What Is Domestic Work? Roles, Wage Rules, and Employer Taxes

Domestic work is paid labor performed inside a private home for the benefit of the people who live there — cleaning, cooking, childcare, elder care, gardening, and similar household services. When you hire someone to do this work on a regular basis, federal law generally treats that person as your employee, which brings minimum wage rules, tax obligations, employment verification, and record-keeping duties along with the job.

What Tasks Count

The defining feature is that the work serves a private household rather than a business. Routine cleaning, laundry, and organizing make up the bulk of it in most homes. Meal planning, cooking, and grocery shopping qualify. So does caring for children, supervising elderly family members, and helping people with disabilities manage daily activities like bathing, dressing, and eating.

Outdoor work counts too when it benefits the household directly. Mowing, gardening, trimming hedges, and maintaining irrigation are domestic work if the homeowner hired the person for that home. The IRS lists babysitters, cooks, housekeepers, maids, nannies, yard workers, health aides, drivers, and caretakers among common examples of household employees.¹

Not everything done inside a home qualifies. Tutoring, secretarial work, and librarian services aren’t domestic work even if they happen at your kitchen table, because those tasks aren’t household maintenance.¹

Common Household Roles

Nannies handle childcare during the workday, including schedules, activities, and safety. Housekeepers clean, organize, and restock. Private chefs plan and prepare meals around a family’s preferences. Au pairs combine childcare with cultural exchange, usually in a live-in arrangement tied to a formal visa program. Gardeners and groundskeepers maintain lawns, beds, and irrigation. Caregivers and home health aides assist people who need help with daily living because of age, illness, or disability.

That last group sits at a legal boundary. A non-medical caregiver who provides companionship and help with meals or grooming is treated one way under federal wage law; a registered nurse, licensed practical nurse, or certified nursing assistant performing medical tasks is treated another. More on that below.

Employee or Independent Contractor

The most consequential question when you hire household help is whether the person is your employee or an independent contractor. If you control when the work happens, how it gets done, and what tools are used, the worker is almost certainly your employee. Paying the person directly and having them work in your home reinforces that.²

Independent contractors serve the general public, control their own methods, and supply their own equipment. A plumber who fixes your sink is not your employee. A housekeeper who comes every Tuesday using your vacuum and following your instructions is.

Getting this wrong is expensive. Misclassifying an employee as a contractor means you haven’t withheld or paid employment taxes, haven’t tracked hours, and may owe back wages. Both the IRS and the Department of Labor treat it seriously.

Who Isn’t a Household Employee

A few situations consistently fall outside the framework:

Casual babysitters and sporadic help. A teenager who watches your kids on occasional Saturday nights, or a neighbor who helps with yard work now and then, generally falls outside federal labor rules. Irregular scheduling and no ongoing expectation are the key factors.
Professional tradespeople. Plumbers, electricians, painters, and roofers visiting for a specific repair are self-employed or work for a company. The relationship is a one-off contract.
Agency-provided workers. When a staffing agency sends someone to your home and the agency controls the work, the agency is the employer. You pay the agency, and the agency handles wages, taxes, and compliance.¹

One trap: hiring someone through an agency referral list doesn’t make the agency the employer. If the agency just gives you a list of candidates and you hire, direct, and pay the worker yourself, that person is your employee no matter how you found them.¹

Wage Rules That Apply

Most domestic employees are entitled to the federal minimum wage of $7.25 per hour and, when they work more than 40 hours in a week, overtime pay at time and a half. Two important exceptions modify that baseline.

Companionship Services

Federal regulations carve out a narrow exemption for workers who provide “companionship services,” meaning fellowship and protection for elderly individuals or people with disabilities who can’t fully care for themselves. A companion can assist with dressing, grooming, and meal preparation, but those care tasks can’t exceed 20 percent of the total hours worked in a week. Cross that line and the worker must be paid minimum wage and overtime for all hours.³

Registered nurses, LPNs, and CNAs never qualify for this exemption regardless of their duties. Under the current regulations, third-party agencies that employ companions can’t claim it either, even when the worker would qualify if hired directly by a family.³ The Department of Labor proposed changes to these rules in 2025, so check the current regulatory status before relying on the exemption.

Live-In Workers

Employees who reside in the household are exempt from federal overtime. They still get minimum wage for every hour worked, but no time and a half beyond 40.⁴ Because a live-in employee is present far more than they’re actually working, you and the worker can agree in writing to exclude sleep time, meals, and genuine free time from the hours count. Free time only counts as excluded if the worker is truly free from duties. If you interrupt a sleep period or meal to call the worker back to work, that interruption counts as hours worked.⁵

Providing housing and meals can be credited toward wages, but only up to reasonable cost or fair value, whichever is lower, and only when the lodging primarily benefits the worker rather than being required for your convenience. The credit can’t push cash wages below minimum wage for hours actually worked.⁶

Tax Duties as a Household Employer

Once you’re paying a household employee, the IRS expects certain filings from you.

Social Security and Medicare taxes kick in when you pay any single household employee $3,000 or more in cash wages during 2026. The combined rate is 15.3 percent, split evenly between you and the worker: 7.65 percent from your pocket, 7.65 percent withheld from theirs. If you pay a worker less than $3,000 for the year, neither of you owes these taxes on those wages.¹

Federal unemployment tax (FUTA) is separate. It kicks in if you pay total cash wages of $1,000 or more to all your household employees combined in any calendar quarter. Once triggered, you owe FUTA on the first $7,000 of wages paid to each employee that year, entirely out of your own funds — never withheld from the worker.¹

Federal income tax withholding is not required. You only withhold it if the worker asks and you agree, in which case they complete a Form W-4.¹

You report all of this on Schedule H, attached to your Form 1040 by April 15 of the following year. If you don’t otherwise need to file a return, you still file Schedule H on its own. You’ll need an Employer Identification Number first; you can apply online at IRS.gov/EIN or mail Form SS-4.¹

Many families don’t realize they’re household employers until tax season. Interest and penalties for late filing and late payment accumulate monthly, and back taxes from prior years can add up to a serious bill.¹

Employment Verification and Records

Federal immigration law requires you to verify work eligibility with Form I-9 no later than the worker’s first day. The worker completes their portion; you review identity and work authorization documents. Casual, sporadic, or intermittent domestic work is exempt from the I-9 requirement, just as it is from the wage rules.⁷

Federal law requires you to keep certain records for every domestic employee entitled to minimum wage or overtime:

Full name, Social Security number, and home address.
Daily hours and weekly totals for each workweek.
Total cash wages paid each week, any overtime, and any amounts claimed for room or board.

For a worker on a fixed schedule, you can keep the schedule and note deviations rather than logging every hour from scratch. Live-in employees require stricter tracking, including a copy of any written agreement excluding sleep, meals, or free time. Payroll records must be kept at least three years; supporting documents like time cards and schedules, two years.⁸

Final Pay When Employment Ends

Federal law does not require an immediate final paycheck when a domestic employee is fired or quits. The worker must be paid by the next regular payday for the last pay period worked.⁹ State law often demands faster payment, sometimes immediately, and the penalties for missing state deadlines can be significant. Check your state’s wage payment rules before ending an arrangement.

Safety and Insurance

Federal OSHA does not apply to individuals who privately employ workers in their own residences for ordinary household tasks like cleaning, cooking, and caring for children.¹⁰ The exemption is narrower than most people assume. Workers employed by agencies that send staff into homes may still fall under OSHA, and the exemption doesn’t erase your general duty as a property owner to keep the premises reasonably safe.

Workers’ compensation is a separate question governed by state law. Some states require coverage once a domestic worker exceeds a certain number of weekly hours; others exempt household employers entirely. A standard homeowners’ policy likely will not cover a domestic worker’s on-the-job injury, so ask your insurer whether you need a separate workers’ compensation policy or an endorsement.

State Laws That Go Further

Federal rules set the floor. Over the past fifteen years, roughly ten states and several cities have enacted domestic worker bills of rights that add protections: mandatory overtime including for live-in workers who are federally exempt, guaranteed rest days, written contracts, paid time off, and anti-harassment provisions. Many states also set minimum wages well above $7.25, with several above $15 per hour.

Before you write your first paycheck, check your state labor department’s rules for domestic workers. The gap between federal and state obligations can be large, and state rules are often the ones that create liability when overlooked.

1
Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
2
eCFR. 29 CFR 552.101 – Domestic Service Employment Under the Fair Labor Standards Act – General
3
eCFR. 29 CFR Part 552 – Application of the Fair Labor Standards Act to Domestic Service
4
Office of the Law Revision Counsel. 29 U.S. Code 213 – Exemptions
5
eCFR. 29 CFR 552.102 – Live-In Domestic Service Employees
6
U.S. Department of Labor. Credit Towards Wages Under Section 3(m) Questions and Answers
7
U.S. Citizenship and Immigration Services. 2.0 Who Must Complete Form I-9
8
U.S. Department of Labor. Fact Sheet 79C – Recordkeeping Requirements for Individuals, Families, or Households Who Employ Domestic Service Workers Under the FLSA
9
U.S. Department of Labor. Last Paycheck
10
Occupational Safety and Health Administration. 29 CFR 1975.6 – Policy as to Domestic Household Employment Activities