Nanny Tax & Payroll Updates! HomeWork Solutions

The New York State Assembly is now considering the Domestic Workers Bill of Rights (S. 5235). This legislation, the first statewide legislation of its type, would extend many labor protections to domestic workers who have long been exempted for most labor protections.

Specifically , the proposal includes the following:

1. A living wage, phased in from $12 to $14 per hour by 2010.



2. Employer choice to provide health care coverage or a wage supplement of an additional $2 per hour.



3. Other basic work standards:




• Time-and-a-half at the regular rate for every hour over 40 hours per week;


• One day off per 7-day calendar week;


• Up to 12 weeks of family and medical leave;


• Paid time off for vacations and holidays;


• Paid sick days;


• Advance notice of termination;


• Severance pay in accordance with number of years worked.




4. A method for domestic workers to enforce these work standards in court.

Legislation of this type drives home the need for families employing domestics to familiarize themselves with the laws governing this employment relationship. Families can protect themselves from unwarranted claims from disgruntled employees by establishing a written work agreement, maintaining accurate and contemporaneous time tracking records, and prompt and accurate wage reporting to the appropriate taxing authorities. HomeWork Solutions offers NaniPay, a payroll service specifically for employers of nannies, housekeepers, maids and elder care workers.

Labels: domestic worker bill of rights, domestic worker payroll, nanny bill of rights, nanny payroll service

The Massachusetts Health Care Reform Plan, signed into law April 12, 2006 by Governor Mitt Romney, requires that all uninsured Massachusetts residents purchase a health insurance plan by July 1, 2007. Failure to do so will trigger a penalty of 50% of the average health insurance plan cost, imposed via state income tax filings.

Reforms in the state insurance market are expected to reduce the cost of individual plans by 24%. Additionally, the 19 -26 year old market will find special lower cost plans made available. Low income individuals will receive subsidies to help with the insurance costs. Individuals with incomes less than $9,800 per year will have no out of pocket expense to purchase the insurance. A single nanny with no dependents earning less than $30,636 may qualify for state assistance in paying insurance premiums. Employers with 11 or more employees are required to make a contribution to the employee's insurance costs of just under $300 per year.

The plan establishes a "Connector" service which acts as a one-stop shopping experience where individual can choose from a variety of plans and compare costs and coverages in one place.

Visit The Commonwealth Connector for more information.

Labels: health insurance nannies, nanny health care, nanny insurance massachusetts

Eldercare companions, those who attend to the personal needs of infirm adults enabling them to live independently at home, have long been exempted from the Fair Labor Standards Act (FLSA) minimum wage and overtime coverages. The Clinton administration attempted unsuccessfully to narrow this exemption to related caregivers. The exemption was challenged judicially in Long Island Care At Home, Ltd., et al. v. Evelyn Coke. In it's June 11, 2007 ruling, the US Supreme Court upheld the exemption and referred the matter to Congress for a legislative remedy. It is uncertain whether a Congress preoccupied with the Iraq war and immigration reform issues will take this matter up.

As a practical matter, very few unrelated caregivers will provide companionship services at below minimum wage levels, even when room and board are offered as an inducement. The employee turnover rate in companionship care is estimated by the industry to be 40 - 60% annually, largely due to poor wages. Companionship services are often provided by low-skilled women, often immigrants, with few employment options. Many states -- including Colorado, Illinois, Kansas, Michigan, Minnesota, Nevada, Pennsylvania, Washington and Wisconsin -- have separate minimum wage and overtime laws that apply to home care workers including companionship services (Los Angeles Times, 6/12/2007).

Labels: companionship services, eldercare companions, home workers, long-term care-workers

Many families with elementary school aged children turn to summer nannies to provide childcare during the summer vacation. These are generally college students themselves on vacation. Other families use part time nannies - one, two or three days a week. Some mistakenly believe that part time or temporary work is exempt from employment taxes.

The family who pays the summer or part time nanny $1500 or more in the year IS subject to all of the same tax rules and filing requirements as employers of year round full time and part time household workers. These include Social Security and Medicare Taxes (15.3% of wages paid) as well as Federal and State unemployment taxes.

There are some limited exceptions for the occasional babysitter, particularly those under 18 years of age. The term occasional, however, is limited to less than $1500 in wages paid per year UNLESS the caregiver meets one of the stated exceptions. See the exceptions stated here.

A consequence of the scheduled July 24, 2007 increase in the Federal minimum wage is that au pair stipends will increase simultaneously.

The Department of Labor has not yet published their official guidance. In the past the au pair stipend has been calculated on the following formula:

(Federal Minimum Wage * 45 hours/week) - 40% credit for room and board.

Using this formula, the standard au pair stipend would increase to $157.95 weekly effective 7/24/2007.