Knowledge Center
Legal and Tax Issues
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, […]
What could happen if I don’t pay the nanny taxes? Are there any good reasons to pay?
Why Should I Pay Nanny Taxes In-home care is expensive. After the family’s mortgage payment, the nanny or home health aide salary is often the biggest expense in the household. Add the cost of taxes on top of this and many families wonder “Why?” If I don’t pay the taxes the nanny keeps more money, […]
How frequently do I need to pay my household worker? My nanny wants to be paid weekly. Do I need to do that?
The pay frequency of a nanny or senior caregiver (and all hourly, non-exempt employees) – the maximum interval between wage payments to the worker – is governed by state law. Nanny pay frequency regulations are summarized below. Payroll calculations for your household employee (nanny, housekeeper, maid, senior caregiver, etc.) are governed by the Fair Labor Standards Act. […]
Do I need a nanny contract or work agreement?
A nanny contract or work agreement is not legally required under Federal law, but you SHOULD take the time to write one up anyway. It is a best practice that protects the family and provides a point of reference to both parties when there are questions or misunderstandings. A written nanny work agreement helps the […]
What are my tax responsibilities with a temporary nanny? She only worked for us for six weeks while my wife was on bed rest.
Many families hire temporary nannies or other temporary household workers and have many questions about their financial and legal responsibilities. Examples include the temporary nanny who is working while the mother is on bed rest, the respite senior caregiver staying with an aged family member while you are away for work or vacation, or the […]
My nanny or caregiver is not a legal resident. What should I do about employment taxes for undocumented nanny?
The Internal Revenue Code maintains that the immigration status of your nanny or other employee has no bearing on your obligation for nanny employment taxes. Immigration enforcement is focused on penalizing the EMPLOYERS – particularly prosecution for employment tax fraud. Employing an undocumented worker is a violation of immigration law. The employer’s risk here is […]
What is a wage garnishment order?
Most of our nanny and senior care employers are unfamiliar with wage garnishment orders and the implications and responsibilities they have in relation to the order. A wage garnishment order is a court order which requires that some portion of an employee’s earnings be withheld by the employer for the payment of a debt. Most […]