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HomeWork Solutions Inc. is the leading authority on household payroll and taxes - the  "Nanny Taxes." Since 1993 HWS has assisted tens of thousands of household employers with their payroll and tax compliance for their nanny, housekeeper, senior caregivers and other household employees.

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Kathleen Webb Household Payroll Authority

Kathleen Webb, the President and co-founder of HomeWork Solutions Inc. has worked with nanny employers to simplify Nanny Payroll and Nanny Tax Compliance since 1993.

Ms. Webb periodically updates household employers and nannies alike on issues related to household employment.

View Kathleen (Kathy) Webb (kathy@4nannytaxes.com)'s profile on LinkedIn

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INA Nanny Salary and Benefits Survey

 

International Nanny Association Nanny Salary SurveyThe International Nanny Association is conducting it’s 2014 Salary & Benefits Survey  now!  This survey collects valuable industry benchmarking information which helps both families and nannies.  If you are a nanny or nanny/ household manager, please take a few moments and take this survey.   The responses are confidential, but the results will be gathered and shared with the public. National and international media also reference the INA Salary Surveys.

Do you employ a nanny or a nanny/ household manager? Please share this survey with your employee.

Do you operate a nanny referral agency? Please take a few moments and  share this survey with your nannies via email and your social channels!

Thank you in advance for your participation. Families often ask the HWS team for information about nanny salaries and benefits, and we know this data is beneficial to all.

How a Nanny Addresses Pay on the Books with a Family

 

LegalNannyPayrollI recently attended Nannypalooza in Philadelphia where I was asked by a nanny in attendance if I could coach her on how to speak to her employer about being paid on the books. Immediately several other nannies joined the conversation, sharing that this is one of the most difficult conversations to initiate with their employers.

Clearly it is optimal to have this conversation early, as part of the nanny job interview. The reality is, however, that many nannies NEED the job they are interviewing for and are hesitant to raise an issue that could derail the job opportunity. How does a nanny who accepted a job paying cash under the table convince her employer that legal payroll is important to her?

#1 Recognize and acknowledge that the conversation is about money...

The fact is that legal nanny pay on the books costs both the employer and the employee money. The employer will be obligated to pay approximately 10% more in employer taxes - a significant amount in many families budgets. Often the amount the family pays the nanny exceeds the amount they pay for their mortgage or rent! The nanny pays taxes too - the family is entitled to collect 7.65% from the nanny's pay for their share of Social Security and Medicare taxes, and the nanny ultimately owes any income taxes that may be due.

It isn't all money out the window though! By paying legally on the books the family may be entitled to important tax breaks. These tax breaks typically offset 50 - 100% of the family's employer taxes, making this an easier decision for the family. The nanny too can qualify for tax benefits too - most importantly government subsidies for health insurance and potential eligibility for the Earned Income Tax Credit (EITC), a refundable tax credit for low income wage earners. In 2012, the average EITC was $2300 - often more than the total of deducted Social Security taxes and income taxes combined!

#2 Be clear that this is the right thing to do...

As Oliver Wendell Holmes Jr. so famously opined, "Taxes are the price we pay for a civilized society." No one actually likes paying taxes, yet without everyone paying their fair share, important social programs such as unemployment insurance and Social Security retirement benefits are not funded.

A nanny can begin by acknowledging that her employer wants to do the right thing. Often nannies and families both think by paying cash under the table the nanny receives more pay in her pocket. While this undeniably may be true and in the nanny's short term best interests, in the longer term the nanny may suffer and the family may put themselves at risk. How? All nanny jobs end, usually after a few years, because the children grow and the families needs change. Full time childcare evolves into part-time after school care, and the full time nanny is no longer needed. A nanny may not find a new job right away, and at that time legal unemployment benefits may be the only thing that allows the nanny to pay her rent or make her car payments. After the job ends, you may have to file for unemployment benefits to tide you over, an action that blows the whistle on both you and your former employer. Paying a bit now, and taking home a bit less every week is not ideal, but it will offer both you and your employer longer term benefits.

#3 Be a partner in the solution...

Remember, this conversation is about money! You can help your employer make the right decision by:

  • Indicate early in the conversation that you know they will have to start deducting taxes from your check, and you are okay with that.
  • Help the family understand what their obligations are. You can download HWS' free Guide to Household Payroll and share with your employer.

Did you know?

HomeWork Solutions provides free telephone consultations and we are delighted to help employers understand the rules, costs and how we can help make nanny tax compliance easy and affordable to them.

Nannies, Tips for YourFinancial Health

2015: Changes in Senior Care Payroll

 

Department of Labor Discusses Joint Employment, Changes in the Senior Caregiver Companionship Exemption and Announces Increased Enforcement

The Private Care Association, the voice of private duty home care, met in earlier this month in Orlando, FL and invited the US Department of Labor to discuss Joint Employment and Changes in the Companionship Exemption with its members. A guest appearance was made by Michael Hancock, Assistant Administrator for Policy, Wage and Hour Division of the U.S. Department of Labor and Melissa Murphy, Senior Attorney, Office of the Solicitor U.S. Department of Labor.  Mr. Hancock and Ms. Murphy addressed an anxious crowd of almost 200 independent homecare staffing agencies to discus joint employment, the expiration of the Companionship Exemption for home health agencies and stepped up enforcement by the DOL in 2015 related to the enforcement of the Fair Labor and Standards Act (FLSA).

The US DOL acknowledged that the senior care industry is subject to increased enforcement, and warned that many current industry practices place the senior care referral agencies and their clients at risk.

The Companionship Exemption:

Companionship Exemption Senior CaregiverThe federal Fair Labor Standards Act (FLSA) was amended in 1974 to specifically include domestic service workers. At that time, companions to the aged and infirm were the only domestic service workers who were exempted from the FLSA's minimun wage and overtime rules.

Effective January 1, 2015, the exemption officially end for home healthcare agencies that directly employ their caregivers. Families who privately employ caregivers may still qualify for a more limited companionship exemption and be exempt from the requirement to pay overtime and minimum wage.

To qualify, the privately employed caregiver's scope of duties must meet the new definition of a companion. Companionship services are defined as services that provide fellowship and protection to an elderly or disabled person.  Activities such as assisting with a puzzle or game or engaging the senior in casual conversation over a meal are examples of companionship activities.  In order to qualify for the companionship exemption a caregiver may not engage in any general housekeeping activities and may not spend more than 20% of their time providing personal care services, often known as Activities of Daily Living (ADLs), such as dressing, grooming, feeding, bathing, toileting and transferring; and Instrumental Activities of Daily Living (IADLs) which are tasks that enable a person to live independently at home, such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medications, and arranging medical care.

While the law changes on January 1, 2015, the Department of Labor has recently granted a 6 month stay of enforcement to allow homecare agencies and Medicaid programs ample opportunity to make necessary operational adjustments. Employers still run the risk of being separately sued by caregivers, as the law is still in effect.

Joint Employment

These changes coupled with increased enforcement from the DOL outline the increased need for home health referral agencies to ensure they are not acting as joint employers of caregivers. The US DOL stressed the need for referral agencies to clearly define to care recipients, families and caregivers that the families are the employers of the caregivers that they hire through their referral agency. 

Joint employment is the sharing of control and supervision of an employee's activity among two or more business entities.  This is often a hot topic among homecare referral agencies that do not employ their own caregivers because certain activities could cause the referral agency to be jointly responsible for overtime payments, FICA and federal and state unemployment taxes if 1) the proper employment taxes are not paid by the care recipient and 2) they are deemed a joint employer of a caregiver.

As Mr. Hancock and Ms. Murphy discussed, Joint employment is determined by applying the "economic realities" test, which examines a number of factors to determine whether a worker is economically dependent on an employer, thus creating an employment relationship.  Ultimately joint employment is decided by the courts based on economic dependence; however, the DOL has outlined the following factors the courts look at when making a determination of joint employment. 

  • whether a possible employer has the power to direct, control, or supervise the worker(s) or the work performed;
  • whether a possible employer has the power to hire or fire, modify the employment conditions or determine the pay rates or the methods of wage payment for the worker(s);
  • the degree of permanency and duration of the relationship;
  • where the work is performed and whether the tasks performed require special skills;
  • whether the work performed is an integral part of the overall business operation;
  • whether a possible employer undertakes responsibilities in relation to the worker(s) which are commonly performed by employers;
  • whose equipment is used; and
  • who performs payroll and similar functions.

HomeWork Solutions partners with senior care referral agencies nationwide to provide payroll and tax services to their client families who employ in-home senior caregivers. HWS' eldercare payroll services simplify payroll and tax compliance for the families, allowing family members to focus on focus on activities that more directly benefit their aging loved ones. Give us a call if you would like to learn more at 800.626.4829 or request a free telephone consultation.

 

FAMILY GUIDE TO SENIOR CARE ALTERNATIVES

 

 

New York City Paid Sick Leave Law for Household Employees

 

(October 1, 2014)

New York City's Paid Sick Leave Law DOES cover household employees. The coverage, however, is a bit different than for workers employed by commercial or public enterprises.


NYC Paid Sick Leave LawHousehold employees who have worked for the same employer for at least one year and who work more than 80 hours a calendar year earn
 two days of paid sick leave under New York City law. The two days of annual sick leave become available at the one-year anniversary of employment.  This applies to all household employees who work in NYC, regardless of where they live. The NYC-mandated sick leave is in addition to the three days of paid rest to which domestic workers are entitled under the New York State Domestic Workers Bill of Rights.

Household employers that already provide at least five days of any kind of paid time off (i.e., personal days, vacation and sick leave) would not be required to provide any additional sick time, either paid or unpaid, under the law.

Who is a household employee? 
New York State Law defines "domestic worker" (household employee) as someone who works in another person's home. A domestic worker's job include:

  • Caring for children or a sick or elderly person
  • Housekeeping chores
  • Other domestic duties performed in the employers' home

This law does not cover household workers who:

  • Work on a casual basis, such as part-time baby-sitters in the homes of their employers and work less than 80 hours in a calendar year
  • Are relatives of their employers or of the person(s) for whom they offer care

Upon termination of employment, the household employer is not required to pay the departing household employee for unused sick leave.  Employers can either pay out accrued but unused sick leave to their household employees annually or  permit employees to carry over accrued sick leave from year to year, up to a maximum of 2 days.

Example: A household employee has been employed for two years. In the second year of employement, the household employee was entitled to two days of paid sick leave. The employee used one day in the year. The employer may either pay out the additional day at the second anniversary date of employment, or credit the household worker with three days of paid sick leave in the coming year. 

How much does an employer have to pay an employee for paid sick leave? 
An employer must pay the employee the employee’s regular hourly rate at the time the sick leave is taken. Employees cannot be paid less than the full minimum hourly wage set by New York State law. As of December 31, 2013, the New York State minimum wage is $8 per hour. It will increase to $8.75 per hour on December 31, 2014 and to $9 per hour on December 31, 2015. 

Example: A household employee is regularly scheduled to work ten hours in the day. The household employee is ill and entitled to paid sick leave. The household employee must be paid for that day's regularly scheduled hours at her regular rate of pay.

What is the effective date for household employees? 
Household employees who began working for an employer on April 1, 2014 or earlier will accrue their first two days of paid sick leave on the latter of August 1, 2014 or their one year anniversary. 

10 Tips from the Best Nanny Industry Insiders About Nanny Job Satisfaction

 

Nanny Job SatisfactionWhen families hire a nanny, they enter the relationship with the best of intentions to establish a mutually rewarding long term relationship between the nanny and the family. You have gone to a lot of effort to locate this nanny, what actions can you take as the nanny employer to insure your mutual satisfaction? What are the keys to nanny job satisfaction?

HomeWork Solutions consulted with the most successful nanny recruiters and this is what they told us:

  1. Remember to acknowledge good performance! Katie Provinziano, owner of Westside Nannies, Los Angeles advises "A simple "thank you" goes a long way. Everyone loves a little positive affirmation and nannies are no different. Just because it's someone's "job" doesn't mean that we shouldn't acknowledge and appreciate their work. Give your nanny positive feedback and let her know when she's doing a great job or exceeding your expectations. Combining that "thank you" with a free massage or gift card to her favorite restaurant for a job well done will go a long way in employee satisfaction!"
  2. Document the nanny job details. "A nanny work agreement that precisely spells out the compensation, benefits, job description and specific household rules related to security, social media and confidentiality is a vital tool for both the family and the nanny to avoid misunderstanding and conflict in the relationship," advises HomeWork Solutions' Kathleen Webb. 
  3. Take the nanny employment relationship seriously and treat your nanny with respect. "Your nanny deserves to be treated as your peer, an equal. She plays a critical role in your household, a role that allows you to pursue other important interests secure in the knowledge that your children are in a safe and nurturing environment," advises Annie Davis, founder of Annie's Nannies in Seattle.
  4. Keep the nanny employment relationship professional. "Having an employee who works in your home can often be a slippery slope and you can fall from professional to too familiar very easily," suggests Katie Provinziano, owner of Westside Nannies, Los Angeles. "Refrain from asking your nanny about her latest date and, at the same time, don't over-share about your mother-in-law. If you wouldn't say it to a peer at work don't say it to your nanny. Keep the relationship warm, friendly, and professional - but don't overstep your boundaries."
  5. Respect working hours and relieve the nanny on time. "As an agency owner, working mom and nanny employer, I know as well as anyone how hard it is to be home on time. In the three years my nanny has worked for me, there have certainly been days when a timely arrival it's just not possible--I'm late, I call, and she understands--but I always try," share's Jami Dennis of ABC Nannies in Denver. "Being timely is respectful. Like any employee, it's important your nanny knows you that respect them, you respect their time, and you respect what they are contributing to your family. Treating your nanny with kindness, gratitude and a healthy dose of respect will go a long ways to ensure they are satisfied in their position for years to come."
  6. Always pay the nanny on time. "You wouldn't be happy if you had to remind your employer that today is payday, or if your employer forgot to pay you for your overtime," suggests HomeWork Solutions' Kathleen Webb. "Nannies particularly appreciate when the family uses a nanny payroll company with direct deposit payroll, as they don't need to run to the bank after you get home from work on Fridays to deposit the paycheck."
  7. Avoid micromanagement. "In any family/nanny employment relationship, there must be some flexibility and autonomy in order to foster a good long-term working environment," advises Marc Lenes, Placement Manager, Wee Care Nanny Agency, Stamford CT. "If you have an excellent nanny that is experienced, loving, proactive, reliable, trustworthy, etc., remember the adage, "one should not lose sight of the forest for the trees."
  8. Pre-fund a household petty cash jar, or provide your nanny a family credit card. Michael Girard, owner of Childcare Solutions, Beachwood, OH cautions "No wage earning employee should ever be expected to finance the costs of working for their employer. That goes double for wage earners who generally live from pay-check to paycheck to pay their own bills. You trust your nanny with your children – trust them with a check card or credit card to use to pay for the things you want them to purchase, whether it’s meals, groceries, activities or gas for the car they use to transport your kids. If you can’t provide a check card, make sure you leave them enough cash to cover all anticipated expenses – as well as the unanticipated things that tend to come up in the course of a week. Be sure to detail your expectations and agreements regarding expense in your work agreement so that there is no confusion and there are no misunderstandings."
    “I cared for my last employers three active children for a year and I loved both the kids and the parents. But I declined to renew my employment with them beyond the first year because every week it was humiliating to have to ask for reimbursement for the cash I had to pay to cover their child care expenses. They were always late in returning my own money to me – and I often had to argue about the reimbursement amount. Even getting reimbursed a fair amount for the use of my car and gas became a problem. I was very sad to have to leave the position but I needed to move on to a family that respected me more.” – Christina H.
  9. Give direction! "We have found that the family/nanny relationships that last the longest are those with consistent and honest communication," Mom's Best Friend's Kim Winblood, Vice President (Dallas/Ft. Worth TX), reports.  "The "daily download" is essential and should not be overlooked as it keeps both the parent and nanny accountable for realistic expectations and any correction that might be needed.  In addition, at a minimum, quarterly and annual meetings should be on the calendar to discuss any adjustments needed due to the child’s growth or other factors that might have an effect on the initial job description.  Nannies value and appreciate relationships with open communication."
  10. Maintain realistic expectations! ABC Nannies' Jami Dennis (Denver) advises "While you may feel like you've hired a Super Nanny, it's important to be realistic when it comes to what needs to be accomplished in a day. As a parent, if you couldn't get through the to-do list in 8 hours, it's unfair to expect your nanny to be able to do so. My advice, as a working mom with a full-time nanny, is to prioritize what's most important, show appreciation when your nanny does more than expected, and be realistic about what can be done in any given day."

     

A special thank you to the wonderful industry experts who have contributed to this post. These individuals have all assisted hundreds, if not thousands, of families in their careers and truly know what works and what doesn't. If you are searching for a nanny and want expert advice and guidance, HomeWork Solutions' recommends agencies who belong to the International Nanny Association or the APNA, industry professional associations that require members to adhere to a transparent code of conduct. These agencies are the crème de la crème and cannot be matched by do-it-yourself online options.

6 Things About Household Payroll Tax Every Caregiver Should Know

 

Payroll Literacy for household employeesNannies and senior caregivers who work in a private home, receive instructions and directions from the family employer and are paid by the family (either directly or via a household payroll company) are employees in the eyes of the IRS and US Department of Labor. As employees, many aspects of compensation and payroll are governed by payroll and labor law, no different than employees in a department store, factory or othr workplaces. Tax and labor law that covers household employees are often unique, and all too often neither the family nor the caregiver know the important details. Household payroll literacy on the part of a nanny or senior caregiver is important as they negotiate pay and benefits with their employers, many of whom don't understand these key points themselves.

  1. Employees receive a W-2 form at the end of the year, not a 1099 form. This is important! 1099 Independent Contractors pay 100% of their own taxes; employees are issued a W-2 form and the employee and employer both contribute to the taxes.
  2. There is a distinction between payroll taxes and income taxes. Payroll taxes include Social Security, Medicare and unemployment taxes, and are an employer responsibility. Social Security and Medicare are shared taxes; the household employer may deduct 7.65% from the nanny caregiver's paycheck to fund the employee portion, and the employer will match this amount and must send the entire tax (15.3%) to the IRS. Unemployment taxes are totally paid by the household employer. Income taxes are ultimately the nanny caregiver's responsibility; the household employer may agree to deduct income taxes for the nanny caregiver from her paycheck but has no legal obligation to do so. It is critical for the nanny caregiver to understand what taxes are being deducted from their paycheck and to make provisions, if necessary, to pay their income taxes independently.
  3. Household employees are hourly, non-exempt employees. Your compensation agreement should state your wage in a rate per hour, and you are entitled to be paid this rate for all hours worked.
  4. Household employees are entitled to a detailed itemization of paycheck calculations and deductions. In the commercial world, employees receive a paycheck that itemizes hourly and overtime rates, the number of hours being paid in the period, and itemized deductions for the Social Security, Medicare and federal and state income taxes (where applicable) being deducted. A household employee is entitled to receive the same information from their employer. 
  5. Household employees who do not live with their employer are entitled to overtime pay for hours over 40 in a 7 day work week, at no less than 1.5 times the hourly rate of pay. Many states extend the overtime benefit to household employees who live with their employer - it is important to familiarize yourself with the law where you work.
  6. The state where you work will determine your allowed pay frequency. Most household workers must be paid weekly or bi-weekly (every other week). Semi-monthly and monthly pay, where permitted, is discouraged due to the difficulty of tracking and paying overtime, which is ALWAYS based on a 7 day work week.
HomeWork Solutions has a short video tutorial - the Anatomy of a Paycheck - that can help the household employee and the household employer both understand the issues above.

National Nanny Recognition Week 2014

 

It is National Nanny Recognition Week - a time to recognize and acknowledge the positive contributions a nanny makes in the lives of the children she cares for. HomeWork Solutions is awed by the love, commitment, continuous learning, effort and passion of these women, professionally dedicated to the wellbeing of our children and to make this world a better one! 

NNRW


September 21 to 27, 2014 is Nanny Recognition Week worldwide.  This is a special week employers, children, colleagues and others have to celebrate the nanny in their lives.   This week, please take the time to recognize and acknowledte the dedication and professionalism of any nannies in your life.  This is a week of celebration and joy for the families, children, nannies and all of us somehow involved in the nanny community…

As a Nanny Payroll and Tax Company, we interact with nannies and their employers all the time.  We witness how life changing a nanny job can be for our children and their families.   

I cannot promise I'll be here for theHWS encourages you to take some time out of your busy schedule to say “Thank you” and to show your nanny how much you appreciate her work and dedication to your family. 

We have some ideas for you; but you know your nanny, acknowledge her in a way she will enjoy and appreciate.  And most importantly, get your children involved!

 

 

Ways to appreciate your Nanny:

Red CheckSay Thank You, Gracias, Merci, Grazie, Salamat, Danke, ...   a handmade note of appreciation in her native language with a picture of her and your children will make her smile

Red CheckSend her home early one day this week … and make it “paid” time

Red CheckTreat her to lunch or dinner out

Red CheckFinancially support her continued professional development through training offered by Nannypalooza or the International Nanny Association

Red CheckGet your kids involved, baking some goodies for her or selecting a gift card for her favorite store. Get creative with your children and get a special something for her … it will be special for your nanny and a lesson of gratitude for your kids!

Red CheckYou could find more ideas on the Regarding Nannies blog

Nannies not only work in your home, they’ve earned a special place in your children’s hearts.  Take this opportunity to make her feel special and appreciated. 

Nannies - This is an opportunity for you to celebrate yourself as well.  Plan something exciting, fun or memorable for you and your charges. Take them out for a movie, ice cream, anything fun?  Celebrate this week; make it memorable for you and your nanny family … just CeLeBrAtE!!  

HomeWork Solutions proudly supports the Nanny Community through educational sponsorship of NannypaloozaINA and more. HWS' financial support to nanny education enables them to receive highly subsidized training from such internationally known experts like Dr. Harvey Karp, Dr. Debra Gilboa, Dr. Jenn Berman and more.                                                       

Managing Trustee Risks wtih Privately Employed Caregivers

 

Manage Trustee Risks Household EmploymentDo you hire, manage and issue payroll to a beneficiary’s caregiver(s) in your capacity as a trustee? If so it is important to understand the legal and tax obligations this type of employment creates for both the trust and you personally.

As a trustee, you are “held to a high standard of performance, considerably higher than the performance acceptable for one's own affairs.” As a trustee you can be held personally responsible for actions you take that create risk to the beneficiary, and may be responsible financially for all monetary consequences of these actions.

Families that hire household employees, whether a nanny for their children or a caregiver for elderly or disabled adults, assume a host of legal and tax obligations as household employers. Trustees, including those managing Special Needs Trusts (or supplemental needs trust), assume similar obligations with the added risk that a legal or tax misstep can threaten their livelihood.

It is critical to address the following issues at the time of hire, before missed compliance deadlines create expensive fines and penalties.

  1. Worker Classification: The temptation to call the privately employed caregiver an independent contractor is great. Independent contractors pay their own employment and income taxes, and the persons hiring an independent contractor appreciate this convenience and reduced costs. However, it is rare that a privately hired caregiver fits the legal classification of independent contractor. In fact, in almost all cases a privately hired caregiver is an employee of the employer paying their wage. While the independent contractor designation may be the preference of the caregiver and trustee alike, this arrangement violates tax law and creates considerable risk to the trustee.

     If you are unsure of a worker’s status contact a tax employment professional.   You can also use our Employee or Independent Contractor Decision Tool which will step you through the key aspects of the employment relationship that the IRS uses to determine worker classification.  Note only the IRS can determine worker status.  To request the status of a worker from the IRS complete Form SS-8.
     
  2. Workers’ Compensation Insurance: Household employees in most states are required to be protected by the employer with Workers’ Compensation Insurance. State law may classify the failure to provide workers’ compensation coverage as a criminal offense. Caregivers to the elderly and disabled are at particular risk of personal injury due to the physical nature of the personal care services they provide. Workers’ Compensation Insurance coverage is vital because workers’ compensation is the “exclusive remedy” a worker has against his/her employer for damages resulting from an on-the-job injury.

    Many household employers have a difficult time locating a Workers’ Compensation Insurance carrier who will offer this insurance for caregivers in a private home. HomeWork Solutions has a relationship with insurance professionals who can and will secure this vital insurance.. It is important to secure this insurance at the time of hire as there are no “grace periods” for new employers.
     
  3. Household Payroll Taxes: Household employers have payroll tax responsibilities that are similar to those of business employers. Unfortunately, household employers do not typically have a payroll and HR department to provide guidance, advice and services to meet these responsibilities. Additionally, household payroll and domestic employment have many intricate and different rules and regulations as compared to business payroll and taxes that most large payroll companies understand or properly address.  For these reasons many household employers turn to companies that specialize in household employment, such as  HomeWork Solutions at the time of hire to insure that payroll, tax, insurance and legal matters are properly addressed.

    A household payroll expert will help you:
    • Define the caregivers wages in FLSA compliant terms: Most privately employed caregivers are classified under the Fair Labor Standards Act (FLSA) as “non-exempt” employees, meaning that they are hourly wage workers. Typically, privately employed caregivers are employed for more than 40 hours in a workweek, and the establishment of proper hourly and overtime wage rates is vital.
    • Verify work eligibility (optional): HWS can verify the legal work eligibility of the caregiver via the Department of Homeland Security (DHS) e-Verify system for a minimal administrative fee. This is important added protection for the trustee that insures that the caregiver is legally eligible to work in the U.S.
    • Perform statutory new hire reporting to the state.
    • Obtain all necessary Federal and state tax identification numbers.
    • Obtain workers’ compensation insurance coverage.
    • Calculate payroll tax withholdings and estimates of employer payroll tax obligations.
    • Process the periodic payroll and distribute pay stubs to the caregiver.
    • File and remit quarterly and annual household payroll tax reports and payments.

HomeWork Solutions brings more than 20 years of household payroll and tax experience to assist families, trustees, CPAs, attorneys and Geriatric Care Managers manage the financial and legal relationship they have with privately employed caregivers. Household payroll, as discussed, has many unique and often times intricate laws, specific regulations and exceptions and exemptions that differ from corporate or business oriented payroll.  Most payroll companies simply do not understand or handle household payroll issues effectively or efficiently.  At HWS we are focused solely on household payroll and domestic employment, it’s all we do, it’s all we have ever done.

Tip Sheet - Avoid Common Nanny Payroll Mistakes

Unemployment Insurance: A Nanny's Safety Net

 

Understanding the Employer's Role with Unemployment

When you hire someone to work in your home, you become a household employer. You are required to pay unemployment taxes, as well as other payroll taxes. Like thousands of other clients, you outsource all compliance activities to HomeWork Solutions - choosing a service level that best fits your needs. 

Nanny UnemploymentAll household employer's pay onto the unemployment system, which pools all employer paid taxes to fund unemployment benefits to workers who are discharged through no fault of their own. The average cost to an employer is $350 annually per employee.

Nanny and senior caregiver arrangements always end – either the child and family outgrow the need or the senior passes or is moved to a group care setting. You let your household employee go. Your role as employer is done. You reach out to HWS to finalize your tax reporting paperwork and to notify the state that you are “out of business”. 

Free Tip Sheet How To Let Your Nanny Go

Your former employee is now looking for a new family to work with and is not finding a job as quickly as she had hoped. She applies for unemployment benefits to help her during this job transition. She provides prior job information to the state's Unemployment Office. The Unemployment Office sends you a questionnaire to complete.

The state determines eligibility for unemployment benefits (sometimes referred to as unemployment insurance) and the payments are paid by the state to the former employee who is unemployed and activity looking for work. The state uses money from the pool of monies you have paid into the unemployment system – hence the term ‘insurance’. You, the former household employer, will receive statements of payments made to her. These are not billed to you, they are strictly informational and no action or additional payments are required.

Unemployment insurance is an important safety net for your former nanny or senior caregiver. You have done the right thing by paying your caregiver 'on the books' and now you can rest assured that, although your arrangement is over, your former employee has an income stream while she searches for that next position.

3 Critical Parts of your Nanny Work Agreement

 

Nanny Contract Work AgreementThe work agreement (sometimes called a contract) you negotiate with your nanny, housekeeper, or elder care provider sets the professional tone of the work relationship right from the start. A carefully thought out work agreement will help the employer avoid future problems and misunderstandings with the employee.

Hourly Pay Rate

Household employees are paid hourly by law. Realistically, most families agree with their nanny or senior caregiver on a weekly or daily pay rate. That is perfectly fine - so long as you do the necessary translation to state this, in writing, as an hourly pay rate. 

Why is this important? Your household employee is entitled to overtime pay when they work more than 40 hours in a week. Most nannies and eldercare providers work more than 40 hours weekly. In a dispute, the weekly salary you agreed to will be presumed to cover 40 hours of work - even though you intend it to cover 45 or more. Getting this detail down in writing will avoid unpaid wage claims and create the foundation for computing extra wages for those occasional times when you need your household employee for more than her standard hours.

describe the image HWS Tool: Hourly Rate Calculator 

Confidentiality Clause - Not Just for Celebrities!

Household workers are employed in your private home. They become privy to many personal aspects of your life, health, and household that you would prefer remain private. A confidentiality clause in the work agreement simply makes sense and provides an opening for you to have a frank discussion with your employee about respecting each other's privacy and keeping private matters confidential. 

Tenancy Clause

Everyone has heard the story of the nightmare nanny on the news - the California nanny who refused to move out of her employer's home after she was fired. If you have a live-in household worker, a tenancy clause is important protection from this dreadful (albeit rare) occurance.

describe the image HWS Tool: Sample Work Agreement Template 

 

Nanny Childcare WORK AGREEMENT  
Senior Home Care WORK AGREEMENT
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