Tuesday, February 20, 2007
Workers Compensation Insurance
If Available, Get It!
Many states mandate that household employers obtain a Workers Compensation Insurance Policy. The legal requirements for obtaining this insurance vary widely from state to state, with wages paid or hours worked usually the defining item, not job description.
Workers compensation insurance protects the domestic employee and the employer from the expenses and liabilities associated with a work-related accident. A single accident can leave the employer liable for thousands of dollars in medical bills. Don't assume that this liability is covered under your Homeowner's Insurance Policy!
I have been working with a client for the last week or so who has a claim pending. The nanny slipped on the stairs and hit her head on a balustrade on her way down. The nanny was dazed and her frightened 5 year old charge called 911. The nanny was taken to the emergency room and a concussion was eventually diagnosed. After about 8 hours at the hospital, she was released to her husband's care and advised to follow up with her regular physician the next day. All in all, the nanny will be fine and the employer got off relatively lucky too.
Total costs are not in yet but look like they will be in the $1000 - 2000 range. This client did not have the state mandated Worker's Compensation insurance (Maryland) and is personally liable for these costs. Yes this is a large unplanned expense, but it could have been much, much worse. This client is a licensed medical professional, and I suspect the amount of lost client billings for the time she has spent over the last several days dealing with this will exceed her out of pocket costs.
The US Department of Labor has compiled a list of workers compensation insurance requirements by state as they apply to household or domestic employment. The link is here.
Workers compensation insurance protects the domestic employee and the employer from the expenses and liabilities associated with a work-related accident. A single accident can leave the employer liable for thousands of dollars in medical bills. Don't assume that this liability is covered under your Homeowner's Insurance Policy!
I have been working with a client for the last week or so who has a claim pending. The nanny slipped on the stairs and hit her head on a balustrade on her way down. The nanny was dazed and her frightened 5 year old charge called 911. The nanny was taken to the emergency room and a concussion was eventually diagnosed. After about 8 hours at the hospital, she was released to her husband's care and advised to follow up with her regular physician the next day. All in all, the nanny will be fine and the employer got off relatively lucky too.
Total costs are not in yet but look like they will be in the $1000 - 2000 range. This client did not have the state mandated Worker's Compensation insurance (Maryland) and is personally liable for these costs. Yes this is a large unplanned expense, but it could have been much, much worse. This client is a licensed medical professional, and I suspect the amount of lost client billings for the time she has spent over the last several days dealing with this will exceed her out of pocket costs.
The US Department of Labor has compiled a list of workers compensation insurance requirements by state as they apply to household or domestic employment. The link is here.
Labels: nanny injury, nanny insurance, workers compensation
Saturday, February 17, 2007
San Francisco: Mandatory Paid Sick Leave Applies to Nannies
This post is a follow up to my December 4, 2006 post concerning San Francisco's new paid sick leave ordinance (Proposition F) passed by city voters in November 2006. While the rules clarification on the mandatory Paid Sick Leave ordinance remain a work in progress, the concensus is that this law DOES apply to household employers.
The new law went into effect February 5 and requires that all employers with 10 or fewer workers doing business within the city limits to offer as many as five paid sick days per year per employee. (Larger employers pay up to 9 days per year.) Employees accrue one hour of paid sick leave for every 30 hours worked, according to the ordinance. Paid Sick Leave takes effect once an employee has been onboard for 90 days, and requires employers to keep records of leave accrual and use for four years.
Quoting from the San Francisco Chronicle:
"City officials in charge of enforcing the law said it applies to household workers like Castellanos who are hired off the books as well as those who are hired legally.
"If someone is paid under the table and files a complaint, we don't care how they're paid," said Donna Levitt, who heads the city's Office of Labor Standards Enforcement. "If you're an employee, you're entitled to sick leave."
By requiring employers to track hours worked and keep those records for years, the law requires more paperwork than many household employers are used to.
The new law went into effect February 5 and requires that all employers with 10 or fewer workers doing business within the city limits to offer as many as five paid sick days per year per employee. (Larger employers pay up to 9 days per year.) Employees accrue one hour of paid sick leave for every 30 hours worked, according to the ordinance. Paid Sick Leave takes effect once an employee has been onboard for 90 days, and requires employers to keep records of leave accrual and use for four years.
Quoting from the San Francisco Chronicle:
"City officials in charge of enforcing the law said it applies to household workers like Castellanos who are hired off the books as well as those who are hired legally.
"If someone is paid under the table and files a complaint, we don't care how they're paid," said Donna Levitt, who heads the city's Office of Labor Standards Enforcement. "If you're an employee, you're entitled to sick leave."
By requiring employers to track hours worked and keep those records for years, the law requires more paperwork than many household employers are used to.
Tuesday, February 06, 2007
2007 Nanny Payroll: By the Numbers
- $1500 - The wage threshold that obligates a family to pay the "Nanny Taxes." These include Social Security and Medicare, and may include Federal and State Unemployment taxes.
- $1712 - The maximum amount of advanced earned income credit a nanny (with at least one qualifying child) may receive in 2007. The nanny must also be expected to earn less than $33,241.
- 48.5 cents per mile - the standard mileage rate, which families often use to reimburse nannies on a tax-exempt basis for the business use of the nanny's personal automobile. This includes transporting the children in their care and family errand-running.
- $110 - The tax-exempt monthly amount a family can provide to a nanny for qualified transit passes or van pool fees.
- $215 - The tax-free monthly amount a family can provide to a nanny for qualified parking benefits.
- $5,250 - The annual tax-exempt limit for employer-provided educational assistance.
- $1,100 - The amount per employee that a family may be charged for willful violations of the minimum wage and overtime requirements of the Fair Labor Standards Act. Nannies and other domestic workers ARE explicitly covered by the FLSA.
Labels: nanny fringe benefits, nanny tax threshhold, non-taxable nanny benefits
