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Tuesday, April 22, 2014

SHOULD I MARRY MY CARETAKER TO AVOID PAYING OVERTIME?

Don’t laugh.  I’m not going to dig up any legal authority for this, but I think we can all agree that, historically, spouses have been very economical choices for fulfilling household duties.  Not to mention the other benefits…

And household help is getting more expensive.  (Or at least it should be, if you are following the new laws.)




Effective January 1, 2014 California instituted a Domestic Workers Bill of Rights.  Under this law “personal attendants” must be paid overtime if they work more than nine hours in a day or more than 45 hours in a work week.  Overtime pay for a personal attendant is one and one half times the regular rate of pay.  A “personal attendant,” by the way, is someone who is employed in a private household to supervise, feed or dress a person who needs such assistance.  It isn’t a housecleaner.  A housecleaner is a different type of employee who gets paid double the regular rate of pay for overtime.  And, by the way, that regular rate of pay must be at least minimum wage — which is going up statewide and may already exceed $10 an hour in your city (hello San Francisco and San Jose!).  Oh and you must pay for all “hours worked” which basically means all of the time that they were under the employer’s control and/or that they did actual work— even if the employer did not require it but allowed it to happen.  It gets especially sticky when the caregiver lives at the house or is on call.

And you must pay employment taxes.  Household employees like personal attendants and regular nannies are always employees not contractors.  Ask your CPA about the lovely costs of getting caught mislabeling them.

So lets have a little math fun.  We here at Ask Roxy just adore math fun.  Effective July 1, 2014 minimum wage in California will be $9.00 an hour.  If you need 24/7 care after July 1st you must add $9 times 45 hours a week ($405.00) plus the overtime rate of $13.50 for the other 123 hours per week ($1,660.50) to equal a total cost of $2065.50 per week.  There are 52 weeks in a year so, not counting employment taxes, you are paying your caregiver $107,406.00 — assuming that you don’t live in an area that has a higher minimum wage and assuming that you are only paying minimum wage.

But what if you found a wonderful person who is “just like family” and doesn’t require you to pay as much as you must under labor laws?  Here is some breaking news.  You are probably employing someone who has even less money than you.  Someone who has even less money than you do might decide that simply sitting on a strong case for thousands of dollars in unpaid wages is too good an opportunity to pass up.   Also, even if they do feel like family and neglect to demand what they are due from the elderly person they are caring for, they may have a change of heart when that person has died, they are looking for a new job, and the real family isn’t actively trying to share the inheritance with the person who felt like family.  They might never have sued mom, but they have no problem making a claim against mom’s estate or suing you after she is gone.  Because really, under the law, they aren’t family.

But what if they were family?  Any person who is the parent, grandparent, spouse, sibling, child, or legally adopted child of the employer is excluded from the legal definition of a domestic work employee.  They can’t sue under those basic labor laws.  Notice that grandchild is not on that list.  You must pay your grandchildren.

Still laughing at my reader who wants to marry his caretaker?  Or adopt her?  I always tell my Ask Roxy readers to make the legal paperwork fit the reality, like in my post, How Can I Legally Have Two Wives?  In this case, if you love them like family, you treat them like family, and you tell them they are family, I don’t see anything wrong with making them family.

However, please allow me to point out the well worn path of pitfalls:

1) If you have promised this person that they will inherit as a relative you must make sure that your estate plan is clear on this.  For example, many people have provisions tucked away in their wills or trusts that specifically exclude “children” adopted after they were already adults.  Even if your estate plan is clear, your attorney must make sure it is also legal (nobody forced you to sign, unduly influenced you to sign, got you drunk, etc.).

2) If you have other potential heirs, like natural born children, you might want to be very clear with them as to what you are doing and what you expect.  You might also talk to your attorney about ways to prevent them from contesting your will.  Basically, and regardless of any of this labor/tax law stuff, any time you change your estate plan to include a new heir, or remove an heir, you are potentially encouraging litigation and hard feelings.  Just check out what is going on with the estate of Tony Curtis’, who disinherited his five children, including the lovely Jamie Lee Curtis, shortly before he died, leaving almost everything to his younger fifth wife.

So, in conclusion, if you decide to marry your caretaker — for whatever reason — and you have reason to fear that your relatives will be grumpy about a reduction to their inheritance, talk to an attorney and get your ducks in a row.

Also, in addition to my usual disclaimer, I want to add that there may be laws out there specifically prohibiting people from adopting or marrying for any other reason but love, sweet love.  I haven’t looked that far into it, but it would be fun to try to prove up that one in court.

P.S.— Before you run to the alter, you might also want to check out my post, “DO I NEED A PREMARITAL AGREEMENT IF I LOVE MY FIANCÉ?”  OR MY POST  “WHEN SHOULD I START WORKING ON MY PREMARITAL AGREEMENT?”






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