Nanny Tax & Payroll Updates! HomeWork Solutions

(Atherton CA) Sakhawat and Roomy Khan's former live in nanny and maid, Vilma Serralta, is suing her former employers, claiming that the Khan's paid her $250 for an 84 hour work week, in violation of both California and Federal minimum wage and overtime statues. Ms. Serralta further claims that she did not receive Wage Statments (Forms W-2) as required by law. The suit will approach $120,000 according tom Ms. Serralta's attorney, Christina Chung.

Nannies and other domestic workers are specifically covered by the Fair Labor Standards Act (FLSA) which provides regulations for both minimum wage and overtime treatment of non-exempt employees.

Ms. Serralta initially made a wage claim through the California Division of Labor Standards Enforcement in August 2007. This is the typical route an employee will take to recoup unpaid wages. Lawyers at the Division of Labor Standards Enforcement began negotiating a settlement with the Khans' attorney. On Feb. 12, 2008 the Khans gave notice that they were ending the settlement discussions, according to the complaint. Serralta, with legal support from the Legal Aid Society-Employment Law Center decided to sue.

In California, domestic employees may not work more than 12 hours in a day and may not be required to work more than 5 days per week. Such rules will vary among states. Both state and federal law requires the payment of minimum wage. State and federal labor laws apply to all workers, regardless of legal work status.

Ms. Serralta's case has become a cause célebrè of the San Francisco-based Workers' Advocacy Project, which claims to have opened 125 such cases in 2007. They staged a protest on Thursday March 13 in front of the Khan's $17 million dollar Atherton residence which attracted local media and television cameras in their attempts to publicize the case and make other domestics aware of their rights and the resources that exist to help them.

Labels: nanny minimum wage, nanny overtime pay, nanny sues employer

These nanny agency screening questions will help you choose or select the best agency for you.

Not all nanny referral agencies are created equal. Many reputable agencies have been serving clients for years, are active in professional and trade associations, and truly strive to make the best match for your family. Some are well meaning but simply inexperienced or lacking the resources (generally manpower) to effectively meet your needs. A small number are simply interested in the bottom line - move them in, move them out. The following suggested interview questions should be directed to the agency BEFORE you retain them.

1. HOW LONG HAS YOUR AGENCY BEEN IN BUSINESS? While new is not de-facto bad, experience is a reasonable predictor of success.
   
   


2. HOW MANY NANNIES DO YOU MATCH WITH FAMILIES IN A MONTH (YEAR)? You want an agency that makes enough matches to be economically viable, but not a meat market. Three to six matches per employee per month is a minimum number. Also helpful, how many of the nannies and families are repeat clients.
   
   


3. WHAT IS YOUR SUCCESS RATE WITH PLACEMENTS? Listen carefully for what you don't hear. No one is perfect, and it is unlikely that 'We have never had a failed placement' is true. Why do they think they are successful? Why do they think some placements haven't worked out? Key: Look for an agency that carefully interviews the family and can restate your needs and expectations.
   
   


4. WHAT ARE YOUR FEES? WHAT IS YOUR REFUND POLICY? Fees vary considerably across the country, and you should clearly understand the retainer and fee payment policies. 10 - 15% of the nanny's annual salary is an average range. New agencies typically have the lowest fees in the market, this is to offset for the perceived inexperience. Refund policies vary all over the place. Many agencies will pro-rate their fee on unsuccessful placements, others will never refund but might agree to replace the candidate at no cost within a limited period of time. Whatever the policy, make sure you understand it and that it is in writing. The better agencies will make every reasonable effort to please the client, providing that the client's expectations are equally reasonable.
   
   


5. WHAT IS YOUR SCREENING PROCESS? DO YOU PROVIDE ME ANY DOCUMENTATION ON SCREENING? A good agency will verify the employment history of prospective nannies, and generally contact (via telephone) some or all of the personal references provided. Skilled interviewers will try to determine the accuracy of the employment application, as well as the temperament and historical job performance of the candidate. Criminal and driving checks are generally not ordered until after you have extended a contingent offer of employment and it has been accepted by the nanny. Is the agency compliant with the Fair Credit Reporting Act? You should expect that the agency will share with you, in writing, the results of the prescreening, including the interviewer's impressions. You should also personally check the references of any candidate you genuinely feel you will make an offer to ... but don't exercise the people willing to give references if you aren't serious about the candidate.
   
   
   Inquire about the specifics of the criminal background checks being done. This is VERY important, as the quality of this service varies tremendously among agencies. Be wary of responses such as "We do nationwide criminal background investigations." There is a very good FAQ about Nanny Criminal Background Searches that you should read to learn more about this subject.
   
   


6. DO YOU HAVE TRAINING OR SUPPORT PROGRAMS FOR YOUR NANNIES?Look for the agency that will organize quarterly Red Cross CPR training, arrange an annual picnic for the nannies, or provide the newly placed nanny with a list of names and phone numbers of other nannies in their area. Look for the agency that provides the nanny with written material to help her adjust to her job ... job description, a daily log format, child development milestones, toilet training tips, and things of that nature. Some agencies assemble and print this material themselves, others rely on commercially published materials available in the industry. Not only do these activities help you and your nanny, they also show the commitment of the agency to the nanny, a commitment that will translate into experienced nannies who will return to that agency for their next job.
   
   
   


7. HOW DO YOU RECRUIT YOUR NANNIES? Standard responses can be newspaper advertisement, both local and in remote areas, internet recruiting either via their company website or utilizing a variety of national services, job fairs, college career centers, and outreach to daycare centers and pre-schools. The experienced agency will get returning nannies that they placed a few years ago, and word of mouth referrals from those nannies. These more experienced agencies often have more experienced candidates in their pool. Still others, particularly in urban areas, utilize recruiters in more rural areas to recruit and prescreen live-in nanny candidates.
   
   


8. WHAT TYPE OF AFTER-PLACEMENT PROGRAMS AND SUPPORT DO YOU HAVE? Successful agencies will go out of their way to insure that you and the nanny have the tools you need to enjoy a long term, successful placement. Most will work with the family to draft a work agreement that stipulates all the terms of employment for the nanny and will require that this agreement be formalized before the nanny actually starts work. The agency should touch base with both you and the nanny at the end of the first week and first month to gauge the satisfaction with the match. Often the agency will elicit feedback from the nanny that she is afraid to tell you directly. This 'go-between' role is critical to the long term success of the placement.
   
   
   The agency should also be able to provide you with business referrals for services you will need after the nanny is hired. These include nanny payroll and tax services, nanny health insurance, and workers' compensation insurance providers.
   
   


9. WHAT REFERENCES DO YOU HAVE THAT I CAN CHECK? Don't just ask for client references, check them out. Don't be afraid to ask your co-workers, friends and colleagues for referrals - the unsolicited reference is often the most honest one.
   
   


10. DOES YOUR AGENCY HAVE ANY PROFESSIONAL AFFILIATIONS? The experienced, professional agency knows that maintaining membership in one or more professional associations helps them stay up to date on the latest trends and issues in the nanny industry. Among these are the International Nanny Association, the Alliance of Professional Nanny Agencies, and the National Association for the Education of Young Children (NAEYC). Many agencies are also active members of their local Chambers of Commerce, Rotary International and similar small business associations.

HomeWork Solutions, Inc. (4nannytaxes.com) is the nation's leading nanny payroll and tax preparation service. We support the International Nanny Association and its efforts to bring excellence to the in home childcare industry.

Labels: domestic placement agency, nanny agency, nanny placement agency, nanny referral

Millions of Americans prepare and submit their annual income tax returns to the IRS in the weeks leading up to April 15 - AKA "Tax Day." Several hundred thousand taxpayers owe "nanny taxes", the employment taxes associated with their employment of a nanny, housekeeper, or regular babysitter. The IRS estimates that 800,000 or so of these otherwise law abiding citizens will fail to report these wages and pay these taxes.

2008 is a bit different, because for the first time we have $300 - $1200 tax refunds available to these household workers IF they file an income tax return. The college student who nannied over the summer and earned $4000 will quickly realize that the tax refund exceeds their liability and will actually WANT to file the tax return. Ditto for the $75 a week housekeeper. Free money anyone?

Families can avoid IRS penalty and interest charges, as well as enjoy preferred FUTA rates if they report and pay these taxes on or before April 15.

Nannies and other domestics who want to "get right" with the IRS have several options when the family fails to provide a W-2 form. Each of these options results in the family entering into a pen pal relationship with the IRS, and the eventual payment by the family of the back taxes, penalties and interest charges. It is not a pleasant position for the family to be in.

Families are encouraged to contact HomeWork Solutions to discuss their situation and available options with a client service representative.

Labels: nanny tax evasion, nanny tax filings, tax rebates