Step 1: Obtain workers' compensation insurance coverage

All California employers are required to maintain workers’ compensation insurance coverage for on-the-job injuries. This insurance is typically provided under your homeowner’s or renter’s insurance policy. You might already be covered, but check with your insurance provider to be sure you are sufficiently covered. You may need to add a rider to your policy depending on the number of hours your employees work each week.

Resource: State of CA - Division of Workers' Compensation (DWC) - Employer Information

Step 2: Have your employee complete the I-9 form

Federal law requires that all employers request this form to be completed by the prospective employee. Don’t submit it to anyone, just keep it with your employer records in case of an audit.

I-9 form: https://www.uscis.gov/i-9

Step 3: Have your employee complete the W-4 form

W-4 form: https://www.irs.gov/pub/irs-pdf/fw4.pdf

To be sure your employee doesn’t get an unexpected tax bill, or have too much withheld, have them complete a W-4 form when they are hired, or anytime they experience a change in their withholding requirements (marriage, birth of child, additional income, etc.). You can update your employee’s W-4 settings in the Nest Payroll app at anytime during the year.

Step 4: Have your employee sign the CA wage notice

Wage Notice form: https://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf

All CA employers are required to provide this notice to their employee at the time of hiring. You can fill it out online, print two copies (one for each of you) and each sign both copies. Your signed copy should be retained with your employer records in case there is ever a wage dispute.

Step 5: Give your employee these 4 benefit notices

CA law requires all employers provide the following notices to their employees:

Notice to Employees (DE 1857A) (PDF)

For Your Benefit: California’s Programs for the Unemployed (DE 2320) (PDF)

Disability Insurance Provisions (DE 2515) (PDF)

Paid Family Leave (DE 2511) (PDF)

Step 6: Have an agreement (optional but suggested)

Having an agreement reduces awkwardness and misunderstandings, especially as things come up you just didn’t anticipate. If you don’t have an agreement with your employee, you can download this one and modify for your situation. This one is for a nanny, but you can easily change out the role of the employee, such as for a housekeeper or caregiver, making it work for you.

Additionally, Hand In Hand is a great resource for tackling all sorts of challenges that come with household employment, creating a more dignified and respectful workplace for all. Please take advantage of their excellent and free sample contracts and guide books.

Step 7: Background Checks

If you’re hiring a caregiver for children, TrustLine.org is California’s registry of in-home child care providers who have passed a background screening and is the only authorized screening program of in-home caregivers in the state with access to fingerprint records at the California Department of Justice and the FBI. If a potential caregiver is insulted that you’ve asked, or is unwilling to apply, you should be concerned about this person’s commitment to providing good care. You’ll need the full name and the driver’s license number of your caregiver for the check.

If you are hiring a caregiver for elders, Family Caregiving Alliance has some advice on how to proceed on background checks, and CA Dept. of. Social Services will be launching a new system called Guardian in the Fall of 2020.

Step 8: Follow the labor laws for California

PAID SICK TIME: REQUIRED

Year 2024: Five days or 40 hours per year.

This time can be offered upfront, or can be accrued at a rate of 1 hour for every 30 hours worked. Paid sick time taken can be entered in the Nest Payroll app when creating a paycheck.

Resource: California Paid Sick Leave: Frequently Asked Questions

Nest Payroll app / Calculating Sick time: Guidance on calculating sick leave hours

VACATION TIME or PAID TIME OFF: NOT REQUIRED

Paid vacation time is not required, but it could be an important benefit to offer. If you do, you must follow certain guidelines. For example, California considers accrued vacation to be a form of wages that have already been earned by the employee. Accrued vacation cannot expire and must be paid out to an employee upon termination or separation from the employer. The same rules apply to PTO you may have negotiated. Vacation/PTO hours can be entered in the Nest Payroll app when creating a paycheck.

Details: State of CA - Labor Law - Vacation

MINIMUM WAGE: REQUIRED

All household employees are classified as hourly (non-exempt) and are subject to minimum wage protections. To check if your city has a higher minimum wage requirement than the state, click on the following:

CA Dept. of Industrial Relations- Minimum Wage

The Economic Policy Institute - Minimum Wage Tracker

Also, when you add an employee to the Nest Payroll app, the minimum wage for your city should pop up.

OVERTIME: REQUIRED

Overtime of 1.5x the hourly rate for any hours worked over 8 in the same day or over 40 regular hours in a week. If your household employee is considered a “personal attendant”, then the overtime threshold is 9 hours a day.

Details: Sate of CA - Labor Commissioner's Office - The Domestic Worker Bill of Rights –Frequently Asked Questions

PAYROLL FREQUENCY: MINIMUM TWICE PER MONTH

In CA, domestic workers, including nannies, must be paid at least twice per month. This means that you must pay your household employee at least semi-monthly, or more frequently such as daily, weekly or bi-weekly. Nest Payroll has weekly pay periods because government agencies require hourly/non-exempt wages to be evidenced in weekly periods due to overtime laws. If you prefer to pay every two weeks here’s how:

Pay two pay stubs at the same time every two weeks (the pay stubs remain as weekly).

You can also use the recurring pay stub option so you won't need to remember or double check which weeks you paid. The pay stubs will be waiting for review on the main dashboard. Every two weeks you simply approve the two pay stubs waiting on your dashboard, and you can always edit the hours or the other items if you need to before approving each one.

Details: https://www.dir.ca.gov/dlse/faq_paydays.htm

Upon Departure

If your employee leaves involuntarily, please give your employee the Change in Relationship Form below. Please give all employees the 2nd handout about unemployment from California:

Change In Relationship Form

For Your Benefit: CA’s Programs for the Unemployed

Disclaimer: The information provided on this page is general in nature. This is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult an attorney or financial advisor for your specific situation.