Lisa Marie's Nanny Sues for Overtime

According to Los Angeles' KTLA-TV, Christine White worked as a nanny for Lisa Marie Presley and Michael Lockwood's infant twins. She has filed suit for unpaid overtime.

There are no details available that this time; however, this is another high-profile cautionary tale to families hiring nannies.

Nannies are covered by the Fair Labor Standards Act (FLSA) and are entitled to several workplace protections, including payment of overtime (time and one half) for hours worked over 40 in a work week. Some limited exemptions apply to live in nannies.

Families can protect themselves from this type of claim made by a discharged nanny by doing the following:

1. Explicitly state the nanny's hourly wage in a written work agreement.


2. Maintain accurate, contemporaneous time tracking records.


3. Be certain to pay for all hours worked. Hours worked include any time that nanny is not free to leave the premise for 30 minutes or more - this would include nap time,and on call time.

The Frequently Asked Questions at the 4nannytaxes.com website deals with the FLSA and nanny labor rules in detail.

Swiss to Reveal Owners of 5000 Secret Accounts

The IRS has been involved in litigation with the Swiss bank UBS seeking account information on approximately 52,000 Swiss bank account holders suspected of US tax evasion.

On the domestic front, the IRS has offered immunity from criminal penalties to taxpayers who voluntarily disclose their off-shore banking arrangements and pay the back tax and penalties due on the previously unreported income. According to the IRS, in June 2009 approximately 400 taxpayers came forward voluntarily, while less than 100 did so in all of 2008. IRS clemency for off-shore tax evaders will expire September 23, 2009.

Tomorrow the US and Switzerland will ink a deal that will result in the disclosure to the IRS of ownership information on more 5000 (10%) of the accounts in question. The Wall Street Journal reported last week that "that many of those who confess are likely to pay 40% or more of the total account value in taxes, penalties and interest, plus state taxes, penalties and interest." The article continues by summarizing congressionally authorized "taxes and penalties on a hypothetical $1 million at $2.3 million, plus interest and the possibility of criminal prosecution" for those the IRS catches up with independently.

There is no statute of limitations in the tax code for fraud. This applies equally to off-shore tax evaders and to families and nannies who fail to disclose and pay the employment taxes and income taxes on wages paid to the nanny or other household employer. Our experience has always been when overall tax revenues decrease, enforcement action steps up considerably.

Nanny Shares - What Works?

Families considering sharing a nanny - known as a Nanny Share - are on the rise as family struggle to contain their childcare expenses. These arrangements, while financially attractive, come with their own set of complications.

HomeWork Solutions has published a new tips sheet titled Ten Tips: Nanny Share Agreements to highlight important considerations for the nanny share agreement.

The tip sheet addresses the sticky wicket areas that so often cause a share to fall apart, including compensation issues, nanny tax concerns, vacation and sick time concerns, overtime compensation, and planning for the end of the nanny share.

Do you have advice or lessons learned to share with families and nannies considering these nanny share arrangements? I invite you to leave your comments below.