Healthcare benefits for house cleaning employees – do they exist? Are we required by law to provide healthcare benefits and if so what and how much?
We Ask a House Cleaner about Healthcare Benefits for your maid service.
Angela Brown, The House Cleaning Guru shares mandatory regulations for employee benefits.
Today’s sponsors are Savvy Perks (employee perks for small business owners.) Savvy Cleaner (house cleaning training.) And My Cleaning Connection (A hub for all things cleaning.)
Listen: Healthcare Benefits for House Cleaning Employees
Watch: Healthcare Benefits for House Cleaning Employees
Hey there, I’m Angela Brown, and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer.
Question: Healthcare Benefits for House Cleaning Employees
Healthcare benefits for housecleaning employees. Are you, as an employer, required to pay? This questions just in:
“Hi, Angela. For our full-time employees, do we have to give them healthcare? If so, how much usually does healthcare cost for a smaller company to give healthcare to their employees? Also, are we supposed to hire our employees as W-2 workers or are we just supposed to pay them out of our pocket? Thank you.”
All right. That’s a multifaceted question about the healthcare benefits for full-time employees.
Answer: Rules for Full-Time Employees Salaries
The keyword that you used was employee, not independent contractor. As an employer, yes, you use a W-2 and to pay above the line. An independent contractor would get a 1099. W2’s vs. 1099’s it’s confusing I know, but the W2’s are for full and part-time employees. Which means you take out the FICA. And pay for the Medicaid, and the social security, and all the things required by law if you live in the United States.
Now, the rules are a little bit different based on where you live across the world. My recommendation would be to check with your state and local governments. Make sure that you are in compliance with all the payments required for salaries for full-time employees.
Healthcare Benefits for Employees
All right, now over to the healthcare benefits, which is going to vary and it’s not easy. I need to preface this by saying that you need to check with someone who has information on this. This is not information for a small business owner wearing many hats.
There are lots of mistakes made by small business owners when it comes to providing a benefits package for their employees.
The mistakes come in the form of costly federal tax fees and fines. Mistakes made also include state employment taxes and fines.
And then also in making errors in buying the wrong or paying too much for some kind of a package that you buy for your employees.
Affordable Care Act – Obamacare
On January 1st of 2015, the Affordable Care Act, also known as Obamacare became effective. If you have over 50 full-time employees, you must by law provide them a health benefits package. If you have under 50 employees, this law doesn’t apply to you.
The Law Says You Must Do These Basics:
- If you have employees, by law, you must allow them time off if they have jury duty, or if they take time off to go vote. Also, if they serve in the military and they have mandatory time to report for duty.
- Your company cannot take away their job or dock their pay while they are in active duty.
- You must abide by all workman’s compensation laws by the state. Check with your local government to see what the rules in your area are for Workman’s compensation.
You Must Pay the Tax Man
- FICA (Federal Insurance Contributions Act) is mandatory. You must withhold FICA, which is a tax that you pay into as the employer, and also the employee pays into that as well.
- You must pay state and federal unemployment taxes. (If you let somebody go, and they file for unemployment – you do have to pay that.)
- Another must be contributions to short-term disability programs by the state. The states also vary a bit different on those. But there are requirements and you do have to pay into that.
FMLA – Family and Medical Leave Act
FMLA is yet another thing required by law. This is a federal leave of absence if a family member is sick. Or if they go to adopt a child, or if they have maternity leave, or something like that. Now, it’s not paid time off. It’s 12 weeks of unpaid time off. They get to go for 12 weeks.
Sometimes they have to take it all at once, but some states let them take it a day at a time. so, they can split it up and take it when they need it. Like if they’re going across the country to help an elderly parent or something, they can take a week here and a week there in order to make that happen.
Now, when they come back, by law you are required to give them their job back. Either their same job or an equivalent of that same job. So, you have to pay attention to that, that you don’t screw up on that.
You’re Off the Hook For These:
Now, there are a couple of things here that you are not required to pay.
- You are not required to give them a retirement plan.
- Nor are you required to give employees a life insurance plan.
- You are not required to give them dental or vision plan. It would be nice if you did, but it’s not required.
- If you have under 50 employees you are not required to give them health plans except in the state of Hawaii.
- Paid vacations are not mandatory either. If you have full-time employees you should give them vacations because it’s the right thing to do, but by law, you don’t have to.
What Can You Offer Besides Healthcare Benefits?
How about a simple coffee bar at your business? Your employees show up for work in the morning and you have a coffee bar with teas, coffees and hot chocolate. Maybe a bowl of fruit or granola bars.
And how about clean bathrooms. It’s an odd perk but appreciated to always get to use a clean restroom at your place of business.
The stuff you offer doesn’t have to be expensive. But the little things do add up.
If you set up a healthcare program – check with an underwriter who specializes in small business.
I’ve included a few of the resources below that offer benefits plans starting at $63 per month per employee.
This type of program may be the difference in retaining good employees.
How Much Does a HealthCare Benefits Program Cost?
All right, one last thing. You asked how much does it cost? On average, and this is in the United States, a benefits package for a full-time employee is typically about 30 to 40% of their base pay.
As you put together a benefits package, you need to bring the awareness to your employee how much money you’re paying and what you’re paying it for.
My recommendation is to have a brief breakdown of exactly what they’re getting and how much it costs.
Because if they just think, “Oh, I just have this blanket policy, “there is no value attached. The value lies in knowing you provide something your competitor doesn’t offer. Or that they would be paying this sum out of their own pocket should they leave and start their own business.
Employees Stay for the Healthcare Benefits
Now, I personally know employees that work for companies just because of the benefits package. It is something they could not be able to afford on their own if they were to have to pay out of pocket for those benefits. So, give them a breakdown and let them know what you’re paying for. Let them know why you’re investing in them. Share with them how you value their service so much that you are willing to pay this extra fee.
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Resources For This Episode
Resources for Healthcare for Small Business
Shop BlueCross, Humana, United & More. Find Affordable Plans for Your Business.
Types: Health Insurance, Dental Insurance, Vision Insurance, Life Insurance
Health Insurance Coverage for Your Small Business.
Company Health Plans · Mid-Sized Business Plans · Small Business Plans · Group Employee Benefits
Types: Medical Plans, Life Plans, Vision Plans, Dental Plans
Get a Blue Cross Small Business Healthcare Plan. The Nation’s Top Carrier
Learn how to get health insurance for employees. Marketplace for Small Business, 50 employees or fewer. Small Business Health Options Program details.
Permissions To Share
Savvy Cleaner Training – House Cleaner Training and Certification
HouseCleaning360 – Referral database of the world’s most prominent home service providers and the homeowners they serve.
My Cleaning Connection – Your hub for all things cleaning.