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Can I Legally Pay My Nanny a Salary?

Traditionally, an employee who is paid a “salary” instead of an hourly wage is an “exempt” employee under the Federal Fair Labor Standards Act (FLSA), meaning that this employee is not eligible for overtime pay required by that law. Nannies, housekeepers and most domestic employees who work in your home do not qualify as “exempt”, meaning you must pay those employees at least the prevailing federal minimum hourly wage rate and one and one-half times their normal hourly rate for all hours worked in one week over 40 hours. So, can you legally pay your nanny a salary? The answer [...]

By |November 15th, 2016|NannyPay, Tax Reminders, Tips|0 Comments

Is Your Nanny an Employee or Independent Contractor? You Can Both Ask the IRS

Is that nanny you just hired an employee or independent contractor? The answer has significant tax implications for both the family and nanny, because an employer is obligated to pay employment taxes for an employee, and may also have to provide workers compensation, unemployment or disability insurance for employees as well, but does not have to pay these taxes or benefits to independent contractors. Many nannies start work for a family with taxes the furthest thing from their mind. But then the nanny is surprised to receive a Form 1099-MISC from their family at the end of the year, instead [...]

By |July 21st, 2016|Hiring, NannyPay, Tax Reminders|0 Comments

Uber Sued in Nationwide Class Action & Why This Matters to Nannies

Just after settling a similar lawsuit in California and Massachusetts for approximately $100 Million, Uber Technologies, the increasingly popular ride-sharing company, has been sued yet again, this time in a nationwide class action, that claims the company illegally classified drivers as independent contractors instead of as employees, and denied them overtime wages required to be paid to employees under the Fair Labor Standards Act (FLSA). Uber’s competing service, Lyft, has recently increased its settlement offer to $27 Million in a similar case, also filed in California. Household employers take note. Although nannies and other in-home help are almost never properly [...]

By |July 13th, 2016|NannyPay, Tax Reminders, Tips|0 Comments

Multiple Options for Child Care

As a parent there are so many different options of childcare for you to pick from. It's a huge pool of caregivers just waiting to be chosen. If you're a first time parent it is even worse. Why? Because you don't know what system, what type of person, or which level of childcare works best for your family. And everyone around you is going to have an opinion of what works best for you and why you should do it his or her way. We have broken down the different types of caregivers and listed the key differentiating points of [...]

By |July 12th, 2016|NannyPay, Tips|0 Comments

Is That Household Payroll Service Putting You at Risk?

Using a third-party payroll service may be convenient, but in addition to being a costly alternative to doing it yourself, household employers should be aware that the primary responsibility to protect their employee’s personal information and data still rests on them. Use of third-party payroll service providers complicates payroll data security because employers, regardless of their own efforts to safeguard their employee’s data, might still need to respond to an identity theft issue caused by their payroll service’s insufficient security measures, according to an IRS special agent with the Service’s Criminal Investigation Division, and who is also the identity theft [...]

By |July 5th, 2016|NannyPay, Tips|0 Comments

Important Overtime Rules for Preschool Instructors

Childcare Workers Who Provide "Preschool" Instruction Are Not Exempt From Overtime Pay as "Teachers" The Federal Fair Labor Standards Act (FLSA) requires most workers, including nannies and other childcare providers, to be paid time and one-half for all hours over 40 they work in a week. Recently, a federal court ordered a childcare company to pay more than $92,000 in overtime pay and interest to its workers who worked more than 40 hours. In doing so, the court ruled that the FLSA exemption for teachers at elementary or secondary schools did not apply to daycare centers even if their employees [...]

By |June 14th, 2016|NannyPay, Tax Reminders, Tips|0 Comments

Federal Wage and Hour Division Enforcement Increases Focus on Employer-Employee Relationship

Nannies who provide in-home care are almost always employees of the families who employ them, yet many families characterize their domestic employees as independent contractors incorrectly, either unknowingly or willfully, in order to avoid social security taxes or overtime pay rules of the federal Fair Labor Standards Act (FLSA). Over the last few years, the Wage and Hour Division of the US Department of Labor, the Division charged with enforcement of the FLSA, has increased its investigative focus on independent contractor mis-classification and nontraditional workplace structures, according to David Weil, administrator of the Wage and Hour Division since 2014. Household [...]

By |May 5th, 2016|NannyPay, Tax Reminders, Tips|1 Comment

Family Caregivers and the “Nanny Tax”

If you hire a nanny or elder caregiver to care for your child or aging parent, you probably already know that the law generally considers this person your employee and you will need to withhold and pay the "Nanny Tax" for this person, which more specifically is social security and Medicare employment taxes. Caregivers are typically employees of the individuals for whom they provide services because they work in the homes of the family and the family has the right to tell the caregivers what needs to be done. But what if these services are provided by a family member? [...]

By |April 20th, 2016|Hiring, NannyPay, Tax Reminders|0 Comments

Be Sure to File Your Employment Tax Returns, Or Else

Most times, household employers run afoul of the law by paying their household help “under the table” and not withholding the proper employment taxes. But by paying your nanny legally, and withholding taxes from her pay, creates a trust relationship between you and the government with regard to those withheld taxes. If you withhold employment taxes, and then fail to pay those taxes over to the government, you likewise face substantial liability as a “responsible person” under federal (and most states’) tax laws. In US v. Hastings (W.D. Mo. 2015), a bookkeeper for a small business who willfully failed to [...]

By |November 6th, 2015|NannyPay, Tax Reminders|0 Comments

Daycare vs Nanny

Growing up I always wanted to be a stay at home mom. As I got older reality set in and I realized that might not be an option for me. Plan B was derived: if I had to work and so did my husband we would want a loving nanny to care for our child and help around the house with light chores. Daycare was last on our list - simply because we had no experience with daycare in our families. Sure enough in 2012 our little boy arrived and we are a working parental team and like many other [...]

By |August 31st, 2015|Hiring, NannyPay|0 Comments