Extra Obligations for California Employers
If you are currently employing a foreign domestic worker and sponsoring that worker for Lawful Permanent Resident status (LPR) (green card) you must ensure that you are in compliance with state and federal employment tax laws.
Examples of domestic workers, also referred to as household workers are: baby-sitters/nannies, chauffeurs, cooks, housekeepers, caretakers etc.
If you are a domestic employer in the state of California, state payroll taxes are regulated by the State of California Employment Enforcement Department (EDD). A domestic employer may have to register with EDD and submit Form DE1 HW – Employers of Household Workers Registration and Update Form. To determine whether registration and submission of Form DE1 HW is required, the employer must look to the amount of cash wages paid to domestic worker in a calendar quarter.
Who falls under these requirements?
Employers who pays cash wages of $750.00 or more in a calendar quarter must register with the EDD. The employer must also report domestic worker’s wages and withhold State Disability Insurance (SDI) from the domestic worker’s wages.
Employers who pay $1000.00 or more in a calendar quarter must withhold SDI from a domestic worker’s wages. The employer must also pay Unemployment Insurance (UI) and Employment Training Tax (ETT).
Important tips for employers
You must register with EDD within 15 days after having paid $750.00 in cash wages
You can register with EDD and submit Form DE1 HW online
Once you are registered with the EDD, you will receive a notice to post in your workplace that informs your employees of their rights under the UI and SDI programs
Do not include noncash wages, such as meals and lodging, when calculating whether you have reached $750 in cash wages
Once you meet the $750 in cash wage limit, you must also include all cash and noncash payments as wages
If wages you pay a domestic worker fall below $750 in a quarter, you must continue to withhold SDI for the remainder of the current year and through the following year
If wages you pay a domestic worker fall below $1000 in a quarter, you must continue to withhold SDI and pay UI and ETT for the remainder of the current year and through the following year
The EDD offers no-fee state payroll tax seminars to help employers comply with state payroll tax laws. You can register online at Payroll_Tax_Seminars to find a seminar near you
For more detailed information and resources download the EDD’s “2016 Household Employer's Guide (DE 8829)”
Don’t jeopardize your hard work
Bringing domestic employees, cooks and nannies to the United States can be a complicated process. It’s hard enough navigating the various possibilities and requirements of J-1s, H-2bs, Eb-3, B-1s, PERMS, USCIS and the Department of Labor. When you work with our office, we stay with you for the long-term and help you from the beginning to the end.