infirm person such as meal preparation, bed making, washing of clothes, and other similar services [and] may also include the perfor-mance of general household work provided, however, that such work is incidental, and does not exceed 20 per-cent of the total weekly hours worked.”

1. Overtime: The bill provides overtime for hours worked over 40 in a week by a live out (come and go) domestic, and overtime over 44 for live in domestics.

2. The companionship exemption provided in the FLSA is retained in the NYS legislation (See addi-tional comments below on this).

3. Worker’s Compensation Insurance is required for household employment when the domestic worker

NYS MINIMUM WAGE

The minimum wage in New York State differs by county and is increasing

every year until the mandated rate of $15.00

is achieved.

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» Allowances (including tip, meal, or lodging allowances), if any, claimed as part of the minimum wage;

» The regular pay day designated by the employer;

» The name of the employer, and any “doing business as” names used by the employer;

» The physical address of the employer’s main office or principal place of business and the mailing address, if different; and

» The telephone number of the employer; and

» Such other information as the NYDOL deems material and necessary.

NOTICE OF ACKNOWLEDGEMENT OF PAY RATE AND PAYDAY

Whenever such notice is provided to an employee, the employer must obtain from the employee a signed and dated written acknowledgment of receipt of the notice, which acknowledgment must also include an affirmation by the employee that he or she identified his or her pri-mary language to the employer and that he or she re-ceived a copy of the notice in such language. Each such notice and acknowledgment must be retained by the employer for at least six years or three years after em-ployment has been terminated.

The Act requires the NYDOL to prepare dual language templates that comply with the above requirements. As of the writing of this publication, the DOL template is

Working hours are defined as all hours on duty, includ-ing meal time and sleep time if the employee is required to remain at the premises. In general, hours worked in-cludes all time that the employee is required to be at the employer’s home and all time that the employee is required to be ‘on call’ in the course of his/her duties.

WAGE THEFT PREVENTION ACT

The New York Wage Theft Prevention Act (the “Act”) be-came effective on April 9, 2011. The legislation deals pri-marily with an employer’s obligation to give employees notice of their pay rate and payday, wage statements, and retention of payroll records, and sets forth penalties for non-compliance. The following is a summary of the changes made to the Labor Law by the Act.

Notice of Pay Rate and Payday: Employers must pro-vide each employee with a written notice (in English and in the language identified by the employee as his or her primary language at the time of hiring) pertaining to pay rates and paydays at the time of hiring. The notice, the form of which will be prepared by the New York State Department of Labor (NYDOL) and posted on the NY-DOL’s website, must include the following:

» The rate or rates of pay and the basis of the rate (in-cluding overtime rates if the employee is not exempt from overtime compensation), whether paid by the hour, shift, day, week, salary, piece, commission, or by another method;

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ee in writing of any change to the information described in the bulleted items above at least seven calendar days prior to the time of such change, unless the change is reflected on the wage statement described below.

Posting Requirements: The Act gives the Commission-er of Labor the power to require employers found to have violated the wage payment laws to post a notice of the vio-lation for a period not to exceed one year in an area visible to employees, summarizing the violations found and other information deemed pertinent by the Commissioner. If the violation was willful, the Commissioner can require the em-ployer to post such a notice in an area visible to the general public for a period not to exceed 90 days.

Retention of Payroll Records: Employers must estab-lish, maintain and preserve for not less than six years contemporaneous, true, and accurate payroll records showing for each week worked the hours worked as well as the other information required to be included in each employee’s wage statement, as described above.

Wage Statements: With every payment of wages, em-ployers must provide each employee a statement that includes, at a minimum, the following information:

» The dates of work covered by the wage payment;

» The name of the employee;

» The name, address and phone number of the employer;

» Gross wages;

» Deductions;

available in six languages (English, Spanish, Chinese, Hai-tian Creole, Polish and Korean). If the employee identifies a language for which a template is not available from the NYDOL, the employer is only required to provide an Eng-lish language notice or acknowledgment. Employers are not subject to penalty for any errors or omissions in the non-English portion of any notice provided by the NYDOL.

The notice required under the Act replaces and expands the October 2009 legislation that required only written no-tice of pay rates and pay days at the time of hire.

Notice of Important Changes: In addition to the no-tice, employers are also required to notify each employ-

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A statement must be given with each payment of wag-es. The wage statement may be provided electronical-ly, but workers must be able to access their statements on a computer provided by the employer and be able to print a copy for their records.

Retaliation: The Act amends the provisions of the La-bor Law prohibiting retaliation against an employee for action taken, or believed by the employer to have been taken, by such employee with regard to Labor Law vio-lations. In addition to the existing right to impose a civ-il penalty against the employer of between $1,000 and $10,000, such civil penalty may be imposed against the person who retaliated, and the Commissioner may now also order injunctive relief, liquidated damages against the employer or such person of up to $10,000, rehiring or reinstatement to a former or equivalent position and an award of lost compensation or an award of front pay in lieu of reinstatement and an award of lost compensa-tion. Any employer or his or her agent, or the officer or agent of any corporation, partnership, or Limited Liabil-ity Company (LLC), or any other person who is convict-ed of violating the anti-retaliation provisions of the Law shall be guilty of a class B misdemeanor.

Penalties for Noncompliance: Not surprisingly, pen-alties for violation of the Labor Law have been increased significantly by the Act, as follows:

» An employee who is not provided the notice of pay rate and payday described above within 10 business days

» The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, com-mission, or by another method;

» Allowances, if any, claimed as part of the minimum wage; and

» Net wages.

NEW YORK STATE WAGE STATEMENT REQUIREMENTS

Domestic employees, considered from a legal classifi-cation as non-exempt employees, must have the follow-ing included on their pay statement: the regular hourly rate or rates of pay; the overtime rate or rates of pay; the number of regular hours worked; and the number of overtime hours worked.

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month following a calendar quarter. If that due date falls on a Saturday or Sunday, the form is due on next busi-ness day. If the form is not filed by the expected date, it will automatically trigger a “Failure to File” notice from New York State, to which you will have to provide a writ-ten response.

NEW HIRE REPORTING

All employers must report to the New York State De-partment of Taxation and Finance information about newly hired or rehired employees within 20 days of the hiring date. The required information on each employee includes:

» Employee Name (First, Middle Initial, Last)

» Employee Address (Street, City, State, Zip Code)

» Employee Social Security Number

» Employee Hire Date

» Employer Name

» Employer Address (Street, City, State, Zip Code)

» Your Employer Identification Number (EIN assigned by IRS)

» Indicate if dependent health insurance benefits are available, and if so, the date the employee qualifies for these benefits

of his or her hire date may recover damages of $50 per work week with a maximum amount of $2,500.

» An employee who is not provided the wage statement described above may recover damages of $100 per work week with a maximum amount of $2,500.

EMPLOYER REGISTRATION IN NEW YORK STATE

You must register as an employer in New York State if:

1. You pay cash wages totaling $500 or more in a cal-endar quarter, or

2. You pay less than $500 cash wages in a calendar quarter and you choose to cover your employee(s) for unemployment insurance, or

3. You and your employee(s) agree to withhold New York State income tax from your employee’s wages.

The form used to register as a New York State employ-er is the NYS-100, which is available in either paper for-mat or electronically, via the NYS Department of Labor website. The form will also generate an Unemployment Insurance identification number, since you will be re-quired to pay unemployment insurance.

When you register as an employer, you are required to indicate the quarter you expect to begin employment. The date specified on the form is when New York State will expect you to file an NYS-45 Quarterly Combined Withholding, Wage Reporting, and Unemployment In-surance Return. This form is due on the last day of the

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» Timeliness of your quarterly tax reports,

» The prompt payment of your taxes, and

» The balance in the State Insurance Trust Fund (an in-solvent Trust Fund may negatively affect your tax rate).

New York State sends you a notice annually, of your UI contribution rate, re-gardless of whether your rate changes or not. This annual notification occurs in advance of the first quarter filing of your quarterly reports. In addition, Unemploy-ment Insurance law forbids you to de-duct any part of your unemployment in-surance contribution from an employee’s pay. This is an em-ployer cost.

Please note that NYS-45 Quarterly Combined With-holding, Wage Reporting and Unemployment Insurance forms due on or after April 30, 2015 must be electroni-cally filed.

You can provide new hire information online (https://www.nynewhire.com/index.jsp) or by submitting a copy of the employee’s federal Form W-4 to:

New York State Department of Taxation and Finance

New Hire Notification

PO Box 15119

Albany, NY 12212-5119

Fax: (518) 320-1080

If the W-4 is submitted as the evidentiary document, you will also be required to submit additional informa-tion to show the availability of dependent health insur-ance information (and eligibility) to your employee.

UNEMPLOYMENT INSURANCE

As part of registering as a new employer in New York State, you are assigned an Unemployment Insurance (UI) contribution tax rate of 3.925% (for 2017) and a re-employment service find rate of .075%, for a com-bined unemployment insurance contribution rate of 4.0%. You pay unemployment insurance contributions up to the unemployment wage limit of each employee’s earnings during each calendar year.

The UI contribution rate is amended every year, in March, based upon the following factors:

» Amount of time you have been subject to unemploy-ment insurance law,

ANNUAL UNEMPLOYMENT INSURANCE WAGE LIMIT /PER EMPLOYEE COST

(ASSUMES COMBINED RATE OF 4.0%)

Year Wage Limit Per Employee Cost

2017 $10,900 $436.00

2018 $11,100 $444.00

2019 $11,400 $456.00

2020 $11,600 $464.00

2021 $11,800 $472.00

2022 $12,000 $480.00

2023 $12,300 $492.00

2024 $12,500 $500.00

2025 $12,800 $512.00

2026 $13,000 $520.00

PLEASE NOTE THAT THESE RATES AND CALCULATIONS ARE SUBJECT

TO CHANGE BY THE NEW YORK STATE DEPARTMENT OF LABOR

https://www.nynewhire.com/index.jsp

https://www.nynewhire.com/index.jsp

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ple reason that New York State does not want you hold-ing their money. This remittance is processed with an NYS-1 filing. If the annual withholding tax total exceeds $15,000 in a calendar year, New York State will notify you that the remittance requirement window will be reduced from five business days to three business days.

Please note that New York State has mandated that the remittance of all NYS employment taxes (Form NYS-1) after April 30, 2015 must be electronically filed.

METROPOLITAN COMMUTER TRANSPORTATION MOBILITY TAX (MCTMT)

Here’s a quick note on the MCTMT. The MCTMT tax is imposed on certain employers and self-employed in-dividuals engaging in business within the metropolitan commuter transportation district. It includes 13 counties within downstate New York including Manhattan (New York), Bronx, Kings (Brooklyn), Queens, Richmond, Rock-land, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester counties.

Since the withholding of state income taxes is volun-tary on the part of household employees, the New York State tax department has determined that household employers are not subject to this tax.

WITHHOLDING TAX REMITTANCE REQUIREMENTS

As discussed earlier, employers are not legally re-quired to withhold taxes from household employees’ paychecks, but we highly advise it. It will mitigate the end of year sting that will arise for the employee when it comes time for their tax return to be prepared. Accord-ingly, there are three types of withholding taxes within New York State. They are as follows:

1. New York State withholding tax

2. New York City withholding tax

3. City of Yonkers withholding tax

The determination of what withholding taxes are ap-plicable for an employee are based upon where the em-ployee resides. The calculation of State and local income taxes is determined by tax tables that are published every year. The amount of taxes withheld is determined by the elections specified on the employee’s completed W-4 form filing. In the event that an employee wants to elect a different withholding criteria from the federal tax withholdings, the employee will need to complete and IT-2014 New York State withholding tax form. Otherwise, the completion of this form is not required.

Withholding taxes must be monitored with each pay-roll. Once the cumulative state withholding taxes (New York State, New York City and City of Yonkers tax) exceed $700 within a calendar quarter, you have five business days to remit the money to New York State, for the sim-

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The estimated cost of a disability insurance policy is $60 per year (for up to two employees).

An often misunderstood issue is the interaction of cov-erage for employees on a homeowner’s insurance policy. A workers’ compensation insurance rider on a homeown-er’s insurance policy within the State of New York does not cover domestic employees for workers’ compensa-tion benefits. Furthermore, if a homeowner (employer) wishes to voluntarily cover domestic employees working less than 40 hours a week, the homeowner (employer) must purchase a separate, standard workers’ compen-sation insurance policy to cover those employees (Sec-tion 3420(j) of the New York State Insurance Law).

PENALTIES FOR NON-COMPLIANCE

The following is a list of penalties that can be imposed as a result of non-compliance with state laws:

1. Failure to Report Newly Hired or Rehired Employ-ees and/or Failure to Provide Required Information

2. Failure to Report State Income and Unemployment Taxes

» Failing to file a quarterly Form NYS-45 could re-sult in a penalty of $1,000. The Department of Taxation will send you a notice of your failure to file and give you 30 days to submit Form NYS-45 to avoid paying a penalty. If the filing is late, you

WORKERS COMPENSATION AND DISABILITY BENEFITS INSURANCE

If you employ a household employee who works 40 or more hours per week, you are required to have a Work-ers Compensation insurance policy. The purpose of this policy is to allow an employee to receive assistance while they are unable to work due to an on the job injury.

There is an exclusion written into NYS Workers’ Com-pensation law for any household employee who does not work 40 hours per week, but even though not legally required, it is still advisable to have this policy in place.

Under disability benefits law, a live-in domestic worker means that the worker lives and sleeps in the employer’s premises. Live in domestics are considered to be work-ing while they are at the work location, even if they are not being paid for all their time. For example, if you hire a domestic employee to be in your home from 6:00pm Friday – 6:00pm Sunday, this would be classified as 48 hours of work under the disability insurance policy since they are on the premises for this time, regardless of the number of hours they are paid while on the premises.

While it is possible to purchase both workers’ compen-sation and disability insurance policies via a private in-surance company, it is far more cost advantageous to obtain this policy through the New York State Insurance Fund. The estimated cost of a workers’ compensation policy is approximately $750 per year, per employee.

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Appeal Board

PO Box 15126

Albany, NY 12212-5126

3. Failure to obtain Workers’ Compensation and Dis-ability Insurance can carry significant fines. The Workers’ Compensation Board (WCB) has a specific procedure for dealing with employers without cov-erage, and it is important to fully understand this process in order to avoid cumbersome fines.

» To ensure that all employers are covering their employees, the WCB gathers information from various agencies to establish a database of all businesses in New York, including individuals who employ domestic workers.

» Once the database is established, it is updated by workers’ compensation coverage information sent to the WCB by insurance carriers.

» The WCB is notified whenever an insurance pol-icy is written, modified, or canceled by an insur-ance carrier.

» If the WCB notices that an employer does not have coverage for a period of time, it will send out a written notice to the employer requiring information on how the employer is complying with the mandatory coverage provision of the

will receive a late payment penalty of $50 plus in-terest.

» Under certain circumstances, it may be possible to avoid paying a penalty due to pending legal proceedings. One such example is when the em-ployer dies, and the letters testamentary are not yet approved by the court.

» Any person who fails to file, with the intention of avoiding payment, is guilty of a misdemeanor and subject to a fine of up to $10,000.

» The penalty, under section 581.2(b) of the Unem-ployment Insurance Law, for failure to file a re-turn is 5% of the unemployment insurance con-tribution due for each month the return is late, up to 25%. The penalty may be no less than $100.

» If you contest a penalty assessed against you or you disagree with your unemployment insurance tax rate or claim judgment, you may formally re-quest a hearing within 30 days of receiving noti-fication with an administrative law judge. Send a written letter to the office that issued the deter-mination.

If you are dissatisfied with the judge’s ruling at the hearing, you then have 20 days to appeal to the Un-employment Insurance Appeal Board provided you ap-peared or were represented at the hearing. Appeals may be sent to:

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FREQUENTLY ASKED QUESTIONS (FAQ)

QUESTIONS ON FEDERAL LABOR AND EMPLOYMENT LAWS

How much extra does it cost to employ someone legally?

The following table is meant to provide a true estimate of the cost of employment. The figures include both federal and New York State costs, inclusive of workers’ compensa-tion and disability insurance policy costs.

Number of Employees - * Annualized Employment Cost - *

Annual Gross Salary 1 2 3 1 2 3

$35,000 11.51% 15.20% 18.94% $39,030 $40,322 $41,629

$45,000 10.65% 13.53% 16.43% $49,795 $51,087 $52,394

$60,000 9.90% 12.06% 14.24% $65,942 $67,234 $68,541

$90,000 9.15% 10.59% 12.04% $98,237 $99,529 $100,836

$120,000 8.78% 9.85% 10.94% $130,532 $131,824 $133,131

$150,000 8.55% 9.41% 10.28% $160,240 $163,905 $165,102

*- Please note that these figures assume minimum worker turnover, limiting contribu-tions into the state unemployment insurance fund. In addition, the cost of payroll adminis-tration services is not factored into these calculations.

law—if the employer has secured coverage or is exempt from the law.

» If no response is received, the employer will be levied a $2,000 fine for every 10-day period of non-coverage, up to $72,000 for the year.

» Once the WCB levies penalties, the employer has 30 days from the date of the initial penalty to ap-peal the decision. Information on how to appeal can be found on the back of the penalty notice.

» If the employer has still not paid or responded to the penalty notice after roughly three months, it then goes to a collection agency.

» If the collection agency is unsuccessful in collect-ing the penalty, the WCB will issue a judgment against the employer.

4. Failure to File Quarterly NYS-45

» $50 penalty for late payments made after the due date

» Interest assessed on late payment of the with-holding taxes due

» Interest assessed on late payment of the unem-ployment insurance tax due

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5. How is the scheduling determined?

The goal is to determine how much control the worker has in performing her tasks and the amount of time she spends at your residence. The greater the control and the amount of time on site, the more likely she can be considered an employee. These concepts are tightly cor-related together.

How do I calculate Social Security and Medicare taxes?

If you pay cash wages of $2,000 or more (this threshold can change from year to year) to any one household em-ployee, you generally must withhold 6.2% for Social Se-curity and 1.45% for Medicare taxes (for a total of 7.65%) from all cash wages you pay to that employee. Social Se-curity and Medicare taxes must also be matched by the employer, so you must also contribute your share of So-cial Security and Medicare taxes, which is another 7.65% of cash wages. Unless you prefer to pay your employee’s share of Social Security and Medicare taxes from your own funds, you should withhold 7.65% from each pay-ment of cash wages made.

Is there a minimum reporting threshold for issuing a W-2 to an employee?

There is no minimum reporting threshold for the issu-ance of a W-2. All employees must receive a W-2 regard-less of the amount of income they earn.

How do I determine if a worker is legally permitted to work in the United States?

The only way to validate employment eligibility is for the employee to complete Form I-9, Employment Eligi-bility Verification (https://www.uscis.gov/system/files_force/files/form/i-9-paper-version.pdf?download=1) with the required evidentiary documentation.

Am I required to withhold Social Security and Medicare tax from household employees?

Social Security and Medicare taxes are a required with-holding taxes and must be withheld from all employees after the year to date gross pay within a calendar year exceed $2,000.

Do I have to put my cleaning lady on the payroll?

In order to get to the right answer, there are a num-ber of additional questions that must be asked to better understand the work arrangement. As the questions get answered, the path becomes clearer. The questions are as follows:

1. How many days a week is the cleaning lady coming to your home?

2. Is someone home providing her with clear instruc-tions as to what cleaning tasks to perform?

3. Does she have other people that she works for?

4. Does she bring her own cleaning supplies and equipment (such as vacuum cleaner)?

https://www.uscis.gov/system/files_force/files/form/i-9-paper-version.pdf?download=1


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It is very important to understand that a worker who comes in and takes work instruction in the household does not meet the criteria as independent and does not qualify as an independent worker. They are considered employees, regardless of the duration of employment even if it’s only for a few days.

What are the reporting requirements for issuing a Form 1099-MISC?

All payments over $600 must be reported on Form 1099-MISC.

What is the penalty for filing Form 1099 late?

Form 1099-MISC must be provided to the recipient by the first business day of February after the calendar year. The 1099-MISC must be mailed to the Internal Rev-enue Service by the first business day of February after the calendar year. If the form is filed electronically, the deadline is extended until February 28.

A request can be made for a 30-day extension in filing 1099’s by completing IRS Form 8809, but that extension is only for filing the 1099 with the IRS. It does not provide additional time to provide the 1099 to the recipient.

The following penalties are in effect for late filings of Form 1099-MISC:

» $30 penalty for filing a 1099 not more than 30 days late;

Can the employer pay the employee’s share of Social Security and Medicare tax?

If you prefer to pay your employee’s Social Security and Medicare taxes from your own funds, do not with-hold them from your employee’s wages. However, they must be included in the employee’s wages for income tax purposes.

Can I employ someone using the Companionship Exemption Rules?

The companionship exemption allows an employer in certain circumstances to bypass the requirements to pay an hourly rate of pay for household employees. This ex-emption is written into the Fair Labor Standards Act and was the basis for the industry to use a daily rate of pay.

Recent legislation has restricted the type of work that qualifies under the exemption.

When is it appropriate to pay someone using a Form 1099-MISC?

The requirement to issue a Form 1099-MISC applies to income earned by individuals who are self-employed or to small businesses. Some examples of independent workers who provide services in the household include geriatric care managers, nurses, attorneys and account-ants. Under these circumstances, their income is consid-ered Nonemployee compensation and reported on Box 7 of Form 1099-MISC.

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QUESTIONS ON NEW YORK STATE EMPLOYMENT AND LABOR LAWS

Can I pay my employee a daily rate of pay?

Household employees are classified as non-exempt employees. As such, they must be paid an hourly rate of pay. While it may be possible to discuss daily rates of pay as part of an employment discussion, it cannot be pre-sented or structured this way on their weekly wage state-ment. Likewise, if an employee’s work schedule changes from week to week, it is not permissible to continuously change the hourly rate of pay to adhere to a daytimes daily rate calculations.

What is the definition of a live-in employee and what special rules exist for them?

A live-in employee is defined as someone who resides in the house where he or she works. Families mistakenly believe that someone that lives in the house 3, 4, or 5 days are legally defined as live-in employees. This is ac-tually not the case. The definition of a live-in employee is someone whose legal residence is the same as the resi-dence of the employer.

When an employee meets the legal definition of a live-in, there is a rule that applies to them as to when over-time begins.

» $60 penalty for filing a 1099 more than 30 days late and before August 1;

» $100 penalty for filing a 1099 on or after August 1;

» $250 penalty for intentional failure to file.

Are there any tax benefits I can take advantage of?

Certain household employment situations may be deemed medically necessary, such as caring for an aged, infirm or incapacitated person. As such, the total cost of payroll and associated compliance requirements includ-ing workers’ compensation, disability, and payroll costs may be permissible as a medical expense. Please consult with your tax advisor for more details and eligibility re-quirements.

What is the legal definition of a live-in employee?

The legal definition of a live-in employee is an employ-ee whose legal domicile (address) is that of the employer. This means the employee has no separate independent residence from the employer, an important distinction when it comes to overtime.

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Are there any benefits that I must pay?

Benefits can be broken down into different compo-nents: Vacation Pay; Sick Pay; Holiday Pay; and Medical Insurance. New York State law requires that employees must receive three paid days’ pay after completing their first full year of employment. The law does not distin-guish between whether the three days of pay be vaca-tion or sick/personal days. However, employers of New York City are required to provide two paid sick days after completion of 120 days of regular employment, for a to-tal benefit of five paid days of pay.

Holiday pay is not legally required but often necessary to remain economically competitive in the workplace. It is common for household employees to receive holiday pay for New Year’s Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and Christmas Day. Holiday pay is defined as paying an employee for time and a half of their regular base rate of pay.

Household employers are not required to provide medical insurance to their employees.

Can I pay someone a daily rate (instead of an hourly rate of pay)?

The Domestic Worker Bill of Rights mandates that all household employees must be paid an hourly rate of pay and overtime after 40 hours (or 44 hours under cer-tain circumstances) of work in a seven-day work week.

What are the rules regarding Overtime?

Overtime is defined as time and a half the employees base rate of pay and must be paid after 40 hours (or 44 hours under certain circumstances) of work within a giv-en work week. There are no exceptions to this rule.

How many hours a day do I have to pay for a live-in employee? Do I have to pay for sleep time?

The simple answer to this question is that an employ-ee is entitled to receive pay for all the hours worked. There are a number of variables that contribute to the answer, such as how much uninterrupted sleep time an employee receives and whether the employee resides in a separate private room in the residence of the employ-er. Another important consideration is how many times an employee is expected to awake in the night for the employer vs. interrupted sleep time. The legal minimum daily amount an employee can receive is 13 hours of pay per day, and of course the maximum is 24 hours. The true answer must be determined on a case by case basis.

How often must I pay an employee?

New York State law mandates that all household em-ployees must be paid on a weekly basis and must also receive a wage statement (paystub) showing all deduc-tions and withholdings as part of their weekly pay.

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RESOURCES

FEDERAL FORMS AND PUBLICATIONSIRS Publication 926: Household Employer’s Tax Guide

http://www.irs.gov/pub/irs-pdf/p926.pdf

Form SS-4: Application for Employer Identification Number

http://www.irs.gov/pub/irs-pdf/fss4.pdf

Form I-9: Employment Eligibility Verification


Form W-2: Wage and Tax State http://www.irs.gov/pub/irs-pdf/fw2.pdf

Form W-4: Employee’s Withholding Allowance Certificate

http://www.irs.gov/pub/irs-pdf/fw4.pdf

Form W-3: Transmittal of Wage and Tax Statements


Form Schedule H: Household Employment Taxes

http://www.irs.gov/pub/irs-pdf/f1040sh.pdf

FEDERAL PHONE NUMBERSInternal Revenue Service (IRS): Business & Specialty Tax Line

(800) 829-4933

US Department of Labor: http://www.dol.gov/whd/homecare/

(866) 487-2365

What is the minimum wage in New York State?

In April 2016, New York State has adopted a statewide $15 minimum wage plan as part of the 2016-2017 state budget. The implementation of this is determined on a county by county basis, with New York City being the first to reach $15 on 12/31/2018. Other counties have a more graduated increase and implementation of mini-mum wage. The details on this can be found at the New York State Department of Labor website at: https://la-bor.ny.gov/workerprotection/laborstandards/workprot/minwage.shtm. In addition, the New York State Depart-ment of Labor also provides a minimum wage lookup tool to better assist you with this.













http://www.dol.gov/whd/homecare/

http://www.dol.gov/whd/homecare/

https://labor.ny.gov/workerprotection/laborstandards/workprot/minwage.shtm



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NEW YORK STATE PHONE NUMBERSNew York State Department of Taxa-tion and Finance: Withholding Tax Information Center

www.tax.ny.gov (518) 485-6654

Department of Labor: General Inquiries: Individual Unemployment Insurance Claim Assistance

www.labor.ny.gov (Within NY) (Outside NY)

(888) 469-7365 (888) 209-8124 (877) 358-5306

New York State Insurance Fund: Disability Benefits Insurance Workers Compensation

www.nysif.com(866) 697-4332 (888) 875-5790

Workers Compensation Board: Bureau of Compliance

www.wcb.ny.gov(877) 632-4996 (866) 298-7830

NEW YORK STATE FORMS AND PUBLICATIONSForm NYS-45: Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return

http://www.tax.ny.gov/pdf/current_forms/wt/nys45_fill_in.pdf

Form NYS-100: NYS Employer Registration for Unemployment Insurance, Withholding, and Wage Reporting

https://www.labor.ny.gov/formsdocs/ui/nys100.pdf

Form IT-2104: Employee’s Withholding Allowance Certificate (NYS)

http://www.tax.ny.gov/pdf/current_forms/it/it2104_fill_in.pdf

NYS-1: Return of Taxhttp://www.tax.ny.gov/pdf/current_forms/wt/nys1_fill_in.pdf

Form IA 98: Notice of Unemployment Insurance Tax Rates

https://labor.ny.gov/formsdocs/ui/IA98.pdf

NYS Tax Bulletin MU-350: Hiring Household Help

http://www.tax.ny.gov/pdf/tg_bulletins/mu/b15_350mu.pdf

Publication NYS-50: Employer’s Guide to Unemployment Insurance, Wage Reporting, and Withholding

http://www.tax.ny.gov/pdf/publications/withholding/nys50.pdf

Wage Theft Prevention Acthttps://labor.ny.gov/formsdocs/wp/P715.pdf

Domestic Workers’ Bill of Rightshttps://labor.ny.gov/legal/domestic-workers-bill-of-rights.shtm

Labor Rights and Protections for Domestic Workers

https://labor.ny.gov/formsdocs/factsheets/pdfs/P712.pdf

NYS Department of Labor Notice of Pay Rate

https://www.labor.ny.gov/workerprotection/laborstandards/employer/wage-theft-prevention-act.shtm

http://www.tax.ny.gov

http://www.labor.ny.gov

http://www.nysif.com

http://www.wcb.ny.gov















https://labor.ny.gov/formsdocs/wp/P715.pdf

https://labor.ny.gov/formsdocs/wp/P715.pdf

https://labor.ny.gov/legal/domestic-workers-bill-of-rights.shtm

https://labor.ny.gov/legal/domestic-workers-bill-of-rights.shtm







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ABOUT REDLIG FINANCIAL SERVICES INC.

As an accounting and financial services firm, Redlig Financial Services Inc. has automated the household employment process, which this

book describes in detail. We offer a complete and high-ly personalized family oriented employment and com-pliance solution.

Our clients rely on our team to provide an integrated approach to employment, tax planning and tax prepa-ration with guidance and advisory services layered throughout the process.

While tax returns are a necessity, we pride ourselves on the personal relationships we foster with each one of our clients, which allows us to be more aware of each cli-ent’s unique tax situation. Each client works with an own-er of the firm (or more than one owner depending on the circumstances).

DISCLAIMER

Nothing contained in this guide constitutes tax advice, and any discussion of tax matters is not intended to be used, and cannot be used, to avoid tax penalties and may not be used in the promotion, marketing or recommen-dation of any entity, investment plan or arrangement.

QUESTIONS

If you still have questions, please call for a compli-mentary phone conversation with any of our household employment experts. I’m sure you will feel it is time well spent.

ONLINE TOOLS AND RESOURCES

Please visit www.myfamilypayroll.com for additional online tolls, such as payroll calculators, whitepapers and other helpful information.

http://www.myfamilypayroll.com

The Offices of

Redlig Financial Services Inc.

New York City: (646) 827-3600

White Plains: (914) 946-7725

Long Island: (516) 935-3950

www.redlig.com

www.myfamilypayroll.com





MYFAMILYPAYROLL


Reproduction or reuse of this document without permission is strictly prohibited.

http://www.redlig.com

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THE COMPLETE GUIDE TO HOUSEHOLD EMPLOYMENT - Redlig - Tax… · 2017-07-31 · THE COMPLETE GUIDE TO HOUSEHOLD EMPLOYMENT IN NEW YORK STATE EVAN GILDER REDLIG FINANCIAL SERVICES REASSURANCE