Legal Services for In-Home
Employees in North Carolina

When hiring domestic or household employees, such as nannies, housekeepers, or gardeners, there are several legal considerations to keep in mind to protect your interests and the employees’ rights.

1. Classification – Employee vs. Independent Contractor
2. Employment Agreements and Job Description
3. Wage and Hour Laws
4. Taxes and Withholdings
5. Benefits and Protections
6. Privacy and Safety with Appropriate Background Checks
7. Termination and Separation
8. Employment Rights and Legal Compliance
9. Record Keeping and Reporting

By addressing these considerations, you can effectively manage the legal aspects of hiring domestic or household employees, ensuring compliance with relevant laws and fostering a fair and respectful working environment.

When hiring domestic employees, it’s crucial to distinguish between employees and independent contractors based on the level of control, independence, and work conditions. Employees typically follow the employer’s direction, use the employer’s tools, and adhere to set schedules, while independent contractors have more freedom in how they work, use their own tools, and set their own hours. The IRS guidelines emphasize behavioral and financial control and the nature of the work relationship to determine proper classification.

Once the worker’s status is determined, employers must comply with federal and state labor laws. This includes adhering to the Fair Labor Standards Act (FLSA) for minimum wage, overtime, and record-keeping requirements, as well as state-specific regulations on wages, hours, and benefits. A clear employment contract should be drafted, detailing job duties, compensation, work hours, and benefits, to clarify the employment relationship and ensure compliance.

Proper tax withholdings and contributions are essential, including payroll taxes, federal and state income taxes, and unemployment taxes. Employers should provide necessary benefits like workers’ compensation insurance and paid leave where applicable. Consulting with legal and tax professionals and maintaining accurate records of employment agreements and wages is vital to ensure compliance with labor laws and avoid disputes.

When employing domestic workers such as nannies, housekeepers, or gardeners, it’s important to understand your responsibilities regarding wages, overtime, and benefits. Domestic employees must be paid at least the federal minimum wage, though many states and localities have higher rates, which must be followed. Pay frequency is dictated by state law, and maintaining accurate records of hours worked and wages paid is essential for compliance and potential audits.

Overtime rules generally require that domestic employees working over 40 hours per week be paid 1.5 times their regular rate. Special rules apply to live-in domestic workers, who are exempt from overtime under the Fair Labor Standards Act (FLSA) but must still receive at least the minimum wage for all hours worked. Benefits such as workers’ compensation insurance may be mandatory depending on state law, and offering health insurance, paid leave, and retirement benefits, though not always required, can enhance the employment relationship.

Compliance with state and local laws is crucial, as these may impose additional requirements for wages, overtime, and benefits. Written employment agreements, while not always legally required, help clarify expectations and protect both parties. Ensuring adherence to anti-discrimination laws and respecting employee privacy are also important aspects of managing domestic employment. Consulting legal counsel and a tax advisor can help ensure that all obligations are met and that you are providing fair and lawful working conditions for your domestic employees.

When hiring domestic employees like nannies, housekeepers, or gardeners, conducting thorough background checks and reference checks is crucial to ensure safety and make informed decisions. Always start by obtaining written consent from the candidate before performing a background check, as required by the Fair Credit Reporting Act (FCRA). Clearly disclose what information will be reviewed and how it will be used, and if you decide not to hire the candidate based on the background check, follow the FCRA procedures, including notifying the candidate and providing a copy of the report.

Different types of background checks can provide valuable insights, including criminal history, sex offender registry status, driving records, employment history, and education verification. If the role involves financial responsibilities, a credit check may also be relevant. Ensure that all background check information is handled confidentially, complies with state laws, and is accessed only by authorized individuals.

In addition to background checks, reference checks are essential. Contact professional and personal references to verify the candidate’s work history, performance, and reliability. Ask key questions about their job titles, employment dates, job performance, and reasons for leaving previous roles. Keep detailed records of these checks, use the information fairly, and apply the same procedures for all candidates to maintain consistency. It’s also important to avoid discrimination and ensure that the checks are relevant to the job. Establishing clear policies, seeking professional advice, and maintaining transparency with candidates will help ensure a thorough and compliant hiring process.