Caregiver Laws in California: Wages, Breaks, and Payroll Taxes

Caregiver laws in California treat almost every in-home caregiver as an employee, not an independent contractor, and that single fact drives everything else: a $16.90 statewide minimum wage as of January 1, 2026, overtime after set daily and weekly hours, paid sick leave, workers’ compensation coverage, and payroll taxes owed by the family or agency doing the hiring. Getting any of these wrong exposes the employer to back-pay claims, tax penalties, and in the case of workers’ compensation, criminal liability.

Employee or Independent Contractor

California uses the ABC test, adopted by the state Supreme Court in Dynamex Operations West, Inc. v. Superior Court (2018) and codified through Assembly Bill 5. A worker is presumed to be an employee unless the hiring party can prove all three: the worker is free from control over how the work is done, the work falls outside the hiring entity’s usual business, and the worker runs an independently established operation of the same kind.¹

Most caregivers fail at least one prong. A home care agency’s whole business is caregiving, so an agency worker plainly performs work within the agency’s usual course of business. A family that sets the schedule, assigns duties, or dictates how care happens controls the “how,” which also points to employment. The Division of Labor Standards Enforcement actively pursues misclassification. In early 2025, one in-home care company was cited $2.3 million for calling its caregivers independent contractors.²

California also recognizes a narrower category called a “personal attendant”: someone employed by a private household or healthcare-industry employer to supervise, feed, or dress a child or a person who needs help because of age, physical disability, or mental impairment, and who spends most of their time on those tasks.³ Personal attendants are still employees. They just follow a different overtime schedule.

Minimum Wage and Overtime

California’s statewide minimum wage is $16.90 per hour as of January 1, 2026, and applies to all employers regardless of size.⁴ Many cities and counties set higher local rates. Whichever rate is higher is the one the caregiver must be paid.

Overtime depends on which bucket the caregiver falls into.

Non-Live-In Domestic Workers Who Are Not Personal Attendants

Standard California overtime applies: time-and-a-half past eight hours in a day or 40 in a week, and double time past 12 hours in a day. The first eight hours on the seventh consecutive workday are also at time-and-a-half, with double time after that.³

Personal Attendants

Overtime starts after nine hours in a workday or 45 hours in a workweek rather than the standard eight and 40.³ This surprises a lot of household employers who assume all caregivers share the same threshold.

Live-In Domestic Workers

Live-in caregivers who are not personal attendants earn overtime after nine hours in a day, time-and-a-half for the first nine hours on the sixth and seventh consecutive workday, and double time beyond nine hours on those days.³ Living in the employer’s home does not erase overtime rights. It only shifts when the premium starts.

Federal law adds a floor, not a ceiling. The U.S. Department of Labor narrowed its “companionship services” exemption in 2015 so most home care workers now qualify for federal minimum wage and overtime.⁵ A caregiver whose duties are limited to fellowship and protection, with any hands-on care under 20 percent of weekly hours, may still be federally exempt, but that is a narrow window.⁶ California’s protections take precedence wherever they are stronger.

Breaks and Paid Sick Leave

Non-exempt caregivers who work more than five hours in a shift get a 30-minute unpaid meal break. If the shift is six hours or shorter, the caregiver and employer can agree in writing to waive it. A second 30-minute meal break is required past 10 hours.⁷

The caregiver must be completely free of duties during the break. If the nature of the work genuinely prevents stepping away, which is common when a dependent person cannot be left alone, an on-duty meal period is allowed only when the caregiver signs a written agreement stating they can revoke it at any time. On-duty meal periods are paid.⁷

Rest breaks run 10 paid minutes for every four hours worked, scheduled as close to the middle of the work period as practical. When the employer prevents a rest break, the caregiver is owed an extra hour of pay at the regular rate for each one missed.

California also requires at least 40 hours, or five days, of paid sick leave per year for most workers, including caregivers who have worked for the same employer at least 30 days in a year and finished a 90-day employment period.⁸ Household employers often skip this. It applies to them anyway. A caregiver can use the leave for their own illness or to care for a family member.

Workers’ Compensation

Every California employer must carry workers’ compensation insurance, including a family that hires one caregiver for the household.⁹ There is no minimum employee count and no hours threshold.

Going without coverage is a misdemeanor. A first conviction carries up to one year in county jail and a fine of at least $10,000, which can climb to double the premium that should have been paid. A second or subsequent conviction raises the minimum fine to $50,000 and up to triple the unpaid premium.¹⁰

A caregiver injured on the job should report the injury to the employer as soon as possible. If the employer does not learn about it within 30 days and that delay blocks a full investigation, the caregiver can lose benefit rights.¹¹ Back strains from lifting, slips and falls, and exposure to illness are the common claims. The insurance carrier handles medical treatment, temporary disability payments, and compensation for lasting impairment.

Payroll Taxes When a Family Hires Directly

Families who hire caregivers themselves become household employers. The federal and state thresholds are low enough that most arrangements cross them, and the IRS or Employment Development Department tends to be the first to notice.

Federal

Pay a household caregiver $3,000 or more in cash wages during 2026 and you must withhold and pay Social Security and Medicare taxes. Each side owes 6.2 percent for Social Security (on wages up to $184,500) and 1.45 percent for Medicare, with no cap on the Medicare portion.¹²

Federal unemployment tax is separate. If you pay $1,000 or more in total cash wages to household employees in any calendar quarter of 2025 or 2026, you owe FUTA at 6.0 percent on the first $7,000 of each employee’s wages. Most employers qualify for a credit that cuts the effective rate to 0.6 percent.¹²

You report these on Schedule H, attached to your personal Form 1040, and must issue the caregiver a W-2 by January 31 of the following year.¹³ Withholding federal income tax from the caregiver’s pay is optional unless the caregiver asks for it. Social Security and Medicare withholding is not optional once the $3,000 threshold is met.

Wages paid to your spouse, your child under 21, or your parent generally do not count toward these thresholds.¹²

California

Pay $750 or more in cash wages in a single calendar quarter to household employees and you must register with the Employment Development Department as a household employer. Once registered, you owe state unemployment insurance at 3.4 percent for new employers and must withhold State Disability Insurance from the caregiver’s wages at 1.2 percent. SDI funds both disability benefits and Paid Family Leave.¹⁴

Paying under the table is where this falls apart. The employer gets penalties from the IRS and EDD, and the caregiver loses Social Security credits, unemployment eligibility, and disability coverage.

Background Checks, I-9, and Training

Caregivers hired by licensed home care organizations must pass a background check under the Home Care Services Consumer Protection Act, including fingerprinting through the California Department of Justice and screening for disqualifying offenses like violent crimes and elder abuse.¹⁵ A disqualifying conviction bars agency work unless the California Department of Social Services grants an exemption based on evidence of rehabilitation.

Private households are not legally required to run a background check, but it is strongly advisable. If you use a third-party screening company, federal law adds procedure. You must give the caregiver a written disclosure, in a standalone document, that you plan to use a background report for employment decisions, and you need the caregiver’s written permission before ordering it. If you decide not to hire based on what the report shows, you must follow an adverse-action process that includes giving the applicant a copy of the report and a notice of their rights before the decision is final.

Household employers must also complete Form I-9 for any caregiver working on a regular basis for wages. An I-9 is not needed for sporadic or intermittent work, or when a staffing agency handles verification.¹⁶ Keep the completed I-9 for three years after the hire date or one year after employment ends, whichever is later.¹⁷ Federal penalties for knowingly hiring an unauthorized worker run $250 to $2,000 per worker for a first offense, climbing to $3,000 to $10,000 for repeat violations. Paperwork violations for failing to properly complete or retain the I-9 carry separate fines of $100 to $1,000 per form.¹⁸

Caregivers at licensed home care organizations must also complete at least five hours of initial training within 30 days of starting: two hours of orientation on agency rules and three hours on safety and infection control.¹⁵¹⁹²⁰

Pay Stubs and Records

California Labor Code section 226 requires employers to give an itemized wage statement with each paycheck showing total hours worked, pay rates, overtime calculations, and all deductions. Keep those records for at least three years and make them available to the employee on request.²¹

The penalty for knowingly failing to provide accurate wage statements is up to $4,000 per employee in aggregate: $50 for the first pay period with a violation, $100 per pay period after that, plus the employee can recover actual damages and attorney’s fees.²¹

Hold on to employment agreements, tax withholding records, and I-9 forms too. The EDD and DLSE can audit at any time, and missing documentation is usually what turns a routine inquiry into a serious enforcement action.

1
Franchise Tax Board. Worker Classification and AB 5 Frequently Asked Questions
2
California Department of Industrial Relations. Division of Labor Standards Enforcement – Home Page
3
California Department of Industrial Relations. The Domestic Worker Bill of Rights – Frequently Asked Questions
4
California Department of Industrial Relations. Minimum Wage
5
U.S. Department of Labor. Domestic Service Final Rule Frequently Asked Questions
6
U.S. Department of Labor. Fact Sheet 79A – Companionship Services Under the FLSA
7
California Department of Industrial Relations. Meal Periods
8
California Department of Industrial Relations. Paid Sick Leave in California
9
California Department of Industrial Relations. Workers’ Compensation Insurance FAQ
10
California Legislative Information. California Labor Code 3700.5
11
California Department of Industrial Relations. DWC – I Was Injured at Work
12
Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
13
Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees
14
California Employment Development Department. Household Employer’s Guide
15
California Department of Social Services. Laws and Policies
16
U.S. Citizenship and Immigration Services. Domestic Workers
17
U.S. Citizenship and Immigration Services. 10.0 Retaining Form I-9
18
Office of the Law Revision Counsel. 8 USC 1324a – Unlawful Employment of Aliens
19
California Department of Public Health. Nurse Assistant Training Program Applicants
20
California Department of Public Health. Certified Nurse Assistant
21
California Legislative Information. California Code LAB 226 – Wage Statements