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 [...]
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 [...]
The US Citizenship and Immigration Service (USCIS) has announced that employers should continue to use the present Form I-9, the Employment Eligibility Verification form, even thought the Budget Office control number on that form shows an expiration date of March 31, 2016. USCIS stated that the old form remains effective until a new form is issued. All employers, including household employers of nannies and other domestic help, must complete a Form I-9 for newly hired employees to verify their identities and their right to work in the U.S.
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? [...]
IRS Directly Receives Some 21 Million W-2s This Year in Effort to Fight Tax Fraud Household employers should know they are obligated to file Forms W-2 and W-3 concerning wages paid to their nannies with the Social Security Administration, and not with the IRS. Nevertheless, some large payroll providers are participating in a pilot program by which some 21 million employees’ W-2s were provided this year directly to the IRS, in addition to the SSA, in an effort to assist the IRS in detecting tax fraud based upon refunds claimed on false individual income tax returns with improperly obtained or [...]
Paid Time Off Reminder Employers are responsible to pay accrued vacation and sick time when a nanny leaves. Vacation pay, holiday and sick time, also known generally as Paid Time Off or PTO, is a common benefit provided by household employers to their nannies and other domestic help. It is important, however, to clarify in writing at the start of the employment relationship how much PTO a nanny gets, how and when it may be used and, most importantly, how PTO is accrued during the year (e.g., all at once or pro rata over the year). Although some states’ labor [...]
Household employers were required to provide their employees a Form W-2 for wages paid to them in 2015 by February 1st. If you haven’t already done this yet, you should so so immediately. Paper filers are reminded that Copy A of all your Forms W-2, along with a Form W-3, by February 29th. If you miss that deadline for some reason, you can file electronically by March 31st and still not be considered late. This will be the last tax year in which the IRS will offer this “electronic filing extension”. President Obama recently signed legislation that will require all [...]
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 [...]