RS 01901: Coverage and Exceptions
TN 22 (04-01)
Citations:
Section 210(a)(3) of the Act;
Regulation No.4, Sec. 404.1015 and 404.1038.
A. Policy -- spousal employment
1. After 1987
After 1987, service performed for, and paid by, a spouse is excluded from coverage if the service is:
not in the course of the employing spouse's trade or business, or
domestic service in a private home of the employing spouse.
2. 1940 through 1987
Service from 1940 through 1987 is excluded from coverage.
3. Before 1940
Service is not specifically excluded from coverage.
B. Policy -- child works for parent
1. After 1987
Service is not covered if performed by a child:
under age 18 in the employ of a parent; or
age 18 - 21 if the service is not in the course of the employer's trade or business or if it is domestic service in a private home of the employer.
NOTE: Service for a corporation is not considered family employment. The relationship of the employee to the stockholders, directors, and officers of the corporation is immaterial. However, the bona fides of such employment must be developed per RS 02101.000.
2. 1940-1987
Service by a child under 21 in the employ of a parent is not covered.
3. Before 1940
Service by a child for a parent is not specifically excluded from coverage.
C. Policy -- parent works for child
1. After 1960
a. General
Except as noted in RS 01901.250C.1.b., service performed after 1960 in the employ of a son or daughter not in the course of the employer's trade or business is excluded from coverage.
b. Domestic service after 1967
Domestic service is covered when performed by a parent in the private home of the employing son or daughter who:
has a son, daughter, step-son, or step-daughter in the home under age 18 or, if older than 18, whose mental or physical condition requires the care of an adult for at least four weeks (28 consecutive days) in the calendar quarter in which the service is performed; and
is a widow, widower, or a divorced person who has not remarried, or has a spouse living at home with a mental or physical condition that prevents him or her from caring for the child for at least four continuous weeks in the calendar quarter in which the service is performed.
NOTE: For the years 1961 through 1967 inclusive, domestic service by a parent in a private home of a son or daughter is excluded.
2. 1940 through 1960
Service is excluded from coverage when performed by a parent for a child.
3. Before 1940
Service is not specifically excluded from coverage.
D. Policy -- degree of family relationship
Family employment rules apply to:
foster or step-relationships (step-relationships are deemed to continue after the death of the natural parent); and
natural or adoptive relationships.
E. Policy -- service for a partnership
Generally, service for a partnership is not excluded from coverage as family employment. However, the exclusion applies if the service of the employee would be excluded as family employment because of the relationship of the employee to each partner in the partnership, such as a child under 18 working for a partnership of both parents.
F. Procedures
1. Family employment
When development is necessary, describe for the record the family relationship between the employer and employee.
When the employer is a partnership, or co-owners of realty or a business, identify the relationship between the employee and each of the partners or co-owners.
2. Nondomestic service by a parent for a child
When the service performed by a parent for a son or daughter is not nonbusiness labor and not domestic service performed in or about the private home of the child, develop in accordance with RS 02101.125.
3. Domestic service by a parent for a child
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When developing domestic service where the parent alleges the requirements in RS 01901.250C.1. are met or the FO has reason to believe the requirements may be met, establish:
the marital status of the son or daughter;
the age of the child and, if necessary,
the physical or mental condition of the spouse or child of the son or daughter; and
if the 4-week test is met.
NOTE: A statement of the child's marital status, age, or length of care, can be accepted in the absence of evidence to the contrary.
If the statement is questionable, obtain other corroborating evidence.
In all cases, development must establish that the spouse or child has a mental or physical condition to support the need for the parent's services.
G. Examples
1. Covered spousal employment
Mr. Ripken is a self-employed grocer. His wife is paid as the bookkeeper for the business. She has performed these services for many years. All remuneration paid for the wife's services after 12/31/87 is no longer excluded from employment and is covered for Social Security purposes.
2. Noncovered spousal employment
Mr. Brandon is a self-employed baker and president of a local bowling league. He pays his wife to prepare bowling statistics for the league. Although the work is performed in the bakery, the wife performs no services for the bakery. The wife's work for her husband is not covered employment because it is not service in her husband's trade or business.
3. Family domestic employment - length of work period
Mr. Palmeiro hired his mother to care for his children, all under age 18. His wife was physically unable to care for them from 9/12/99 to 10/20/99. Although the period involved is more than four weeks, it is not a four week period in the calendar quarter. Therefore, because the wife's physical condition did not prevent her from taking care of her children for four continuous weeks in a calendar quarter, the domestic service performed by Mr. Palmeiro's mother is not covered employment.
4. Family domestic employment - covered service
Mrs. Heller, an unremarried widow, hired her mother to care for her three children, all under age 18, in her home. The mother's work constitutes domestic service and is covered when performed in an employment relationship.