Federal Bill Mandates Overtime Pay, Written Contracts, and Sick Leave for Nannies and Caregivers

The new Domestic Workers Bill of Rights Act is a massive overhaul of labor law aimed squarely at the 2.2 million people who work in private homes—nannies, housekeepers, and personal care aides. The bill’s main purpose is to pull domestic workers out of a historical loophole that excluded them from many basic federal protections, specifically by amending the Fair Labor Standards Act and adding entirely new rights.

Overtime Pay and the End of the Live-In Loophole

For anyone who employs a live-in worker, this is the biggest change. Historically, federal law allowed employers to skip paying overtime to staff who lived in their home. Section 101 of this Act explicitly repeals that exemption, meaning live-in domestic employees must now be paid time-and-a-half for any hours worked over 40 in a week. This provision alone is a game-changer for financial stability in a sector where wages are already low. For employers, this means calculating and tracking hours for live-in staff just got a lot more complicated, requiring careful record-keeping to avoid serious wage violations.

The Mandatory Contract: Clarity for Everyone

If you employ someone for at least 8 hours a week, Section 110 mandates a detailed, written employment agreement. Think of this as the new foundation for the job. This contract must spell out everything: the exact hourly wage and overtime rate, the pay schedule, safety procedures, and most importantly, the schedule and how much notice is required for changes. The bill requires the agreement to be in a plain language the employee understands, and it can’t contain restrictive clauses like pre-dispute arbitration or non-compete agreements. This provision cuts down on the wage theft and ambiguity that plagues informal arrangements, but it puts a significant administrative load on individual employers who now must function like small HR departments.

Guaranteed Time Off: Sick Days and Scheduling Predictability

Under Section 111, domestic employees will earn at least 1 hour of paid sick time for every 30 hours worked, up to 56 hours per year. This time can be used for personal illness, caring for a family member, or seeking services related to domestic violence or sexual assault (Safe Time). Crucially, this time rolls over year-to-year, and employers cannot require the worker to find a replacement as a condition for taking the leave. This means a caregiver no longer has to choose between working sick and losing a day’s pay.

Section 112 tackles scheduling. Employers must give written notice of scheduled hours at least 72 hours in advance. If an employer cancels a shift with less than 72 hours' notice, they must pay the employee half their regular rate for the missed hours. If the cancellation happens after the employee shows up, they must be paid for the full shift. This aims to stabilize income for workers who often face last-minute cancellations, though the bill does carve out exceptions for natural disasters or medical emergencies involving the person being cared for.

Protections for Live-In Staff and Caregivers

For live-in employees, the bill adds specific requirements around termination and privacy (Section 102 and Section 114). If you fire a live-in worker, you must give them 48 hours’ written notice and either 30 days of lodging or two weeks of severance pay. This prevents workers from being rendered instantly homeless. However, there’s an exception: if the employer believes the worker engaged in abuse or harmful conduct, they can skip the lodging/severance, provided they document the allegation in writing. On the privacy front, employers are explicitly forbidden from recording or monitoring employees in their private living quarters, bathrooms, or while dressing, though they can set “reasonable limits” on private communications if it interferes with job duties—a potentially vague standard that could lead to disputes.

The Medicaid Conundrum and Enforcement

The bill recognizes that many personal care aides are paid through Medicaid programs. Section 307 requires the Secretaries of Labor and HHS to create rules ensuring these Medicaid-funded workers receive the new protections. Importantly, the bill tries to protect the budgets of disabled individuals who self-direct their care, stating that states cannot force them to use their personal care budget to cover the costs of these new worker rights. To help states manage the increased labor costs, Title IV provides a temporary five-year boost in federal Medicaid funding (FMAP).

Finally, the bill creates a Domestic Employee Standards Board (Section 201) to recommend future standards, and sets up a national hotline and grant programs to educate workers and employers. Employees who feel their rights have been violated can sue the employer directly, and if an employer retaliates against a worker within 90 days of the worker asserting a right, the law automatically presumes the retaliation was illegal (Section 117). This shifts the burden of proof heavily onto the employer, ensuring that workers feel safe enough to assert their newfound rights.