TN 8 (02-11)

No one factor is controlling, as they are intended as guides to reach a reasonable conclusion. For domestic service cases, consider the following factors in light of all the circumstances.

A. Contractual relationship

An employment contract is required to establish an employer-employee relationship. Where the parties do not allege that a contract exists, develop all relevant circumstances to determine whether they reveal an employment agreement or understanding that the alleged employee was paid for the services performed. Parties usually reach an agreement by an exchange of letters or an oral agreement. In the rare instance where a formal written contract exists, examine it carefully to determine if it reflects the intent to establish an employment relationship.

B. Right to control

When a strong degree of trust exists (e.g., because of a relationship by blood or marriage), there is not always a need to exercise control and direct the domestic worker’s services. In such cases, carefully examine all of the facts to determine if they reflect the right of control or an actual exercise of such control. Evaluate the parties’ statements as to actual control exercised or the right of control in light of all of the facts.

C. Separate residence

When a worker performs domestic services at a separate residence, support the claim of an employment relationship when the domestic:

• does not live in the same household with the alleged employer, but comes there to perform the services; and

• did not live in the household until the need for services arose.

D. Joint ownership of home

The fact that the domestic worker and the alleged employer are joint owners or tenants of the home in which they live does not rule out that an employment relationship exists. However, in these circumstances, the worker may be performing domestic service in his or her own home for convenience. The question then is whether he or she is also performing services as an employee of the other owner or tenant. Joint ownership of the home in which the service is performed brings into question if there is the right to control.

E. Related work history

If the worker previously performed domestic services as an employee of another person or in some other capacity (e.g., as a homemaker), it lends credibility to the allegation that an employment relationship existed. However, in view of the nature of the work involved, the fact that the worker has not previously performed services of a similar nature should not be a factor pointing to the absence of an employment contract.

F. Duration and regularity of work

The fact that the services were performed services regularly and over a considerable period supports the allegation that the parties intended to create an employment relationship. Where the service performed relates to some episode in the life of a family, such as a temporary illness, preparing for a wedding, or the birth of a child, it is doubtful if a contractual employment arrangement exists.

G. Need for the services

The fact that there is a clear need for the domestic services in the household weighs heavily in the direction of a contractual employer-employee relationship. For example, such a need is evident where the alleged employee moves into the household to replace a domestic servant, to assume the duties of a disabled homemaker, or to care for children while the homemaker works.

The fact that a need for domestic service is not apparent from the family situation does not preclude a finding of employment. However, this fact indicates the need for complete development to determine if there was, in fact, an employment contract between the parties.

H. Claim for dependency

You must determine if the alleged payment is a gratuitous money allowance or wages for services as an employee. The fact that the alleged employer claims or has claimed the domestic as a dependent for income tax purposes raises a question that the amounts paid to the alleged employee may be an allowance or a gratuity. While this factor is not controlling, since an employer-employee relationship can exist and the claim for dependency can still be valid, it does point to the need to explore the actual intent of the parties further. Clarify to the parties that the same cash payment or payment-in-kind is not both a wage and a payment for support.

I. Character and rate of pay

The fact that the parties exchange monies does not establish that such monies constitute “wages.” A finding that wages were paid indicates that an employment relationship existed. Once we find that an employment relationship exists, we do not ordinarily question the amount of wages the alleged employer paid, unless such wages are clearly and significantly out of line with the prevailing rate of pay for similar services in the locality and the alleged employer does not meet the cash pay test.

J. Gratuitous services

Where a period that the worker performed gratuitous domestic service preceded the alleged domestic service in an employment relationship, develop as necessary to determine the circumstances under which the change in the arrangement between the parties occurred to establish whether the payments were “wages” for services in employment.

K. Sharing household expenses

The fact that the alleged employer paid cash for services for the period of the working relationship is evidence of an employment contract. Where the domestic worker contributes all or part of the cash for household expenses such as rent, groceries, property repairs, taxes, etc., or keeps the remaining cash of the allotment for these expenses, may be a basis to conclude that there was no employment contract.

L. Factors not relevant to employment determinations

The two factors that are often present that are not relevant to determine whether parties created an employer-employee relationship are motive and natural love and affection. If these two factors are present, it should alert FO’s and Processing Centers of the need to develop facts and carefully review the relationship between the parties.

1. Motive

There may be a clear sign that the purpose of the arrangement was to secure coverage, e.g., worker performed services for a period only long enough for the domestic to acquire insured status. The fact that the worker made the arrangement for such a purpose is not material to the finding that an employment relationship exists.

2. Natural love and affection

A family member may perform domestic services for money because of the natural love and affection between the family members. The family member may perform services without an understanding or agreement as to:

• the nature of the services;

• when and how to perform the services; and

• the amount of pay.

Under such circumstances, there is no employment relationship. However, the love and affection between family members does not preclude the fact that an employment relationship exists between them. The family member may render domestic service because of both love and affection and the existence of an employment contract.

M. Identity of employer involving relative cases

Husbands, wives, or other related parties, may pool their funds to share household expenses. However, irrespective of the source of funds to pay the domestic worker, the employer is the one who has the power to hire, dismiss, supervise, and control the worker. If both a husband and wife have such power, both are the employer, similar to partnerships where two or more partners are the employer.