Tuesday, July 22, 2008
Minimum Wage for Nanny Payroll Increases
The Federal minimum wage, which covers nannies, maids, housekeepers, and other domestic service workers, increases to $6.55 per hour on July 24, 2008.
There are substantial revisions to the minimum wage for nanny payroll across the country this month. Please refer to our chart "Minimum Hourly Wage Rates for Nanny Payroll by State" for the most recent information on your state.
The Minimum Wage Compliance Calculator tool, part of our Suite of Free Nanny Tax Calculators available to all domestic employers has been updated today to reflect the new rates.
Nanny employment is specifically covered by the Fair Labor Standards Act's minimum wage provisions. Under Federal law, LIVE-IN nannies (or housekeepers, maids, etc) are not entitled to the overtime differential of 1.5 times the normal hourly rate. Maryland and New York specifically provide the overtime differential to live-in domestics.
As a practical matter, in today's competitive nanny market, employers almost always have to offer a compensation package well in excess of current minimum wage levels.
There are substantial revisions to the minimum wage for nanny payroll across the country this month. Please refer to our chart "Minimum Hourly Wage Rates for Nanny Payroll by State" for the most recent information on your state.
The Minimum Wage Compliance Calculator tool, part of our Suite of Free Nanny Tax Calculators available to all domestic employers has been updated today to reflect the new rates.
Nanny employment is specifically covered by the Fair Labor Standards Act's minimum wage provisions. Under Federal law, LIVE-IN nannies (or housekeepers, maids, etc) are not entitled to the overtime differential of 1.5 times the normal hourly rate. Maryland and New York specifically provide the overtime differential to live-in domestics.
As a practical matter, in today's competitive nanny market, employers almost always have to offer a compensation package well in excess of current minimum wage levels.
Wednesday, July 16, 2008
Follow-up: Contracts Required with Nannies in Montgomery County (MD)
The Montgomery County (MD) Council is creating quite a stir with it's new "Nanny Contracts" law.
One point missed in yesterday's media is that the county will be drafting and publishing a model work agreement and disclosure statement. I believe the only substantial difference between the eventually published model and the sample nanny work agreements published at 4nannytaxes.com will be the disclosure statement to the effect that nannies and other domestics are protected under various state and federal laws. Chief among these in Maryland is the requirement to pay live-in domestics an overtime differential (referred to as time and a half) for all hours worked in a week over 40. This is a more strict requirement then offered by the Federal Fair Labor Standards Act (FLSA).
We will keep you posted as developments occur. This blog was picked up by the Washington Post article on the nanny contracts legislation today, pointing out that Montgomery County MD has the highest filing rate of nanny tax returns of any jurisdiction in the nation.
One point missed in yesterday's media is that the county will be drafting and publishing a model work agreement and disclosure statement. I believe the only substantial difference between the eventually published model and the sample nanny work agreements published at 4nannytaxes.com will be the disclosure statement to the effect that nannies and other domestics are protected under various state and federal laws. Chief among these in Maryland is the requirement to pay live-in domestics an overtime differential (referred to as time and a half) for all hours worked in a week over 40. This is a more strict requirement then offered by the Federal Fair Labor Standards Act (FLSA).
We will keep you posted as developments occur. This blog was picked up by the Washington Post article on the nanny contracts legislation today, pointing out that Montgomery County MD has the highest filing rate of nanny tax returns of any jurisdiction in the nation.
Labels: domestic worker contracts, domestic worker payroll, nanny contracts, nanny payroll taxes, nanny tax compliance, nanny work agreements
Tuesday, July 15, 2008
Nanny Work Agreements or Contracts the Law in Montgomery County (MD)
The Montgomery County (MD) Council has unanimously approved the 'Nanny Bill' today (7/15/2008) and County Executive Isiah Leggett (D) is expected to sign this measure into law. The bill requires household employers in Montgomery County to have a written work agreement that clearly states the job description, wages and benefits for their household employees. Employers of live-in domestic help are required to provide a private room with a lock and reasonable access to bathroom, kitchen and laundry facilities.
Montgomery County is the first in the nation to pass a bill designed to protect the household employee. It aims to protect nannies and other domestic workers against unfair wage practices, and insure overtime compensation. Other jurisdictions considering such legislation include San Francisco and New York City. Once the Montgomery County 'Nanny Bill' becomes a law, household employers will have six months to comply with the new rules or face up to a $1000 fine per violation.
Interestingly, according to IRS statistics, nanny tax compliance in Montgomery County MD is the highest in the nation at 1238% the national average filing rate (Tax Year 2003). Montgomery County includes the Washington DC suburbs of Potomac, Bethesda, Chevy Chase and Silver Spring.
HomeWork Solutions has long advocated that a written nanny work agreement is a best practice to protect both the worker and the employing family. It's article Ten Tips for Writing the Nanny Work Agreement is one of their more popular website downloads.
Montgomery County is the first in the nation to pass a bill designed to protect the household employee. It aims to protect nannies and other domestic workers against unfair wage practices, and insure overtime compensation. Other jurisdictions considering such legislation include San Francisco and New York City. Once the Montgomery County 'Nanny Bill' becomes a law, household employers will have six months to comply with the new rules or face up to a $1000 fine per violation.
Interestingly, according to IRS statistics, nanny tax compliance in Montgomery County MD is the highest in the nation at 1238% the national average filing rate (Tax Year 2003). Montgomery County includes the Washington DC suburbs of Potomac, Bethesda, Chevy Chase and Silver Spring.
HomeWork Solutions has long advocated that a written nanny work agreement is a best practice to protect both the worker and the employing family. It's article Ten Tips for Writing the Nanny Work Agreement is one of their more popular website downloads.
Labels: nanny bill of rights, nanny contracts, nanny work agreements
Tuesday, June 24, 2008
Yet More Reasons for Nanny Tax Compliance...
Bob King, Esq., President of Legally Nanny reports that H.R. 5804, the Taxpayer Responsibility, Accountability and Consistency Act of 2008, recently introduced in Congress, could impose stiff penalties for families misclassifying nannies as "independent contractors."
"H.R. 5804 would significantly increase penalties for employers who misclassify workers as independent contractors instead of correctly classifying them as employees," reports Mr. King. "Additionally, the bill places the burden of proof on the taxpayer to demonstrate that the worker was properly classified. Finally, in addition to increasing the penalties for failing to properly pay employees and provide correct payroll information such as W-2 forms, the legislation also imposes increased penalties for intentionally disregarding the worker's proper classification."
Mr. King advises that this bill is directly relevant to nanny employers. "Under both federal and state law, nannies and other household staff are employees; they are not independent contractors. Yet some clients insist on mischaracterizing nannies and other domestic workers as independent contractors - or simply avoiding the subject altogether - in an effort to avoid paying household employment taxes."
"H.R. 5804 heightens the danger to (household employers) mischaracterizing such workers. At Legally Nanny we've assisted scores of clients in hiring, employing, and paying nannies, elder care providers, and other household employees legally."
Legally Nanny offers a comprehensive package to new household employers that includes the copyrighted Legally Nanny Hiring & Employment Guide and an employment agreement specifically tailored to each client's unique household employment situation. Equally important, their one flat fee entitles clients to a full year of responsive, knowledgeable service, and if the household employee leaves within one year of the client retaining the service, they will re-do all the employee paperwork again for free.
For more information on legal issues surrounding nannies and other household employment workers, please visit www.legallynanny.com.
Bob King has practiced labor & employment law in Orange County, California. He represents household employers, domestic employment agencies, businesses and individuals in a wide variety of legal matters, including defending against claims and litigation from employees and charges and investigations from government agencies.
Bob advises clients on hiring, evaluation, accommodation and termination matters; wage and hour issues; workplace policies, handbooks, agreements and contracts; and resolving client and business disputes. Bob also serves as the General Counsel for the Association of Premier Nanny Agencies, on the Board of Directors for the International Nanny Association, and has served as an expert witness in household employment litigation.
This material is for informational purposes only; it is not legal advice.
"H.R. 5804 would significantly increase penalties for employers who misclassify workers as independent contractors instead of correctly classifying them as employees," reports Mr. King. "Additionally, the bill places the burden of proof on the taxpayer to demonstrate that the worker was properly classified. Finally, in addition to increasing the penalties for failing to properly pay employees and provide correct payroll information such as W-2 forms, the legislation also imposes increased penalties for intentionally disregarding the worker's proper classification."
Mr. King advises that this bill is directly relevant to nanny employers. "Under both federal and state law, nannies and other household staff are employees; they are not independent contractors. Yet some clients insist on mischaracterizing nannies and other domestic workers as independent contractors - or simply avoiding the subject altogether - in an effort to avoid paying household employment taxes."
"H.R. 5804 heightens the danger to (household employers) mischaracterizing such workers. At Legally Nanny we've assisted scores of clients in hiring, employing, and paying nannies, elder care providers, and other household employees legally."
Legally Nanny offers a comprehensive package to new household employers that includes the copyrighted Legally Nanny Hiring & Employment Guide and an employment agreement specifically tailored to each client's unique household employment situation. Equally important, their one flat fee entitles clients to a full year of responsive, knowledgeable service, and if the household employee leaves within one year of the client retaining the service, they will re-do all the employee paperwork again for free.
For more information on legal issues surrounding nannies and other household employment workers, please visit www.legallynanny.com.
Bob King has practiced labor & employment law in Orange County, California. He represents household employers, domestic employment agencies, businesses and individuals in a wide variety of legal matters, including defending against claims and litigation from employees and charges and investigations from government agencies.
Bob advises clients on hiring, evaluation, accommodation and termination matters; wage and hour issues; workplace policies, handbooks, agreements and contracts; and resolving client and business disputes. Bob also serves as the General Counsel for the Association of Premier Nanny Agencies, on the Board of Directors for the International Nanny Association, and has served as an expert witness in household employment litigation.
This material is for informational purposes only; it is not legal advice.
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Massachusetts to Target Enforcement of Employee Mis-classification
I blogged on June 10, 2008 on the risks household employers run when they pay their nanny or housekeeper 'under the table.' Massachusetts recently announced an enforcement initiative that will attempt to crack down on "the underground economy of workers being paid in cash, not getting overtime, or being unlawfully called "independent contractors," according to a report in The Republican ( Springfield, MA ). These practices cost the state "$100 million in unpaid income tax payments and another $100 million in unpaid workers compensation each year, according to a Harvard study."
The Massachusetts State Department of Labor has established the Joint Task Force on the Underground Economy and Employee Misclassification. The task force is tasked with "working to bring those employers who skirt the laws of the Commonwealth into compliance" according to the agency website.
Nannies and other household workers such as housekeepers and maids are employees of the household they work for. According to IRS estimates, 70 - 80% of families employing these workers either mis-classify the worker as an 'independent contractor' or completely pay the worker under the table. This costs the Federal and state governments tens of millions of dollars annually from household employment alone, as well as robbing these workers of their eligibility for unemployment benefits when the job ends.
More information about the classification of household employees such as a nanny, as well as tax and labor laws that apply to these workers can be found in the HomeWork Solutions' Frequently Asked Questions.
The Massachusetts State Department of Labor has established the Joint Task Force on the Underground Economy and Employee Misclassification. The task force is tasked with "working to bring those employers who skirt the laws of the Commonwealth into compliance" according to the agency website.
Nannies and other household workers such as housekeepers and maids are employees of the household they work for. According to IRS estimates, 70 - 80% of families employing these workers either mis-classify the worker as an 'independent contractor' or completely pay the worker under the table. This costs the Federal and state governments tens of millions of dollars annually from household employment alone, as well as robbing these workers of their eligibility for unemployment benefits when the job ends.
More information about the classification of household employees such as a nanny, as well as tax and labor laws that apply to these workers can be found in the HomeWork Solutions' Frequently Asked Questions.
