Hi! I’m a former Manhattan nanny with 12 years’ experience, and I’m totally obsessed with the child care in a weird geeky way. My column is all about you the new parent, looking to go back to work after a long pregnancy and the birth of junior, or you, the mom who needs an extra pair of hands with your growing brood.
Consider my hacks as short cuts, tips or tricks to navigating the complex world of U.S child care.
In my previous column The Child Care Hack Series: What Do You want From Mary Poppins?, we explored the nuts and bolts of what exactly you need from a nanny in terms of hours and duties. We also discussed whether it’s better to pay a flat weekly wage or an hourly rate. Now let’s look at payroll.
No 1099
Nannies are not considered freelance workers or independent contractors by the IRS. They are classified as ‘employees’ and they require a W-2 form at the end of the year. This means that you – as the employer – are required to report your nanny’s income, as well as pay his or her social security and income tax. Some nannies prefer to be paid cash, but bear in mind that you run the risk of running afoul with the IRS should your nanny ever seek unemployment insurance in the future and you’re listed as the last employer.
It’s better not to guess the tax contributions you’ll need to make on your nanny’s salary because if you make a mistake, you are liable. It’s safer to opt for an online payroll service like HomeWork Solutions or HomePay. They take care of everything for you and it’s more affordable than hiring an accountant.
Worker’s Compensation
It is unlikely that your home insurance covers an employee working in your home against an injury or accident that results in a disability claim. You will need to speak with your insurance company to determine this. It’s more likely that you will be required to purchase a Worker’s Compensation insurance policy (which can run to just under two hundred dollars per year) if your nanny works a minimum of 40-hours a week. My advice is to seriously consider taking out an accident policy, even if your nanny works part-time. This will protect your family from any potential lawsuit should a domestic worker be injured while in your home.
Live-in Workers, Overnight Workers
Live-in domestic workers are generally assumed to work a 40-hour week, even if the hours are arranged as less. This also applies to a nanny or house-sitter who regularly stays overnight.
Disability Benefits Insurance
Nannies who work 40 or more hours per week for the same employer must be covered by Disability Benefits Insurance. The hours counted toward the 40-hour limit include all hours on premises. Disability Benefits Insurance is required for domestics four weeks after the thirtieth day of employment.
Next Time: Three Hacks Against Fake References.
RESOURCES
- Get your free employer handbook here.
- Calculate whether your nanny is considered a full-time employee here.
Feel free to email me at TheNannyGeek@gmail.com. (100% confidentiality guaranteed) to brainstorm answers to your problems.
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The views and opinions expressed on this blog are purely the blog contributor’s. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer or provider. Writers may have conflicts of interest, and their opinions are their own.