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The Complete Guide to Hiring a Caregiver

The Complete Guide to Hiring a Caregiver

By Jamie Gong ·

Jan 24, 2025 ·

5 mins read

Looking to hire a caregiver in Massachusetts? Whether you're seeking senior care, personal care assistance, or other household help, understanding your responsibilities as an employer is crucial. This guide walks you through everything you need to know about household employment, from tax obligations to best practices for creating a positive working relationship.

Understanding Household Employment Basics

What Makes You a Household Employer?

You're considered a household employer in Massachusetts if you:

  • Hire someone to work in or around your home

  • Direct how the work should be performed

  • Pay more than $2,700 annually (2024) or $1,000 in any quarter

Real-World Example: If you hire a caregiver to assist your aging parent for 15 hours per week at $25/hour, you'd pay approximately $19,500 annually, making you a household employer with specific tax and legal obligations.

The True Cost of Informal Employment

While paying "under the table" might seem easier, it creates significant risks:

For Caregivers:

  • No access to Social Security, Medical, or Unemployment Insurance benefits

  • Limited ability to build credit history

  • Difficulty obtaining mortgages or loans

  • No worker's compensation if injured

  • No documented work history for future opportunities

For Families:

Essential Requirements for Massachusetts House Employers

The IRS estimates that it would take you 60 hours to comply with the federal household employee regulations but we at Care Hero can help you through that process after you have found your ideal Care Hero.

Generally, you must:

  • Register: You need to obtain a Federal Employer Identification Number and register with the Massachusetts Department of Unemployment Assistance (DUA) and the Massachusetts Department of Revenue.

  • Set-up: Household employers in Massachusetts are required to carry a workers’ compensation insurance policy if their employee works 16 hours or more per week and provide an employment contract to their employee. Workers’ compensation pay for medical expenses and lost wages if an employee has a work-related injury or illness.

  • Payroll: With every pay period, withhold Social Security, Medicare and income taxes from the employee’s paycheck per the employee’s W4 and M-4 elections and make employer contributions to the Social Security, Medicare and unemployment funds.

  • Quarterly: Submit state employment tax returns. The agencies will typically include the IRS and the State.

  • Year-End: Provide your employee with his or her W-2 form, file Form W-2 Copy A/Form W-3 with the Social Security Administration (SSA), and prepare a Schedule H to file with your individual tax returns.

You can find all the information about your federal obligations in the IRS’s Publication 926 – Household Employer’s Tax Guide and your Massachusetts obligations in the Massachusetts Household Employer Guide.

You can find information on your federal and state obligations here:

1. Tax Obligations

Federal Requirements:

  • Social Security and Medicare (FICA): 15.3% total

    • Employer portion: 7.65%

    • Employee portion: 7.65%

  • Federal Unemployment (FUTA): 6% on first $7,000

    • You may be able to take a credit of up to 5.4% against the FUTA tax if you pay your state unemployment tax contributions, resulting in a net FUTA tax of 0.6%

  • Income tax withholding (optional for household employees)

Massachusetts Requirements:

  • State Unemployment Insurance: 1.45% for new employers (within 3 years) on the first $15,000 in wages

  • Paid Family and Medical Leave (PFML): 0.88% total

  • Workers' Compensation Insurance for employees working 16+ hours/week

2. Wage and Hour Rules

  • Minimum wage: $15.00/hour (2024)

  • Overtime: 1.5× regular rate after 40 hours

  • Required breaks: 30 minutes for 6+ hour shifts

  • Household employers in Massachusetts are required to provide up to 40 hours of unpaid sick time to their employees per year.

  • Regular paydays with detailed pay stubs

3. Required Documentation

  • Written employment agreement (for employees working 16+ hours a week)

  • Time tracking records

  • Tax and payment records

  • Workers' compensation notices

  • Required workplace postings

If you decide to handle payroll and taxes yourself, you’ll need to know about these forms:

  • Form I-9: Have your employee complete this form when hired and provide the required proof of ID.

  • Form W-4: Have your employee complete this form which dictates how much federal income tax is withheld.

  • Form 1040-ES: On a quarterly basis send this form to the IRS along with payment to report taxes from previous quarter. Don’t forget that federal quarter dates do not always line up with calendar quarters!

  • Form W-2: Fill out Form W-2 if you pay wages of $1,000 or more, and give Copies B, C and 2 to your caregiver. Copy A (along with Form W-3) goes to the Social Security Administration.

  • Schedule H: Required if you pay your nanny cash wages of $1,000 or more in a calendar quarter or $2,700 in a calendar year.

  • Massachusetts Directory of New Hires: Complete this form to report your new employee to the State.

  • M-4: Have your employee complete this form which dictates how Massachusetts income tax is withheld.

But if that sounds like too much, Care Hero can take care of all the administrative work after you have found a Care Hero! We gather all the information we need from you during signup, generate your forms through our system, make all the appropriate tax calculations, and submit everything on your behalf.

Success Story

"After years of struggling with household employment paperwork and worrying about compliance, Care Hero transformed how we manage our caregiver relationship. Everything is automated, compliant, and stress-free." - Sarah M., Newton, MA

Take Action Today

Ready to hire a caregiver the right way? Care Hero makes it simple:

  1. Schedule a consultation

  2. Review your specific needs

  3. Get matched with qualified caregivers

  4. Start your compliant employment relationship

Don't let household employment complexities overwhelm you. Let Care Hero handle the details while you focus on what matters most – ensuring quality care for your loved ones.

Last Updated: December 2024

Note: While this guide provides comprehensive information about household employment, specific situations may require professional tax or legal consultation. Care Hero can help connect you with appropriate resources as needed.

Sources

For reference - Do not post

We know you’re busy so here’s a quick “to-do” list with links to extra details below.

Beginning of employment

During employment

Optional benefits for your employee

Ending employment

Beginning of employment

Verify caregiver’s work eligibility

Before your employee begins to work, you need to fill out Form I-9 to verify they’re eligible to work in the U.S. The I-9 does not get sent to any government agency but must be presented to authorities if your nanny or senior caregiver’s employment eligibility is ever questioned.

Set up EIN & state tax account(s)

You must first apply for a EIN (Employee Identification Number) with the IRS. This will be used as your unique ID with both state and federal tax authorities. Then you can open an account with your state taxing authority.

Workers’ compensation

Household employers in Massachusetts are required to carry a workers’ compensation insurance policy if their employee works 16 hours or more per week. These policies pay for medical expenses and lost wages if an employee has a work-related injury or illness. Obtain an instant quote and purchase a policy online, or contact our partner, Clarke White, at 804-267-1210 or wcnanny@allrisks.com.

Employment contract

Household employers in Massachusetts are required to provide an employment contract to their employee if he or she works 16 hours or more in a week. Additionally, families must provide a written evaluation of the employee’s work performance after 3 months of employment and annually thereafter if their employee requests it.

Employment posters

Families in Massachusetts are required to notify their employee of their rights by sharing these posters.

During employment

File returns, remit taxes and manage correspondence

  • File state employment tax returns throughout the year and remit state employer and employee taxes.

  • Remit federal employer and employee taxes via 1040-ES estimated tax payment voucher four times each year.

  • Each year end, prepare Schedule H and file with Form 1040; prepare and distribute Form W-2 to each employee; file Form W-2 Copy A/Form W-3 with the Social Security Administration (SSA).

  • Manage ongoing alerts and notices from the state (tax rates and labor law is subject to change at any time).

Minimum wage rate

The current minimum wage in Massachusetts is $15.00/hour.

Massachusetts overtime requirements

  • Live-out employees must be paid 1.5x their hourly rate for all hours worked over 40 in a workweek.

  • Live-in employees are required to be paid overtime.

  • Overtime is not required to be paid when work is performed on a holiday.

  • Massachusetts household employees must be given at least 24 consecutive hours of rest each calendar week and 48 consecutive hours of rest per month if they work 40 or more hours. If the employee agrees to work on their day of rest, they must be paid overtime for each hour they work that day.

Mileage reimbursements

Massachusetts employers must reimburse employees if they are required to drive their own vehicle on the job. The current federal mileage reimbursement rate is 67 cents per mile and miles driven commuting are not eligible for reimbursement.

Unpaid sick time

Household employers in Massachusetts are required to provide up to 40 hours of unpaid sick time to their employees per year.

Maternity leave

Massachusetts household employees are allowed to take up to 8 weeks of unpaid maternity leave if they have worked full-time for the previous 3 months. Employers are required to hold the employee’s job if they decide to return to work.

Optional benefits for your employee

Health insurance

Families with only 1 employee can make contributions toward their employee’s health insurance premiums and treat the amount as non-taxable compensation. In this scenario, neither the employee nor the employer are required to pay any taxes on that portion of the compensation.

Families with 2 or more employees have 3 options:

  1. Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA).

  2. Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).

  3. Purchase a policy through SHOP (Small Business Health Options Program).

Visit our health insurance page for more information about these options.

Ending employment

Termination requirements

Household employers in Massachusetts are required to provide their employee with a termination notice when they are let go from their job that explains their right to unemployment benefits.

If a live-in employee is let go without cause, families must give written notice and either:

  • Let the employee continue living in their home for at least 30 days;

  • Pay for 30 days of comparable off-site housing; or

  • Give 2 weeks of severance pay to the employee.

Managing unused PTO

Massachusetts household employers do not need to pay their employees for unused sick time, but are required to pay out any unused vacation time.

Close down your state employment tax account(s)

The state tax agencies expect you to file timely returns for as long as your tax accounts are open — even to report $0 in wages paid.

Maintain payroll records

Do I need to have a written contract with my employee?

If your employee works 16 or more hours a week, you must have a written employment agreement signed by you and your employee that includes: the regular and overtime rate of pay; raises or increases in pay for added duties or skills; work schedule and job duties; rest periods, sick leave, holidays, vacation and personal days; any other benefits; any charges or pay deductions; the eligibility for workers’ compensation; the process for raising and resolving concerns; and the notice of termination by you or employer. For live-in employees, the agreement must also specify why and when the employer will enter your living space, and “cause” for termination. This agreement must be written in a language that the employee understands. The Massachusetts Attorney General has template employment agreements in EnglishSpanish and Portuguese.

It is a really good idea to have a written employment agreement with your employee. A written employment agreement spells out the obligations of both parties, including hours, compensation, duties, benefits and PTO. This is really important if the relationship doesn’t work out, and there is ever a dispute. Just as important, it helps you discuss the important issues with your employee at the outset. This way you make sure you have a good relationship and understanding before you even start.

SALARY OR HOURLY WAGES

Your employee is entitled to minimum wage and overtime regardless of whether they are paid hourly or salary. If they are paid by salary, it is best practice to document the hours worked (and the pay rate) included in the salary amount.

PAYSTUBS

Massachusetts law requires employers to give employees an itemized paystub with every paycheck. With Poppins Payroll, you can have paystubs emailed directly to your employee every payday.

PAY PERIODS

Massachusetts household employers are required to pay employees all wages due weekly or bi-weekly. In most cases, hourly employees must be paid within 6 days of the end of the pay period. At Poppins, we comply with this requirement, even for those clients who use direct deposit.

TIME SHEETS

If your household employee works 16 or more hours a week, you must give him or her a timesheet at least every two weeks that shows the number of hours worked each day. The time-sheet should be signed or acknowledged by both you and your employee. The state provides sample timesheets in EnglishSpanish and Portuguese.

MILEAGE REIMBURSEMENT

Massachusetts employers must reimburse employees if they are required to drive their own vehicle on the job (not including commuting to and from work). You can use the current federal mileage reimbursement rate. Mileage reimbursement is not considered taxable compensation. To ensure the amount is not taxed, enter mileage reimbursements as a “Reimbursement” amount on your payroll.

TERMINATION WAGES

If a Massachusetts employee is terminated, he or she must be paid their accrued wages on his or her last day of work. If the employee quits, he or she must be paid on the earlier of the next regular payday or by the first Saturday after they quit (if there is no regular payday).

POSTING REQUIREMENTS

All Massachusetts household employers are required to provide their employees with a Notice of Rights for Domestic Workers in a language they understand. The Massachusetts Attorney General provides these notices in SpanishPortuguese and Tagalog. There are a number of other notices that Massachusetts employers must post or provide to their employees.

PAYROLL RECORDS

Household employers must keep accurate records of hours worked by employees and wages paid on an ongoing basis. These records must be kept for at least 3 years. With Poppins, we’ll keep all this information in your online filing cabinet, which you’ll be able to access even after you’re not using us to run your payroll.

REST PERIODS AND MEALS

Domestic workers in Massachusetts who work 6 or more hours in a day have a right to an unpaid 30-minute meal or rest break every workday and those who work 40 or more hours a week must get at least 1 full day (24 hours) off each week and 2 full consecutive days (48 hours) off each month. A worker can give up these rest periods through a written agreement with the employer.  The agreement must be in a language the worker easily understands and must be made before the specified rest period is missed.

If the worker is on duty for less than 24 hours, the employer must pay for all meal, rest, and sleeping periods, unless the worker has no work duties and is allowed to leave during those times.

If the worker is required to be on duty for 24 hours or more, the worker and employer may agree that some meal periods, rest periods, or sleep periods up to 8 hours will not be counted as paid working time.

MEAL DEDUCTIONS

Employers may charge for food and drinks that they provide to the worker up to $1.50 for breakfast and $2.25 for lunch or dinner. The employer may not make deductions unless the worker agrees voluntarily to these deductions in writing in a language the worker easily understands.  The agreement must be made before any deductions are made.

HOUSING DEDUCTIONS

A Massachusetts employer may not deduct the cost of a room or other housing if the employer requires the worker to live in that place. An employer may deduct the cost of housing only if the worker chooses to live there and the housing meets the local and state health code standards for heat, water, and light.   The employer must not charge more than: $35 a week for a room with 1 person; $30 a week for a room with 2 people; or $25 a week for a room with 3 or more people. The employer may not make deductions unless the worker agrees voluntarily to these deductions in writing in a language the worker easily understands.  The agreement must be made before any deductions are made.

SHIFTS OF LESS THAN 3 HOURS

If your employee’s normal shift is three hours or more long, you must pay you for at least three hours of work for each day your employee reports to work. In other words, if you send your employee home early, you still must pay your employee for at least three hours of work. You can pay your employee minimum wage for the unworked hours, even if you usually pay your employee more than minimum wage.

MATERNITY LEAVE

Massachusetts employees may take up to 8 weeks of unpaid, job-protected leave for the birth or adoption of a child. They must give the employer at least 2 weeks’ notice of the dates the leave starts and ends.

SICK LEAVE

Massachusetts employers with less than 11 employees must provide each employee not less than one hour of unpaid sick leave for every 30 hours worked. An employer may cap the annual accrual of sick leave for each employee at 40 hours. An employer must allow an employee to carry over from one calendar year to the next up to 40 hours of unused accrued sick leave. With Poppins, you can track sick leave right in our system and the balances will be automatically included on your employee’s pay stubs based on the polices you set up.

COVID LEAVE

The Massachusetts Temporary Emergency Paid Sick Leave Program requires employers of any size to provide for up to 40 hours of paid sick leave for the following reasons:

  • To self-isolate because of the employee’s COVID diagnosis;

  • To obtain medical care or treatment for, or seek a diagnosis of COVID;

  • To obtain or recover from the COVID vaccine;

  • To care for a family member who has COVID or is self-isolating; or

  • To help a family member obtain a vaccine or recover from an injury or illness related to the vaccine.

The law provides a maximum benefit allowance of $850. Wage reimbursement from the state is available to employers that pay out COVID time-off. If the $75 million allocated for this purpose is exhausted at some point in time earlier than April 1, 2022, the law will no longer be in effect.

JOB EVALUATIONS

Massachusetts household employees have the right to ask their employer for written feedback about their work 3 months after they start working, and once a year after that.

SPECIAL RULES FOR LIVE-IN EMPLOYEES

Employers who have phone or Internet service must give their live-in employees free and reasonable access to those services. If you fire a live-in employee without “cause”, you must (1) give written notice, and (2) allow at least 30 days of the same or similar housing where you are now or in similar housing OR provide severance pay equal to average pay for 2 weeks. If you choose to provide housing at another location or severance pay, you must have at least 24 hours to move out. If you fire your employee for “cause”, you must (1) give written notice, and (2) a reasonable opportunity of at least 48 hours to move out. If the employer makes a written statement in good faith saying you did something that harmed the employer or his/her family or household, the employer can end the job immediately without additional compensation or time to move out.

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Batten Hall, 125 Western Ave. Allston, MA 02134

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© 2024 by Care Hero™

All rights reserved.

Find Your Care hero

Batten Hall, 125 Western Ave. Allston, MA 02134

Subscribe for the latest updates

© 2025 by Care Hero™ All rights reserved.