October 19, 2006
EMPLOYMENT LAW FOR HOUSEHOLD AND LIVE-IN HELP
By: John Moran, Principal Analyst
You asked whether employment law related to household and live-in employees (1) addresses unemployment insurance and workers' compensation coverage, (2) states who pays for these types of insurance, and (3) is different for those working under 20 hours a week. You also wanted to know if the law contains other provisions for household and live-in employees.
Employers must pay unemployment insurance taxes for all household or live-in employees. Employers must obtain workers compensation insurance for any household or live-in employee who works 26 or more hours a week; they can opt to purchase it for employees working fewer hours a week.
State labor regulations give an employer a small credit toward the live-in employee's salary for providing the employee with meals and lodging: (1) up to $1.80 a day for meals (up to 85 cents for a single meal), and (2) up to $4.00 a week for a private room (up to $3.00 a week for a shared room).
UNEMPLOYMENT INSURANCE COMPENSATION
A household or live-in worker is considered an employee, whether the job is part-time or full-time, and all employers must file an employer status report with the Department of Labor (DOL). Employers of live-in workers become liable for unemployment taxes, as does any employer, when they (1) pay wages of $1,500 or more in any calendar quarter in either the current or preceding year or (2) employ at least one individual for some portion of a day in each of 20 different weeks, not necessarily consecutive, in either the current or preceding calendar year. The liability starts on the first day of the year or the first day of business, whichever is earlier.
Employers pay taxes on the first $15,000 earned by each of their employees; this is known as the taxable wage base. The total taxes depend on the number of employees covered by unemployment and on the employer's history with the unemployment compensation system. An employer with a number of former employees collecting unemployment compensation will have an increased history or “experience rating” and will pay a higher tax. The current unemployment tax rate ranges from 1.1% to 6.0% of the employees' taxable wage base, depending on the employer's experience rating.
An employer that has not been in existence long enough to establish an experience rating is charged with the newly liable employers' rate. In 2006 this is 2.9%.
Employers must obtain workers compensation insurance for any household or live-in employee who works 26 or more hours a week. The workers' compensation act specifically excludes a “person engaged in any type of service in or about a private dwelling provided he is not regularly employed by the owner or occupier over 26 hours per week…” (CGS § 31-275(9)(B)).
This means an employer with a household employee working 20 or fewer hours a week is not required to provide workers' compensation coverage for that employee. An employee working 20 or fewer hours a week in a household who is injured on the job is not eligible for workers' compensation benefits unless the employer voluntarily purchased such insurance for the worker.
MEAL AND LODGING CREDIT
State labor regulations give an employer a credit toward the live-in employee's salary for providing the employee with meals and lodging: (1) up to $1.80 a day for meals (up to 85 cents for one meal), and (2) up to $4.00 a week for a private room (up to $3.00 a week for a shared room). To be legal, these employer credits on the employee's salary must be disclosed to, and accepted by, the employee at the time of hiring.
Other requirements of the lodging credit include:
1. The room must be of reasonable specification regarding size, privacy, sanitation, heat, light, and ventilation.
2. Rooms must be open to DOL inspection.
3. When an employee is given and agrees to more than one room for housing, the labor commissioner will establish a reasonable credit to be applied toward the employee's salary.
4. No allowance or credits toward the employee's wages are permitted when an employee is required to share a bed.