Healthcare Benefits for House Cleaning Employees
Table of Contents
- Healthcare benefits for house cleaning employees.
- That's a multifaceted question about the healthcare benefits for full-time employees and about...
- Okay, so the first one, if you have employees ... This does not include independent contractors.
- Taxes if, for example, you let somebody go and they file for unemployment.
- In the morning, you have clean bathrooms and you have a coffee bar.
- All right, one last thing.
00:07
Healthcare benefits for house cleaning employees.
Are you, as an employer, required to pay?
Great question and we're going to talk about
that today.
Hi there.
I'm Angela Brown and this is Ask a House Cleaner.
This is a show where you get to ask a house
cleaning question
and I get to help you find an answer.
Now, today's show is brought to us by Savvy
Cleaner Training, which is training for house
cleaners and maid service providers.
There's a two-hour masterclass that we teach
on this very topic.
I'm not going to give you the two hours today.
I'm just going to give you the very brief
basics that you need to know, and then I would
encourage you to go over to Savvy Cleaner
Training and get a little bit more education.
All right, so onto today's session, which
is from a house cleaner who has this question.
Speaker 2: Hi, Angela.
For our full-time employees, do we have to
give them healthcare?
If so, how much usually does healthcare cost
for a smaller company
to give healthcare to their employees?
Also, are we supposed to hire our employees
as W-2 workers or are we just supposed to
pay them kind of out of our pocket?
Thank you.
Angela Brown: All right.
01:08
That's a multifaceted question about the healthcare
benefits for full-time employees and about
how we pay our full-time employees.
All right.
The keyword that you used was employee, not
independent contractor.
As an employee, yes, you are required by law
to use a W-2 and to pay above the line, which
is to take out the FICA, and pay for the Medicaid,
and the social security, and all of the things
that are required by law if you live in the
United States for your full-time employees.
Now, the rules are a little bit different
based on where you live across the world.
My recommendation would be to check with your
state and local governments to make sure that
you are in compliance with all of the payments
that are required for salaries for full-time employees.
All right, now over to the healthcare benefits,
which is going to vary and it's not easy.
I need to preface this by saying that you
need to check with someone
who has information on this.
This is not information for a small business
owner that is wearing multiple hats.
There are lots of mistakes that are made by
small business owners when it comes to providing
02:11
a benefits package for their employees.
The mistakes come in the forms of costly tax
fees and fines, and also state employee taxes
and fines, and then also in making errors
in buying the wrong or paying too much for
some kind of a package that you buy for your employees.
All right, so in January 1st of 2015, according
to the Affordable Care Act, which is also
known as the Obamacare, if you had over 50
full-time employees, you were required by
law to provide them a health benefits package.
If you had under 50 employees, you were not
required by law.
Okay, so with that requirement comes a specific
set of things.
We're going to go over a couple of basics
and then, like I said, I'm going to transfer
you to either an insurance underwriter that
can help you with the
specifics of your particular situation.
And then also I recommend the masterclass
that goes into great depths on these different
things you need to think about before you
just start making decisions.
03:13
Okay, so the first one, if you have employees
... This does not include independent contractors,
this is for employees.
If you have employees, by law, you are required
to give them time off if they have jury duty,
for example, or if they take time off to go vote.
That is your requirement as an employer to
give them time off.
Also, if they serve in the military and they
have military time that is required by law,
you cannot take away their job, you cannot
dock their pay, you cannot do any of these
things if they leave and go serve in the military,
which is, again, a requirement.
All right, another requirement is that you
must comply by all of the workman's compensation
laws by the state.
The states are a little bit different on what
they require, but by your state, you must
fulfill the workman's compensation laws.
Again, you have to withhold FICA, which is
a tax that you pay into as the employer, and
also the employee pays into that as well.
Then the state and federal unemployment taxes,
you are required by law to provide unemployment
04:16
taxes if, for example, you let somebody go
and they file for unemployment, you do by
law have to pay for that.
Another thing that you have to pay for is
that you have to contribute to short-term
disability programs that are required by state.
The states also vary and are a little bit
different on those.
But there are requirements and you do have
to pay into that.
Then another thing that you are required by
law to pay for is FMLA, which is a federal
leave of absence if a family member is sick,
or if they go to adopt a child, or if they
have maternity leave, or something like that.
Now, it's not paid time off.
It's 12 weeks of unpaid time off.
They get to go for 12 weeks.
Sometimes they have to take it all at once,
but some states let them take it a day at a time
so they can split it up and take it
when they need it.
Like if they're going across the country to
help an elderly parent or something, they
can take a week here and a week there in order
to make that happen.
Now, when they come back, by law you are required
to give them their job back.
Either their same job or an equivalent of
that same job.
05:17
So, you have to pay attention to that, that
you don't screw up on that.
Now, there are a couple of things here that
you are not required to pay.
This is interesting, but you are not required
to give them a retirement plan.
You are not required to give employees a life
insurance plan.
You are not required to give them dental or
vision plan.
It would be nice if you did, but it's not
required.
In health plans, you are not required to give
them health plans if you have under 50 employees,
except in the state of Hawaii.
You are not required to do that, either.
Then, also, last but not least, you are not
required to give them paid vacations.
Now, having said that you do not have to does
not mean that you should because there are
some benefits to offering employees paid vacations,
or paid time off, or giving them benefits
and bonuses that will encourage them to keep
coming back and working for you.
One of the things that you might consider
is what am I providing my employees?
It could be simple benefits like you have
a coffee bar, that when they show up for work
06:17
in the morning, you have clean bathrooms and
you have a coffee bar, which is something
they can take advantage of before they run
off and go to work.
There are little tiny things that you can do.
You may want to set up some kind of a program
or after an employee has worked for you for
a specific period of time, that you do offer
them a paid vacation or a paid benefit plan,
because that will also give them incentive
to keep coming back to you.
Whereas if they take the time off on their
own, they don't get paid for that time.
You are not required by law if you have less
than 50 employees.
If you have 50 employees, then the answer
is yes, you do.
I would check with ... Seriously, check with
an underwriter that specifically specializes
in the size of business that you have in order
to get the right policy for you because you
don't want to overpay.
You don't want to get a blanket policy where
you're paying for a bunch of stuff you don't need.
You don't want to get into a situation where
you're skipping stuff you are required to
pay because the fines and the fees on that
are so hefty, it can become really expensive.
07:19
All right, one last thing.
You asked how much does it cost?
On average, and this is in the United States,
on average, a benefits package for a full-time
employee is typically about 30 to 40% of their
base pay.
As you put together a benefits package, you
need to bring the awareness to your employee
how much money you're paying and what you're
paying it for.
My recommendation is to have a brief breakdown
of exactly what they're getting
and how much it costs.
Because if they just think, "Oh, I just have
this blanket policy," and they don't know
the value of it, they don't understand why
you're paying them a certain amount and the
value that their benefits package includes.
Now, I personally know kids and people that
work for companies specifically because of
the benefits package that is offered.
It is something they could not be able to
afford on their own if they were to have to
come out of pocket for those benefits.
So, give them a breakdown and let them know
what you're paying for it, and why you're
investing in them, and that you value their
service so much
08:21
that you are willing to pay this extra fee.
All right, that's my two cents for today.
I hope that helps.
Until we meet again,
leave the world a cleaner place than when you found it.