Time is
precious for most of us these days, and often, we need help at home so we can
have more time to run our businesses or careers. That may mean hiring help for personal tasks such as care giving for the young, elderly, or special needs family member. When you first hire a household worker,
there’s a whole different set of rules to follow compared to hiring for business.
Underground Payroll
There is a
whole industry of “underground” payments made to domestic workers. Individuals such as housekeepers,
regardless if they live with you full time or work once a month, are wrongly
paid as contractors, and often in cash, most of the time. According to the IRS, in court case
after court case, these workers should be paid as household employees, even if
they are part-time.
Cracking Down
One of the
focus areas for the IRS is this area of household payroll. The current and strong drive to bring
this underground payment system to the light is caused by several new pieces of
legislation. A few states have
recently passed a domestic workers bill of rights. Changes in minimum wage and overtime requirements are going
into effect in 2015. And the
health care act requires workers to document their wages before they can
qualify for a subsidy, so this can bring more workers asking you to get them
fully documented on your books.
Getting It Right
The need
to hire household workers is rising due to the silver tsunami – a term
describing the aging of the populous Baby Boomer generation and their growing
need for health care, which will truly stretch our system based on their
numbers.
Expert Guidance
When your
family makes the decision to hire household workers, seek expert guidance so
that you can get through the maze of compliance in this area. You’ll want to be sure you learn about
the risks and compliance issues in this area so that you can properly protect
your personal wealth as well as your peace of mind. And if we can help, please reach out and let us know.
