Tuesday, December 27, 2005
We know, as parents, the importance of keeping our children safe. Childcare choices are simply an extension of our obligation to our children. As the mother of 3 children myself, I speak from both personal and professional experience.
Back in the 1980's when I first began employing nannies, criminal background checking was not that common. Were we naive? Lazy? Ignorant? Perhaps a little bit of each. Before the Internet Age, getting a criminal background check done was both time consuming (try finding someone to do it back then!) and relatively expensive. Today, we have no such barriers or excuses.
HomeWork Solutions operates 4nannies.com, the web's original online nanny recruiting venue. I have occasion to talk to families on an almost daily basis. As is the nature of customer service, I hear from far more families disappointed in their newly hired nanny than those who are pleased. 4nannies.com members have a criminal background check credit included in their site membership - they simply need to obtain their new-hire's signed consent and spend 2-3 minutes online ordering the search. I noticed a trend some time ago and in the last few months I began informally tracking the correlation between poor hires and families who did not do the background checking.
Amazingly, more than 9 out of 10 families I have spoken to in the last several months did not take that final step of ordering the background check they had already paid for! If this wasn't done, were references checked either? One family called horrified - the Mom was sure she smelled marijuana in the nanny's quarters. No background check had been done. The mom did not believe her children were in immediate danger and was reluctant to dismiss the nanny. I encouraged the mom to order the background check; three days later we received the report back. The nanny had two moving violations on her license and a misdemeanor drug conviction. Is she a horrible person? Probably not. Is she mature enough to have full charge, unsupervised responsibility for two young children? That is not a bet I would take! Needless to say, the family immediately began searching for a replacement.
Another mom called to discuss problems she was having with the nanny. Nothing particularly dangerous, but non-professional. Arriving to work late for example. I asked her what her references had to say about her prior performance. "Oh, I didn't call them," reported the mom. Why not? Mom didn't want to ask the nanny and have her think Mom didn't trust her! Why should she trust her before checking all references and background? She is a stranger!
Most nannies are wonderful caregivers and many families form deep and lasting bonds with their nannies, as my own has. However, I have learned over the years that none of us is a perfect interviewer, and our intuition alone is not enough validation to hire a caregiver who will have sole charge of our children. Insist on childcare references and then check them! Pay for a thorough pre-employment background check, including the DMV records if the nanny will be driving. Cost is not an issue here - most families can thoroughly investigate their nanny for $100 - $200 - about one or two day’s salary!
4nannies.com has an exhaustive Background Checking FAQ at https://www.4nannies.com/background/index.cfm as well as an easy online ordering process. Please - investigate before you leave a caregiver with your children!
Monday, December 19, 2005
We are often asked by our clients for some guidance on bonus and incentive pay norms for nanny employment. We are happy to share our experience and offer some guidance.
Some families offer their nanny an incentive payment or bonus at year's end. The most popular bonus is cash. All bonus payments are at the discretion of the employer, and the amounts will vary tremendously depending on the nanny's length of employment, overall performance, and the means of the employer. Bonuses generally reflect the family's appreciation for continuity of care for their child(ren) and recognition for a job well done. A bonus is not a substitute for an annual pay review.
HomeWork Solutions' finds that the average year end bonus is one - two weeks of pay. Long-term staff bonuses may be as high as one month's pay. A small personal gift from your child is also appreciated. Families also sometimes give additional paid vacation in lieu of a bonus (above the agreed on annual leave). Families who pay anniversary bonuses generally do not pay additional year end bonuses (bonus upon the employment anniversary date).
Other incentives include health club membership, airfare home, and payment for all or part of health insurance premiums. Nannies also report receiving gift cards to popular restaurants or day spas, flowers, and other expressions of appreciation. Remember, most bonuses and non-cash compensation (with the exception of health insurance premiums) are taxable income to the employee and should be reported as such.
Monday, December 12, 2005
New York State Loan Default and Consequences
New York State borrowed $400 million from the federal government in 2003 to keep the NY state unemployment insurance fund solvent in the wake of a surge of layoffs post-9/11. Federal law provides the borrower two years to repay the debt before a mandatory federal FUTA tax assessment is levied to make up the debt.
The state defaulted on the federal loan in November 2004. As a consequence, NYS employers are required to pay additional Federal Unemployment Tax Act (FUTA) contributions in both 2004 and 2005. The 2005 extra surcharge - or credit reduction- in FUTA contributions is 0.6% of wages subject to NYS Unemployment. This additional assessment amounts to a maximum of $42 per employee for the year. The increase amounts to a 75% increase in an employer's FUTA expense.
Monday, December 05, 2005
Wage Test Increases for Domestic Employers
Effective for fiscal year 2006, the wage test that obligates the nanny employer (or any household employer) for the withholding and remittance of Social Security and Medicare taxes increases to $1500 of wages paid in the calendar year.
The Internal Revenue Service will require payroll tax filings by a any domestic employer who pays a household employee more than $1500 cash wages in a calendar year 2006.
Legislation enacted in 1994 dramatically modified the tax code, changing both the way the household employment taxes are remitted to the IRS, the potential penalties for non-compliance, and the amount of wages paid to obligate the employer for the remittances. Congress made provisions for periodic adjustments of the wage test that obligates the household employer to remit Social Security and Medicare taxes on wages that they pay their household workers. Until 1994 the wage test obligated employers who paid a household worker $50 or more in a quarter to Social Security and Medicare (FICA) taxes. View historical values.
