There are two ways a person can go into business, and that is either providing a good or providing a service. Based on two laws, the Food Safety Modernization Act and the Consumer Product Safety Improvement Act, it is potentially impossible for an individual to sell a product as a means of earning a living.
But there is no consistent regulation of providing services instead. The Institute for Justice has detailed many instances of local regulation regarding taxi service, interior decorating, or hair cutting. One area that has been ignored until now has been house cleaning or babysitting.
The state of California is now making an inroad on this means of augmenting a family budget - it has introduced Assembly Bill 889 that covers "persons who engage in specific types of domestic service." It leaves out those who provide health care through various state programs.
There are exemptions from those covered in the proposed law. Those under 18 are not covered by it, and family members who provide those services are not covered by it. This will not impact the income bondage of teenagers forbidden from earning a real living since it is unlikely they would ever earn much through babysitting, and so they are exempted. The bill requires extensive record keeping and benefits to accompany domestic employment and the fines are per violation per day so can quickly add up.
This will not impact the wealthy who hire domestic help, as they are capable of affording the paperwork that the bill demands. But a maid who works for several different middle class clients will find those clients have a hard time keeping up with the paperwork. It also creates a disincentive to do this without paperwork on the grounds that only the employer is liable and the employee is not. Therefore it sets the scene for a domestic employee to be able to turn around and threaten to report the employer unless unreasonable demands are met. Finally those who depend on babysitters will have a harder time having their needs met.
It is obvious who will be hurt by it; all who make money from babysitting or house cleaning, and those who depend on the services but are not wealthy enough to afford the employee paperwork. Who will benefit from it though? The bill sponsor claims that it is to protect domestic laborers, many of who are poor, minority, and even illegal aliens. That is not a politically powerful group. Who actually benefits from it?
House cleaning services, babysitting services, and day cares all benefit on the financial side. It will drive out the independent operator as those in the middle class who would hire domestic help will be forced to contract with the agency that handles the paperwork. On the political side the government will definitely benefit from more and more people being employed instead of self-employed and thus easier to track and record in accord with the war on home based businesses.