I receive calls from time to time from clients who have “employed” individuals to work around their home. Be it for domestic services, home improvement related work, or gardening, when you hire one of these individuals (including day workers) you are in fact an employer under the definition of the labor code and, more recently, by a holding just rendered by the California Supreme Court.
In reaching it’s the decision, the California Supreme Court held: “To employ, then, under the IWC’s (Industrial Commission Welfare Order) definition, has three alternative definitions. It means: (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work or (c) to engage, thereby creating a common law employment relationship.” In clarifying section (b) above you merely have the power to stop or prevent a person from working. To clarify (c) “To engage” someone to work means that YOU are the actual entity that hired the “employee” to do the work.
Think about it. You hire an “individual” at your home to assist with some project. You negotiate the amount the person will be paid, the time you want them to show up (most homeowners want to be home at the time to direct the work etc.) and overall you control the working conditions. You have just become an employer within the definition.
You are now required to pay no less than minimum wage, and you must provide breaks and lunch time (some workers even negotiate that you provide lunch). But wait, you are also required to have workers compensation because you are an employer ($1,000 fine per individual and $1,500 effective January 1, 2011) and you are required to have them provide documentation that they can legally work in the U.S. If you fail to have an I-9 on file you can be fined $10,000.
I have been to the Workers Compensation Appeals Board and heard horror stories about homeowners who were being sued because their “day worker” had been injured in the performance of their duties. I know we hire these individuals because we want the “discount” as opposed to the hirer fees charged by a company bidding on the same project but there are other considerations that you must think about. Cheaper may not be cheaper in the long run. Be careful.