You May Be An Employer . . . And Not Know It

Reprinted from an "Around Here" Magazine article, Winter 2007, by Marie Harlow

Have you Hired Help?

If you hired someone to do household work, you probably have a household "employee."

If you can control not only what work is done but how it is done, the worker is your employee. And if the worker is your employee, it does not matter whether the work is full time or part time, or that you hired from a list provided by an agency or association.

Household work is work done in or around your home by the following people: baby-sitters, cleaning people, drivers, housekeepers, nannies, health aides, private nurses, maids, caretakers, yard workers, domestic workers.

Are You Protected?

What happens if the professional you've hired to help with your children or your elderly parents suddenly becomes injured in your home? That "professional" may be like family, but the legal liability is likely to sit with you.

Many homeowners who hire help are not aware of the potential legal hassles that can ensue when an accident occurs on their property. After an accident, you may be financially liable for the worker's injuries and disabilities, and your homeowners' insurance policy may not cover you in the event of a lawsuit. Contact your insurance broker to make sure your policy does cover your employee.

Federal Tax Responsibilities

You must pay Social Security, Medicare and Federal Unemployment Tax for the household employee. The best thing to do is to call your accountant or contact the IRS with your tax questions at 1.800.829-1040.

State Tax Responsibilities

You may have responsibilities to withhold money for State Disability Insurance (SDI). In addition you are responsible for the payment of Unemployment Insurance (UI) and Employment Training Tax (ETT). Again, call your accountant or the California State Franchise Board at 1.888.745-3886 for more information.

Make sure you pay all your taxes. People often get in trouble if an employee leaves or is fired, then files for unemployment of disability. The state then realizes that the person was receiving unreported compensation.

Marie Harlow is the owner of Help At Home, Inc., an established agency that provides evaluation and services for people that require assistance at home. She can be reached at 916.933.9050, 877.622.9020, www.HelpAtHome.us.