Healthcare Benefits for House Cleaning Employees

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.

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

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.

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

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.

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

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.

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

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.