Ask the Lawyer: What do we have to do legally to hire full-time household help?
Q: Mom is not doing well, and we are in the process of interviewing a person to live with her full time. Our due diligence is very good, but legally, what is required to hire full-time household help?
-R.L, Manhattan Beach
A: If you are going to hire someone to work in the household on a regular basis, he or she is required to complete a USCIS Form 1-9 Employment Eligibility Verification. It is not difficult to find the form online. You have the responsibility to make sure the person is either a citizen of the United States, or an alien who can legally work here; then you complete the employer part of the form. It is against the law to knowingly hire (or continue to employ) an individual who cannot legally work here.
Q: Do I have to pay payroll taxes for the weekly house cleaner?
-S.A., San Pedro
A: If you pay the house cleaner directly, and your payments in the calendar year meet the IRS household employment threshold (presently $2,100), he or she must receive a W-2 from you, and you have to pay the payroll taxes. It can be challenging to claim that the household cleaner is an independent contractor who has to pay his or her own taxes, as opposed to your employee for whom you have tax payments to make.
Q: Is it all that complicated to set up a business? There are three of us. We plan to hire five to six employees to start. Guidance would be appreciated.
-G.N., Lomita
A: There are five basic items that come to mind: (a) What structure best suits your anticipated organization? A corporation? Limited liability company? Partnership? This requires an evaluation of how each of you may protect yourselves personally, who will run the show, what division of proceeds will be agreed upon, and tax implications; (b) Since you plan to hire people, you need an employer identification number, which you can obtain online from the IRS web site; (c) Once you have the EIN, there are forms to establish an account with California for payroll withholding, unemployment insurance registration and sales tax collection (assuming the latter is applicable); (d) Payroll reporting and record-keeping should be set up; and (e) you may have certain healthcare requirements to meet. All of which leads to this: It is prudent to consult qualified counsel, and possibly an accountant as well.
Ron Sokol is a Manhattan Beach attorney with more than 35 years of experience. His column, which appears on Wednesdays, presents a summary of the law and should not be construed as legal advice. Email questions and comments to him at RonSEsq@aol.com or write to him at Ask the Lawyer, Daily Breeze, 21250 Hawthorne Blvd., Suite 170, Torrance, CA 90503.