California’s Minimum Wage
Although the current minimum hourly wage rate for CA is $10, many “Rest of State” workplaces have hourly minimum wage rates higher than that; state law provides that whenever there is a discrepancy of that nature, the higher hourly wage is to be paid.
Over time Pay Rates in California and Texas
Since caregivers are W2 employees, they are eligible for overtime. The exact rules vary by state. To avoid overtime, the client can consider hiring two (or more) caregivers to avoid overtime costs.
California’s live-out personal attendants: Daily overtime is required for live-out personal attendants if the employee works more than 9 hours in a day or 40 hours in a 7-day workweek.
California’s live-in personal attendants: Overtime compensation is required for live-in personal attendants if they work more than 9 hours in a day or 45 hours in a 7-day workweek.
In Texas, there is only weekly overtime, which starts after 40 hours. In addition, employers can deduct up to 8 sleep hours from live-in shifts if the caregiver received at least 5 hours of uninterrupted sleep. Finally, caregivers working live-in shifts of 5 consecutive days or more don’t get any overtime.
Car and Mileage Reimbursement in California
Excluding miles driven to and from the employee’s home, California household employees must be reimbursed by their employers if they use their own cars for work-related chores; this is not considered as a taxable compensation, and neither the employer nor the employee are required to pay taxes on this benefit.
The current Federal mileage reimbursement rate is 53.5 cents per mile; it is intended to cover the cost of gas plus general wear and tear on the car.
Worker’s Compensation in California vs. Texas
Since Kindly Care caregivers are legally considered to be domestic employees , the state of California requires them to have worker’s compensation. Kindly Care has an ethical obligation to make clients aware of this, although the final responsibility rests with our clients.
If the care recipient is the homeowner, worker’s compensation may be included in their homeowner’s insurance policy; if it’s not included, it can easily be added onto their policy (it usually costs between $20-30 per month).
If the care recipient is not a homeowner, worker’s compensation can be obtained through renter’s insurance, although it can be more expensive than going through homeowner’s insurance.
The other option is to go through California State Fund , although that could typically be more expensive than the private market.
Worker’s compensation is not required in Texas.
Paying for My Caregiver for the First Time
Here is the paperwork you’ll need to initiate payments for your new household employee:
– If you don’t already have one, you must obtain a Federal “employer identification number” (EIN) that registers you as the employer (similar to your social security number)
– You must also register in the state of California as a household employer
What Form of Payment Can I Use for My Caregiver?
Check or ACH payments: For the actual weekly, bi-weekly or other regular payments, you can pay by check or follow what many household employers do, which is to set up a bank-to-bank ACH transfer mechanism that pays your employee directly into their bank account.
You must have your new employee fill out a W-4, stating their tax withholding preferences, and an I-9, confirming their eligibility to work in the U.S.
What Are My Caregiver’s Household Employee Rights?
Giving wage notice in writing: California’s Wage Theft Prevention Act requires all household employees be given a notice in writing at the time of hiring, with copies kept in the employer’s as well as the employee’s files, highlighting the following:
• The employer’s name, residential address, and phone number, as well as the same information for their worker’s compensation insurance provider
• A definition of the regular pay day, and their hourly and overtime pay rates
Are Health insurance and other Benefits Required?
Although unemployment, disability, and worker’s comp insurance are mandated by California law, health insurance is optional. There is however a tax incentive to do offer this type of insurance: families with only one household employee can make contributions toward their employee’s health insurance, with the result that neither the employer nor the employee need regard this as compensation and pay taxes on it.
Terminating a Household Employee
Prior or upon terminating your caregiver, you must give her a “change in the employment relationship” form and provide her with relevant information on retirement benefits and disability insurance (or other information on programs that may benefit the employee).
Live-in Caregiver Sleep Hours
Live-in caregivers do not have to be paid for up to 8 hours of sleeping time when they work 24 consecutive hours or more.
California law limits the amount that a household employer can garnish (take) from an employee’s wages for repayment of debts at no more than 25% of their wages after deductions. A court order needs to be secured before you can garnish wages.
Your Caregiver’s Paystubs
California law requires employers to provide a paystub each pay period showing gross and net wages earned by date and divided into regular and overtime wage rates, all deductions, the employer’s name and address, and your Employer Identification Number (EIN).
New Hire Form
You must provide a new household employee with a “new hire form” that lists the specific schedule of hours to be worked each day and each week, together with her pay rate for regular as well as overtime pay. The form also lists your name, street address and telephone number, as well as the same information for your worker’s comp insurance provider.
Why Is My Worker Paid by the Hour and Not a Salary?
California’s nanny tax law requires that all household employees be treated by the hour and paid hourly wages rather than periodic salaries.
Personal Attendant vs. Household Employee Overtime Rules
Personal attendants get overtime pay for daily hours over 9, and for weekly hours over 40. This contrasts with other household employees who get overtime pay for daily hours over 8, and for weekly hours over 40.
Live-in vs. Live-out Personal Attendants
Live-out personal attendants: Daily overtime is required for live-out personal attendants if the employee works more than 9 hours in a day or 40 hours in a 7-day workweek.
Live-in personal attendants: Overtime compensation is required for live-in personal attendants if they work more than 9 hours in a day or 45 hours in a 7-day workweek.
An employer must always pay at least minimum wage to its employees for all hours worked. If the travel occurs within the state of California, then the minimum rate of $10 an hour applies. Otherwise, the Federal rate of $7.25 applies.