In July 2024, the New Jersey Domestic Workers’ Bill of Rights Act will take effect, and will likely impact many who use or plan to use Medicaid. The law provides important protections for any domestic worker, including: babysitter, caregiver, companion, housekeeper, gardener, and organizer. All domestic employees (with limited exceptions for family members) are now included in anti-discrimination laws, wage and hour laws, and other labor protections. Employers are required to notify workers of their rights. Employers are also required to have a written agreement unless the worker works less than five hours per month.

We have always encouraged clients to work with home health agencies due to the training, bonding, and liability protection offered. However, many families choose to hire private caregivers directly, either to save money or because they want to hire someone they already know. This new law raises additional serious concerns for those considering employing individuals directly. Failure to adhere to the new rules can result in significant fines. In addition, we may find that the Medicaid agency will penalize any private arrangement that does not comply with all the requirements under the new rules. Individuals could be sued for failure to meet wage and hours laws including failure to provide adequate notice for termination (four weeks for live-in positions).

A written contract, which will now be required, was always advisable to ensure that the arrangement was not questioned by the Medicaid agency and that payments are not considered gifts or unexplained transfers. This law adds specific guidelines for the contract, including that it must be in the employee’s native language. It must also address the following:

• Schedule and duties,
• Wage (base and overtime),
• Payment method,
• Daily breaks,
• Personal and sleeping time,
• Value of housing if provided,
• Holiday, leave, and sick time, and
• Transportation requirements.

Individuals considering hiring private caregivers or other domestic workers are urged to seek counsel to ensure that their arrangements do not violate the new law and, if potentially relevant, the Medicaid rules.