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Tax and Legal Issues Household Employers Should Address at the Time of Hire

Published September 2, 2014

By Tom Breedlove, HomePay by Breedlove – Because of the complexities in hiring private duty care, it’s easy for families to misstep if they don’t have adequate help from the start. In fact, many of the more common household employment payroll and tax mistakes can be avoided by addressing a few key items at the time of hire. So if you’re about to hire in-home care, keep these three things in mind as you’re discussing the details of the employment arrangement with your new employee:

1. Go over the New York Wage Notice together. State law requires all employers to provide a Wage Notice to their employee at the time of hire and again by February 1st of each subsequent year of employment. But aside from complying with the law, the Wage Notice requires a myriad of information that will get both of you on the same page right away, including;

  1. Your name, address and phone number
  2. The employee’s hourly and overtime rates of pay
  3. The day of the week the employee will be paid and what they’ll be paid weekly

2. Talk about your time off policy. Similar to the Wage Notice, the state of New York requires employers to give their employee written notice about their policy on sick leave, vacation, personal leave and holidays. After one year of employment, your employee is entitled to at least three paid days off. And if you live in New York City, you’re required to give your employee two days of paid sick time per year as well. These requirements are important to know – not only from a compliance standpoint, but also because many families overlook time off and are unprepared for when their employee asks for a vacation or calls in sick.

3. Purchase workers’ compensation and disability insurance policies. If your employee will work 40 hours or more per week – or is a live-in employee – you must purchase a workers’ compensation and disability insurance policy. These two items are not handled through the tax and payroll process, but are very important because they provide financial assistance to your employee if s/he is unable to work due to injury or illness. Families caught without coverage can be held liable to pay their employee’s medical bills and lost wages and can be subject to large fines from the state. The most convenient solution for obtaining both a workers’ compensation and disability insurance policy is to contact the New York State Workers’ Compensation Board at (877) 632-4996.

By addressing these three topics before your employee starts, you’ll avoid getting off on the wrong foot both with your employment relationship and your payroll and tax situation. Like any new endeavor, mistakes can happen, but if you spend the time to research what your requirements are and come up with a game plan that is easy to execute, household employment doesn’t have to be as complicated as many people make it out to be.

By Tom Breedlove, HomePay by Breedlove

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