2023 Connecticut household employment tax and labor law guide - Care.com HomePay

2023 Connecticut household employment tax and labor law guide

Household employment requirements for families hiring a caregiver in Connecticut

Finding helpful Connecticut nanny tax information is not always easy. That’s why we’ve combined all the state and federal tax and labor law information you’ll need! Check out the information below that HomePay is here to help with.

Checklist for Connecticut  household employers

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 

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 Connecticut are required to have workers’ compensation insurance if their employee works more than 26 hours 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 

Connecticut law requires household employers to provide an employment contract and wage notice to their employee at the time of hire. The contract must include:

  • The employee’s hourly rate of pay.
  • The employee’s regular hours of employment.
  • That paydays will occur weekly.
  • Details regarding sick leave, vacation pay and any health benefits provided. 

Employment posters 

Families in Connecticut 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 rate in Connecticut is $14.00/hour.

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

Connecticut Public Health Emergency Leave

Families are required to provide up to 80 hours of paid leave to their employee if the governor of Connecticut  issues an emergency declaration. Employees can use their paid leave from the time the emergency declaration is made until up to 4 weeks after the declaration ends.

Paid family leave 

Household employees in Connecticut are eligible for paid family leave.

Family and medical leave

Household employers in Connecticut are required to provide their employee with up to 12 weeks of unpaid leave if they:

  • Give birth to a child or adopt a child;
  • Need to care for a family member with a serious health condition;
  • Have a serious health condition of their own;
  • Donate an organ or bone marrow.

Additionally, employees may take up to 2 more weeks of leave if there is a serious health condition resulting from a pregnancy. Families are required to hold their employee’s job while they are on unpaid leave. More information on this law can be found here.

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.  

Mileage reimbursements

The current federal mileage reimbursement rate is 65.5 cents per mile and only covers miles driven by your employee while on the job. Miles driven commuting are not eligible for reimbursement.

Ending employment 

Termination notice 

Household employers in Connecticut must provide their employee with a termination notice at the time of separation, regardless of the reason. 

Managing unused PTO 

Connecticut household employers do not need to pay their employees for unused sick time, but they must pay out unused vacation time unless their employment contract states otherwise.

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

Household employers are required to keep wage records on file for at least three years.

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