Knowledge Center

Legal and Tax Issues

• Do I need to pay my housekeeper or nanny overtime? What about nanny minimum wage?

  The simple answer is yes. Domestic employees specifically are covered by the Fair Labor Standards Act (FLSA) and have been since 1974. The FLSA establishes: The rules for workers who may be salaried (exempt) and who must be paid overtime (non-exempt). The rules for workers who must be paid no less than minimum wage. State […]

• What payroll taxes does my nanny (housekeeper, maid) pay?

  Nanny payroll taxes, what are they?  First it is important to understand the so called “nanny taxes” apply to ALL household employees, not just nannies. Your household employee (nanny, housekeeper, senior caregiver, etc.) contributes to or pays: Social Security & Medicare Taxes (via payroll deduction) Employee Disability/Unemployment Taxes where required. Federal/State Income Taxes The employer […]

• Caregiver or Nanny Pay Stubs: Are they required?

  Did you know that 39 states have now passed laws requiring employers to provide itemized pay stubs to their employees? Why all the attention to nanny pay stubs? There has been a slew of legislation at the state level in the last decade focused on “Wage Theft Prevention” – essentially employers either not paying for all hours […]

• How are the nanny’s (employee’s) payroll taxes paid?

  Whether your nanny works full-time, part-time or lives with your family, the odds are likely that in the eyes of federal and state governments, they are an employee of your household. That means that you, as the nanny’s employer, need to make sure that you’re following state, federal and local tax requirements, both when you […]

• How often do I need to pay or remit the “nanny taxes”?

  Many wonder how to pay nanny taxes and how often to file. Understand that the federal and state filing schedules are NOT synchronized. Additionally, not all states have the same reporting schedule. Federal Employment Taxes: Employers of domestic workers must, at a minimum, make annual payments for Social Security, Medicare and Withheld Income Tax (if […]

• Can an employer pay the nanny on the payroll of their own business?

  Considering adding a nanny on business payroll? Nanny employers who own a business or a farm operated for profit can choose to include their nanny’s payroll in their 941 or 943 tax returns. The ‘nanny taxes’ are exactly the same employment taxes paid for other employees and do not require special calculation. What the sole […]

• Nanny Fired: When are last wage payments due?

  Whether the nanny is fired (involuntary separation, termination or discharge) or resigns (quits) voluntarily, state rules define how quickly the employer must give the final paycheck. Below is a state by state summary of separation payment rules as they apply to household employees.* May 2019 You MAY NOT withhold the final paycheck pending the return […]

• Nanny Terminated: Do I have to pay out Vacation or Sick Time?

  When your household employee – whether a nanny, housekeeper, senior caregiver or other – leaves your employment many states require that you pay out her earned but unused vacation time. Generally, it doesn’t matter if the separation of employment is voluntary or involuntary. If you have a separate bank for sick time, that is excluded […]

• Fair Labor Standards Act (FLSA) Overtime Rules and Domestic Employment

  Fair Labor Standards Act (FLSA) overtime rules and domestic employment are often misunderstood by the household employer. The temptation is to either agree to a weekly “salary”, agree to “average hourly rate” (pay $15 an hour for 45 hours for example) and or to average weeks (pay bi-weekly and average the two weeks hours to […]

• IRS Announces Penalties for Incorrect Forms W-2, Wage, and Tax Statement

  Household employers will incur significant incorrect Form W-2 penalties if there are name and Social Security number mismatch problems. The Social Security Administration returns incorrect forms W-2 (name and Social Security number mismatch problems) to employers for corrections. The Internal Revenue Service assesses penalties to household employers filing Forms W-2 with mismatched names and Social […]

• What about tracking the nanny’s hours? What is required?

  Fair Labor Standards Act (FLSA) states that due to the nature of their work and duties, nannies and other household workers are employees, are hourly workers,  and are covered by minimum wage and overtime laws. The FLSA requires employers to maintain accurate and complete contemporaneous time records for tracking hours worked by an employee. When […]

• How do I calculate overtime for my salaried nanny? What about compensation for occasional overnights?

  Most regular nannies are paid on a guaranteed pay basis. What this typically means is that the family agreed to pay the nanny a pre-determined salary for a given number of hours in a pay period. The full time nanny work schedule is often more than 40 hours per week. It is important to remember, […]