State regulations for small business owners are complex, and it’s easy to overlook many of the details that vary from state to state. In order to keep your nanny agency in good standing with families and nannies alike, it is important to stay apprised of employment laws and tax requirements, and educate your nanny hires and employer families of those requirements as mandated by state laws.
Some of the different areas of employment law that varies from state to state are:
Domestic Workers’ Bill of Rights
In 2010, New York became the only state with Domestic Workers’ Bill of Rights, which encompasses rights such as overtime, vacation days and protection under New York State Human Rights Law. Effective January 2014, the California Domestic Workers’ Bill of Rights requires that household employees including nannies, elder companions and elder care providers must be paid at an agreed hourly rate, and includes an entitlement to overtime pay. Hawaii is the only other state with a Domestic Workers’ Bill of Rights at this time.
Workers’ Compensation Regulations
Worker’s Compensation Insurance is a protection mandated under state law for a worker and his or her dependents against injury and death occurring in the course of employment. It is not health insurance. State insurance regulations vary from state to state, and the rules for employers to carry worker’s compensation and disability insurance can be vastly different. It is recommended that you discuss local regulations with a licensed insurance broker.
For example, Illinois bases their requirements on hours worked; any worker employed for a total of 40 or more hours per week for a period of 13 or more weeks during a calendar year must be provided workers’ compensation insurance. In Ohio, wages are the determining factor; any household employer who pays their employee $160 or more in cash in any calendar quarter are required to carry it. The United States Department of Labor allows you to view these individual regulations by state.
New Hire Registration
For purposes of tracking individual employment information, the federal government requires each state to implement a New Hire Registration Program. Each state has its own deadlines for reporting- in Pennsylvania, California, New York and Texas employers have 20 days. Other states such as Massachusetts, Rhode Island and West Virginia have a 14 day deadline. There is a helpful resource on the Home Work Solutions website that reviews regulation by state.
In addition to payroll taxes required by the federal government, you will have to pay some state and local taxes. Each state and locality has its own tax laws. For example, California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico require business owners to pay for temporary disability insurance for each of their workers. The United States Small Business Association provides access to key resources that will help you learn about your state tax obligations.