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Kentucky tax and labor law guide

Household employment requirements for families hiring a caregiver in Kentucky

The purpose of this guide is to give Kentucky families all the information they need to follow the federal and state household employment laws in their state. Check out the information below that HomePay is here to help with.

Checklist for Kentucky household employers

We know you’re busy! 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 

Workers’ compensation

Household employers in Kentucky are not required to carry a workers’ compensation insurance policy unless they have 2 or more employees each working more than 40 hours per week. We recommend families have a policy in place as they 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 posters

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

During employment 

Minimum wage rate

The current minimum wage in Kentucky is $7.25/hour.

Kentucky 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. 

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 $0.56 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 requirement

Household employers in Kentucky 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.

Managing unused PTO 

Kentucky household employers do not need to pay their employees for unused sick and/or vacation time.

The information contained in this article is general in nature, may not be applicable to your specific circumstances, and is not intended to be a substitute for or relied upon as personalized tax or legal advice.

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