Quick Guide to Hiring Household Staff: Important Things to Know
Hiring household staff is a complex process. You want to hire people who are reliable, trustworthy, and competent. You want to retain employees who prove their value. To maximize your chances of finding and keeping stellar employees, we offer some important considerations and information below.
Whether you need a baby nanny, a private chef, or multiple household staff members for a ranch or large estate, your first decision is whether to use an agency or fill the position on your own.
There are many advantages to using a professional household staffing agency. First and foremost, a reputable agency will have the connections to find qualified, experienced candidates quickly. An agency has an acute understanding of the many steps involved in the hiring process, and they’re familiar with the legal and tax requirements when it comes to hiring household staff. In short, an agency takes much of the burden of hiring employees off you, so you can focus on your family and career.
If you decide to hire someone on your own, we offer some considerations and guidelines below. Note that this information is not comprehensive—you’ll need to do additional research to ensure you comply with state and federal laws.
Make sure you’re ready to start the hiring process.
If this is your first time hiring an employee, you’ll need to register for a federal EIN (Employer Identification Number), a 9-digit number assigned by the IRS. You’ll also need to register as an employer with federal, state, and local agencies.
Understand your liability.
Consider the following questions:
- Will the employee be driving your cars? If so, does he/she have their own insurance? Did you check their driving record to protect yourself from liability against negligent entrustment?
- Do you need an Employment Practices Liability Insurance (EPLI) policy for high net-worth families?
- Do you have an umbrella policy of at least $1 million to cover anything over and above your homeowner’s/vehicle insurance limits?
Unless your homeowner’s insurance covers injuries to an employee and provides enough coverage to pay all damages in the event your employee is injured or has a serious accident, you’ll need workers’ compensation insurance to ensure you’re protected.
Workers’ compensation protects your employee, but, more importantly, it protects you against liability. Many states require you to carry it. It’s generally affordable, costing between $300 and $1,000 per employee per year.
Understand the tax requirements of hiring an employee.
You must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages to employees. You don’t generally have to withhold or pay any taxes on payments to independent contractors. Learn more about how to determine the difference between an employee and an independent contractor. Misclassifying a worker is illegal and can lead to tax evasion charges and steep fines.
Consider using a payroll service like ADP or Paychex. These companies bear most of the burden of figuring out employee taxes, usually for a reasonable fee.
Make sure you’re ready to advertise the position.
There are many things you’ll need to do before advertising for the position, including:
- Making a list of the position’s duties and responsibilities, required experience, skills, and licenses or educational background.
- Deciding which background checks you’ll need to perform, and whether to conduct drug testing, and which activities/results would disqualify a candidate.
- Deciding which services/search engines you plan to use (e.g., Indeed.com, Monster.com, etc.).
- Determining who will conduct interviews.
- Creating a compensation plan that outlines wages and benefits; make sure it spells out anticipated hours per week and overtime pay (in compliance with state and federal laws).
- Creating an employee handbook that includes information about working hours, expectations, compensation, duties, dress code, reporting to work, procedures for calling out sick and requesting vacation, termination/severance procedures.
- Preparing or having your attorney prepare confidentiality and/or arbitration agreements, as needed.
- Learning which questions you cannot ask a candidate, by law (e.g., “How old are you?”, “Do you have kids?”, etc.).
Make sure you have hiring and onboarding plans in place.
You’ll need to have a standard offer letter template in place that outlines the employee’s responsibilities, compensation, benefits, work hours, time off, and “at will” status.
When a candidate accepts your offer, he or she will need to complete certain forms, including a W-4 (tax withholding form) and I-9 (employee eligibility verification form). You’ll need to provide your employee with your handbook and report the employee to your state’s new hire reporting program.
Decide who will train your employee and have a training plan in place. If your employee will be subject to a “probationary” period (e.g., 90 days), it must be clearly stated in the handbook.
To give your employee the best chances of success in the role, do your part. That means clearly explaining the rules of the house and any logistics (parking, security systems, etc.), providing them with instructions, schedules, contacts, and emergency procedures.
Your employee will need to know things like who is allowed to answer the phone and front door, accept packages, and open mail, how family members should be addressed, rules for driving a family vehicle, and when and how they should notify their supervisor of emergencies or problems.
If your employee will live on-site, make sure their accommodations are adequate and welcoming. An employee living in cramped, uncomfortable quarters without sufficient privacy will not likely stay with you long.
Know which records to keep as an employer.
You’ll need to track and record the following each pay period:
- Wages paid (cash and non-cash)
- Federal income tax withheld
- Social Security and Medicare taxes withheld
- State employment taxes withheld
You are required to keep tax records for at least four years after the taxes were reported/paid, along with employment tax forms and supporting documents.
Understand your responsibilities regarding employee termination.
All states in the U.S. are at-will states, which means an employee may have their employment terminated without notice at any moment and for any reason (provided the reason does not violate discrimination or other laws).
However, some states have exceptions due to public policy, implied contracts, or a covenant of good faith. Learn about your state’s laws to avoid problems should you decide to terminate an employee.
A Few Words About Hiring “Under the Table”
While it may once have been viewed as acceptable and even routine to pay household staff under the table—meaning paying someone in cash and not reporting it to the IRS—doing so is illegal and could lead to serious legal consequences.
It can also make it impossible for a worker you terminate to get unemployment benefits, and it could land you in real legal trouble if the person is injured while working for you.
Bottom line: It pays to do things the right way. Whoever you hire will be working in your home, with your family, and may have access to your personal financial information. This is not the place to cut corners.
Doing things by the book and providing full benefits—like health insurance, paid time off, and parental leave—will help you find and retain the best staff.
Get Expert Help Hiring Household Staff
Hiring an employee is an involved, complex process. If you’re feeling overwhelmed about the undertaking, you’re not alone. An expert staffing agency can help; your time and peace of mind are invaluable.
Staffing at Tiffanie’s can help you find the perfect person to fill your position. We’re an established private staffing company that connects clients throughout the country with qualified household staff, from personal assistants to private chefs, to baby nannies, to estate managers.
We use a rigorous screening process to carefully select qualified candidates, and we nurture you through the entire process of screening, interviewing, and hiring your perfect candidate. It’s how we’ve earned a reputation as one of the most trusted names in the household staffing industry.
Learn more about our process, then contact our domestic staffing agency at 866-484-5550 to find your ideal candidate.