Are Domestic Staff Exempt or Nonexempt Employees?
There can be two types of domestic staff employees you may have seen when looking at job postings for household staffing services—exempt and nonexempt positions. You may be wondering how exempt vs. nonexempt employees are different and which type of domestic service worker position would be better.
What is a domestic service worker?
A domestic service worker is someone who is employed by a private household. Some of the more common domestic service jobs include:
- Private Chefs
- Personal Chefs
- Handymen and Handywomen
- Personal Shoppers
- Family Assistants
- Personal Assistants
All domestic service workers have certain protections under the Fair Labor Standards Act (FLSA), regardless of whether they are exempt or nonexempt employees.
What is an exempt employee?
An exempt employee is one who is paid a minimum salary of at least $684 per week to perform their prescribed job duties. Exempt employees are paid a flat rate salary every pay period, no matter how many hours they work.
Exempt employees typically are not paid overtime wages when they work over 40 hours in a work week. Instead, they are often compensated differently, such as being paid a higher wage with the expectation that sometimes they may be required to work overtime.
Additionally, exempt employees must fall into one of several job categories as follows:
- Computer/Technology-Related Positions
- External Sales Positions
What is a nonexempt employee?
A nonexempt employee is an employee who is paid an hourly wage to perform their job duties. The minimum amount a nonexempt employee must be paid is the current minimum wage rate or your state’s current minimum wage rate, whichever is higher.
In addition, nonexempt employees are entitled to overtime pay when they work more than 40 hours in a given work week at a rate that is one and half times their base hourly wage. Furthermore, nonexempt employees are often entitled to two times their base hourly wage when working holidays.
What type of employee is a domestic worker?
In general, most domestic service workers are considered to be nonexempt employees because they do not fall into one of the exempt job categories. However, if you hire a personal assistant or family assistant, they could fall under the administrative or executive job categories, so they may qualify as an exempt employee.
What are you legally required to provide for your nonexempt domestic employee?
All nonexempt service workers are entitled to an hourly wage. The amount of that hourly wage does vary based on the position and job responsibilities. They are entitled to overtime pay at a rate of one and half times their normal hourly wage when they work more than 40 hours in a given work week.
As their employer, you have the responsibility of tracking their time and attendance for accuracy in their wages. As such, you should have some sort of process in place where your nonexempt domestic staff can clock in and out throughout the day.
Depending on the size of your home and the number of employees, you may want to invest in a software time clock application. For homes with fewer household staff members, requiring employees to clock in and out by hand manually would be appropriate.
In addition, you are responsible for withholding and paying state, federal, social security, and Medicare taxes. This means you may need to hire an accountant or payroll processing service if you do not want the added responsibility of processing payroll for your household staff yourself.
Part of the payroll processing for your domestic service workers also requires you to provide your household staff with a detailed pay stub showing what deductions were taken and their amounts. You must provide a pay stub even if you decide to pay your employees electronically with direct deposit or add money to their pay card.
What are you legally required to provide your exempt domestic employee?
You still have to deduct and pay the various taxes with exempt domestic employees. However, since they are paid a flat salary, you are not required to track their working hours. Yet, many households still track the working house of exempt employees merely to ensure they are working the agreed-upon hours.
You will also need to provide your exempt employees with a pay stub showing what deductions were taken from their salary. While these amounts usually do not change from one pay period to the next, you still must provide a pay stub for each pay period.
How can I tell which ones of my domestic service workers qualify as exempt domestic employees?
The job category alone is insufficient to determine whether a domestic employee qualifies for exemption status. You must review other tests to determine if they meet the criteria. If not, then they must be classified as a nonexempt employee.
Test #1: Salary Level
As we mentioned above, exempt employees must earn at least $684 per week or more.
Test #2: Salary Payments
Salary must be paid at regular intervals that are agreed upon by the employer and employee, such as weekly, bi-weekly, or monthly, and be proportional to the fixed weekly or annual salary.
Test #3: Duties Match Job Category
The assigned job duties must primarily fall within the job category for the exempt position, such as administrative, professional, executive, or technical job duties. Furthermore, the majority of the exempt employee’s job duties must fall within the job category.
Why is it important to classify domestic service workers correctly?
Failure to classify employees correctly could lead to fines and penalties imposed by the Department of Labor (DOL). So, if you have a household employee who only passes one or two of the above tests, you cannot make them exempt. They must pass all three.
It is your responsibility to review the current qualifications for exemption status to ensure any exempt household staff members are classified correctly. If you must reclassify exempt employees, it is highly recommended to sit down and explain why since they may feel like you are demoting them by making them nonexempt.
Do exempt and nonexempt employees have to work 40 hours a week?
Since exempt employees are paid a flat rate to complete specific job duties, it does not matter whether it takes them 30 hours, 40 hours, or 50 hours to complete the tasks. So, if they can get them done in 30 hours, they do not have to work 40 hours a week.
With nonexempt employees, you decide how many hours they will work in a typical work week. For example, you may have domestic staff who work 20 hours a week and other employees who work 35 to 40 hours a week. It really depends on the job duties and your expectations for the position.
Exempt vs. Nonexempt Employees: Which Is Right for You?
In most cases, nonexempt employees will be the standard, while exempt employees the exception. As we mentioned, it is essential to classify employees correctly to avoid getting into trouble with the DOL.
Finding the Perfect Domestic Staff for Your Household
It is easy to find the perfect domestic staff to fulfill your household staffing needs by getting assistance from Staffing at Tiffanie’s. We pride ourselves on placing qualified part-time and full-time housekeepers, maids, butlers, nannies, mannies, personal assistants, family assistants, chefs, chauffeurs, and other domestic service workers in private households.
For further information about our household staffing services and help filling domestic staffing positions for your household, please feel free to contact us at 866-484-5550 today!