Back in the 1990s, several people lost high-level government jobs and Supreme Court nominations because they employed housekeepers or nannies (“domestic workers”) off the books and did not pay taxes.
While the tax issues involved with employing domestic workers are important, we have recently seen a significant increase in private lawsuits by housekeepers and nannies, as well as government investigations by the New York State Department of Labor, relating to overtime and other wage violations. These lawsuits and government actions can cost families tens of thousands of dollars in settlements and fines.
If you employ a nanny or housekeeper, it is best to be aware of this issue and take protective measures to reduce, and ideally avoid, liability.
New York State has a number of wage and hour laws that specifically relate to domestic workers. These laws are designed to make sure that families are paying domestic workers fairly, and that domestic workers are being paid minimum wage and overtime, where applicable.
Some of you may be thinking “I have nothing to be concerned about, my nanny is not in this country legally, and she is not going to want to call attention to herself by making an overtime claim.” This is simply not true. The wage and hour laws protect all workers regardless of their immigration status and the Department of Labor reassures claimants that they cannot be arrested or deported for asserting their rights to fair wages.
In this article, we will highlight a few of the more significant, but not all, potential areas of liability. We encourage anyone employing a domestic worker to seek legal advice to make sure that you are complying with all applicable laws.
New York’s Wage Theft Prevention Act requires all employers to give employees a notice at the time of hiring and during the first month of each year, containing the following:
The employee’s hourly rate of pay (regular and overtime);
the employee’s regular pay day; and
the employer’s name, address, and contact information
The same information must be given along with each payment of wages, plus the dates of the work covered by that payment of wages; gross wages; deductions (i.e. taxes); and net wage.
New York State law requires that domestic workers be paid overtime at a rate of 1.5 times the worker’s normal hourly wage after 40 hours per week, or after 44 hours per week if your domestic worker resides in your home. There is no minimum salary which exempts domestic help from overtime.
Therefore, even where your domestic worker’s weekly or monthly rate breaks down to a generous hourly rate higher than the minimum hourly wage, without establishing an hourly wage and/or keeping records of your domestic worker’s working hours, you may accidentally fail to pay your domestic worker the correct overtime rate or otherwise violate overtime and recordkeeping laws.
For the sake of simplicity, some families may pay their domestic worker a set weekly or monthly salary rather than establishing an hourly wage. Although this is less complicated than paying your domestic worker an hourly rate and keeping a record of the hours, you are putting yourself at risk of being accused of not paying minimum wage or overtime and not having a defense.
We strongly recommend 1) setting an hourly rate; 2) issuing the Wage Notice above which states that pay rate; and 3) tracking hours on a daily and weekly basis in writing and having your domestic worker initial it.
In certain circumstances, domestic workers must be given meal breaks, but they may be unpaid:
A domestic worker who works a shift more than six hours long that extends over the midday meal period (11:00am to 2:00pm) must be given 30 minutes off within that period for a meal.
A domestic worker employed for a shift starting before 11:00am and continuing later than 7:00pm must be given an additional meal period of at least 20 minutes between 5:00pm and 7:00pm in the evening.
A domestic worker need not be paid for normal sleeping hours even if they are on-call, or for any other time when he or she is free to leave the place of employment.
However, live-in domestic workers should be paid for at least 13 hours per 24-hour shift, provided that they are given three work-free hours for meals, and at least eight hours for sleep (and do actually receive at least 5 hours of uninterrupted sleep).
Time Off and Sick Leave
All domestic workers must be given at least 24 hours’ consecutive rest per week. They may agree to work on this rest day, but they must be paid overtime for it.
If your domestic worker has worked for you for more than a year, he or she is entitled to at least 2 days of paid sick leave and at least 3 paid days off. Unused sick leave carries over to the next year.
To sum up, anyone who employs a domestic worker must comply with state and local laws or face very serious (and expensive) consequences. Among the requirements are: a wage notice, tracking the employee’s time, paying for overtime, providing meal breaks and rest and sick leave.
Chaim B. Book and Brita Zacek are employment attorneys licensed in New York. They practice with the law firm Moskowitz & Book, LLP focusing on all areas of workplace and employment law, including harassment and discrimination, overtime and NYS Labor laws, mediation and arbitration, employment contracts (including clergy contracts) and issues involving non-compete restrictions.