Domestic employees have been covered by the Fair Labor Standards Act (FLSA) since 1974.
The FLSA stipulates that domestics (household workers) must be paid at least the Federal minimum wage. The FEDERAL minimum hourly rate is $7.25 per hour effective July 24, 2009. If your state imposes a minimum wage higher than the Federal minimum, the state amount is in effect.
» Minimum Wage by State
Overtime compensation coverage hinges on whether the household worker lives in (on the premise) or lives out (come-and-go). You are required to pay a domestic employee who lives out overtime (for hours above 40 in a week **). Overtime is one and one-half times the normal hourly rate. Live-in employees must be paid for every hour they work but are not automatically entitled to the overtime differential. (There are some exceptions to the live-in exclusion, notably CA, NY, NJ and MD.) If the household employee receives a "salary" that covers a work week of more than 40 hours, your employment agreement must explicitly state the regular and overtime rates of pay. See our exclusive Hourly Rate Calculator for help.
Hours worked include the following:
In general, hours worked includes 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.
There are many states which enforce higher minimum wages. Where Federal and state law have different minimum wage rates, the higher standard applies.
» Minimum Wage by State
These rules are governed by the » Fair Labor Standards Act. Please familiarize yourself with these rules if you are considering a pay rate that does not meet the FLSA standards articulated above.
It is important to note that the FLSA specifically calls out domestic employment (housekeepers, maids, nannies, etc.) in the statue as non-exempt employees, covered by the rules and protections of the FLSA. This is not a grey area, subject to individual interpretation.To quote the » FLSA's Handy Reference Manual, "Domestic service workers such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters are covered if:
(1) their cash wages from one employer in calendar year 2012 are at least $1,800. (Different amounts would be designated in other calendar years, pursuant to an adjustment provision in the Internal Revenue Code); or
(2) they work a total of more than 8 hours a week for one or more employers."
Elder Care Services: Companionship services and personal attendants employed in a private home are covered by slightly different rules relative to overtime calculations. See our discussion Household Employees, Companions, Personal Attendants and the Minimum Wage.
** California household employees who live out and whose duties are not strictly limited to those of a "personal attendant" are entitled to the overtime differential for hours work over 8 in a day. So a schedule of 4 10-hour days is paid as 32 hours at the regular rate, and 8 hours at the overtime rate. In general, California has a number of rules and regulations that impose MORE duties and responsibilities on the household employer than Federal law does. We recommend you read EDD's Household Employer's Tax Guide for California-specific advice.