Navigating the complexities of California nanny tax law can be overwhelming for household employers. From verifying work eligibility to managing payroll records, there are numerous responsibilities that must be addressed. To help simplify the process, we have compiled a comprehensive overview of everything you need to know about being a household employer in California.
Beginning of Employment:
Before your employee begins working, it is essential to verify their work eligibility by filling out Form I-9 to confirm they are eligible to work in the U.S. Additionally, you must obtain an Employee Identification Number (EIN) from the IRS and open an account with your state taxing authority. It is also mandatory for household employers in California to carry workers‘ compensation insurance to protect both employees and employers in case of work-related injuries.
During Employment:
Throughout the employment period, household employers must file state employment tax returns, remit taxes, and manage correspondence with tax authorities. It is crucial to adhere to minimum wage rates, which vary depending on the location. Overtime requirements in California differ based on whether the employee is a personal attendant or non-personal attendant, with specific rules for live-in employees as well.
Optional Benefits for Your Employee:
Household employers have the option to provide health insurance benefits to their employees, with different options available depending on the number of employees. Additionally, the state of California offers the CalSavers Retirement Savings Program, allowing employees to save for retirement with employer support.
Ending Employment:
When terminating an employee, household employers must provide a Change in Relationship Notice as required by California law. It is important to manage unused paid time off (PTO) appropriately, with vacation time being paid out to the employee. Lastly, when closing down state employment tax accounts, employers must ensure all necessary filings are completed.
Maintaining Payroll Records:
Household employers are obligated to keep wage records on file for at least three years to comply with state regulations. It is essential to maintain accurate and up-to-date records to avoid any potential issues in the future.
In conclusion, understanding and adhering to California nanny tax laws is crucial for household employers to ensure compliance and avoid any legal repercussions. By following the checklist provided in this overview, employers can navigate the complexities of state regulations and fulfill their responsibilities as household employers in California.
