On January 12, 2024, Governor Phil Murphy signed the Domestic Workers’ Bill of Rights (S723) into law, representing a landmark victory for labor rights groups across the state. The new law, effective July 2024, extends labor rights including, but not limited to, mandatory minimum wage, paid sick leave, and protections against unlawful termination, to over 50,000 domestic workers, many of whom have historically been excluded from state and federal labor laws.

Defining Domestic Workers

The new Domestic Workers’ Bill of Rights defines ‘domestic workers’ as hourly and salaried employees, independent contractors, full and part-time workers, and temporary workers who are employed in a residence caring for a child, serving as a companion or caretaker for a sick, convalescing, elderly, or disabled person, housekeeping, cooking, providing food or butler services, cleaning laundry, gardening, or for any other domestic service purpose.

Exclusions and Protections for Domestic Workers

However, the new Bill of Rights does not apply to individuals providing care and related services to immediate family members, as well as home health aides paid through Medicare and/or Medicaid’s Personal Preference Program (“PPP”). Despite these exclusions, there are several options available to protect the interests of both caregiver and loved one alike. For example, a “care contract” can be utilized to specify the services to be rendered by a caregiver, as well as their hourly rate, holidays, paid time off, etc. Written care contracts are especially important for those applying (or intending to apply) for Medicaid or other means-tested benefits in the future because of Medicaid’s rebuttable presumption that care provided by a family member is performed out of love and affection (for free) in the absence of a pre-existing, written agreement. This presumption sometimes results in the inadvertent imposition of a transfer (gift) penalty when payments were made to a family member/caregiver without a formal agreement in place.