Is it legal for a nanny to be employed by a family office?
What is a family office?
The first step to understanding the difference between being employed by a family and family office employment is to understand the purpose of a family office. A family office may be an advisory firm that focuses on private wealth management or a separate legal entity that has been created to manage often multi-generational families and their wealth. They offer end-to-end solutions for ultra-high-worth families that encompass everything from investment strategy and budgeting to time and household staff recruitment and management. A family office will have lawyers, accountants, insurance professionals, and other specialists on staff ready to serve their clients. These clients’ private life styles often mirror the complexity of a medium or larger company, thus requiring a management team.
What are the benefits of the family office?
A nanny’s job is likely very much the same when employed through a family office as her peers in more traditional parent-employer situations. However oftentimes there may be other staff in the home – a personal assistant perhaps, a housekeeper and perhaps even a house manager. So while the nanny’s responsibilities are the same, she will often have peers at work, and may in fact take direction from senior staff.
There are employment benefits to a nanny or other household employee working through a family office that are more traditional in the corporate world. Unlike peers who are employed directly by the family, through a family office they will likely have additional benefits like a group health insurance policy, employer sponsored retirement plans, and more robust paid time off policies. They could also see the potential for higher wages given the wealth level of family office clients and the caliber of staff that they demand. Regardless, they can still expect to maintain the same legal protections of a traditional household employee, including those granted in Domestic Worker Bill of Rights legislation.
What are the benefits of working directly for a family?
For a household employee working directly for a family there is often a much more personal and informal relationship. A family that is not using a family office tends to be less complex in their needs and thus more involved in the day-to-day happenings. It may be that one of the parents can take the kids to school in the morning but needs the nanny to pick them up and take over for the afternoon/evening. When working directly for a family there is a better chance of more relaxed working conditions thanks to the more personal relationship created, though this would certainly differ from family to family. As with the family office, these are household employees with the same set of rights and protections dictated by federal/state governments.
What are the downsides to employment through a family office?
A challenge when working through a family office may be the expectations of the family. From their perspective they have hired a company to think about household things for them. Meaning that there could be some blurring of responsibilities due to the more removed nature of the relationship. A nanny, for instance, could find herself removed from the parents and taking direction from a senior household staffer. Communicating regarding the child’s health, development and the like is much less personal. Also, an employee working though a family office should expect a more demanding job description. Another downside is the added step needed to clear up an issue. If an employee has an issue they would take it up with a senior household staff person or the family office management first, potentially causing the issue to take longer to resolve. It is worth noting though that this step could be a benefit with the family office acting as an advocate on your behalf.
What are the downsides of working directly for a family?
Families that are not utilizing a family office often employ a much smaller number of employees – typically 1 or 2 at the most, versus a family office which can often retain 15-20 household employees, in addition to the professional staff. Some regulations are not triggered until a company (Family / Family Office in this case) exceeds certain employee counts. For example, the Pregnancy Discrimination act, which prevents treating women (an applicant or employee) unfavorably because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth, does not apply to employers that have less than 10 employees. Some portions of the of The Americans with Disabilities Act do not apply to employer until they employ 15 or 25 employees.
For somebody evaluating new household and family office employment opportunities, there is certainly a decision to be made about which route to take. The decision could come down to weighing rate of pay against quality of life. It could also come down to wanting a more formal employment situation or a more flexible one. Either way it is important to understand the difference. Keep in mind too that there is a large margin in these factors and it can depend as much on the employer as the employee.