Employees or Independent Contractors? An Analysis of the Employment Status of Household Workers

TASA ID: 2343

The question of whether a nanny or any other domestic worker is an employee or an independent contractor is one that can sometimes have gray areas. Nannies are probably the most cut-and-dried; in almost all cases under both federal and California law, nannies are employees. For other types of household workers, such as housekeepers, it may be more difficult to say. There are several legal tests used to determine this status:

Economic reality test - Is this the person's only job? Even if it's not, does she rely on this specific job for a considerable amount of her income? Is her financial livelihood entirely or partially dependent on this job? If the answer is yes to any of these questions, then she's very likely an employee. Note, however, that even if a household employee works for multiple individuals, that does not necessarily make her an independent contractor, but simply more likely means that she is an employee of more than one employer.

Amount of control - In the case of a nanny, an employer exerts a significant amount of control over how the nanny does her job. For example, the nanny is usually told how to feed, dress, and bathe the children in her care, as well as which activities are acceptable and which are not. Ideally, the nanny has a detailed job description, but even lacking one, the level of control is usually enough to constitute an employer-employee relationship. This is different from, for example, a housekeeper who comes to your house once a week and is not told how to clean or which specific products to use. In that case, due to both the housekeeper's economic reality (that you are only one of probably 20 to 30 clients and therefore don't make up a large amount of her income) and the level of control you exercise over her work (minimal), she is likely an independent contractor.

Regular and substantial hours - The more regularly a person works for a family, the stronger the case that she is an employee. It is when her hours are minimal and/or fluctuate significantly that she is more likely to be considered an independent contractor.

In the case of nannies, there are limited exceptions to the nanny as employee rule. One is if a family pays an agency directly for the nanny's services, usually the agency, not the family, is the nanny's employer. This is very rare, however, and most agencies specifically disclaim that they are not the nanny's employer. Similarly, if the family brings their child to the nanny's or another person's home, and especially if the child is not the only child being supervised in that home, this tends to indicate that the nanny offers her services to the general public and is more likely an independent contractor.

Certain family members such as a spouse, children under 21 (unless it's their principal occupation) and parents (under certain conditions) also generally do not constitute employees.

How the employee refers to herself, how the family defines her status in an employment contract, or how she is paid (hourly or salaried) do not carry significant weight in determining her employee status - simply because you call her an independent contractor doesn't necessarily make it so!

This article discusses issues of general interest and does not give any specific legal, medical, or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional. 

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