Hiring a Cleaning Company: Know the Facts
Knowing all of the legal facts before hiring someone to clean your home can be overwhelming, which is why MaidPro handles them so you don’t have to. But not all cleaning companies follow the rules, so we put together a list for you to follow to keep you safe.
If you pay more than $17,00 per year to an independent housecleaner, you must sign up for an Employer ID Number with the IRS. You are required to pay Social Security and Medicare (also known as FICA) and Federal Unemployment Tax. You may also be liable for Federal Income Tax withholding, state taxes and disability taxes. These taxes become part of your personal tax liability and must be reported on your Form 1040. Penalties for non-payment include interest penalties and fines. For the entire list of forms to be completed, see this page on the IRS website.
You must verify that the person is legally allowed to work in the United States by having them complete the I-9 Employment Eligibility Verification form. Penalties for hiring illegal aliens range from $250 to $10,000. You should keep a signed W-4 form on file for each employee and you may also want to keep a photocopy of each employee's Social Security card. For the entire list of forms to be completed, see this page on the IRS website.
Make sure that your homeowners' insurance includes a liability clause in case your employee gets injured at your home. At least $300,000 in liability protection is recommended, but up to $1 million in an umbrella or excess liability policy may be needed to protect you. You also may be liable for workers' compensation payments that would not be covered by your homeowner's insurance. See this page for workers compensation laws in your state.