Follow-up: Contracts Required with Nannies in Montgomery County (MD)

The Montgomery County (MD) Council is creating quite a stir with it's new "Nanny Contracts" law.

One point missed in yesterday's media is that the county will be drafting and publishing a model work agreement and disclosure statement. I believe the only substantial difference between the eventually published model and the sample nanny work agreements published at 4nannytaxes.com will be the disclosure statement to the effect that nannies and other domestics are protected under various state and federal laws. Chief among these in Maryland is the requirement to pay live-in domestics an overtime differential (referred to as time and a half) for all hours worked in a week over 40. This is a more strict requirement then offered by the Federal Fair Labor Standards Act (FLSA).

We will keep you posted as developments occur. This blog was picked up by the Washington Post article on the nanny contracts legislation today, pointing out that Montgomery County MD has the highest filing rate of nanny tax returns of any jurisdiction in the nation.

Nanny Work Agreements or Contracts the Law in Montgomery County (MD)

The Montgomery County (MD) Council has unanimously approved the 'Nanny Bill' today (7/15/2008) and County Executive Isiah Leggett (D) is expected to sign this measure into law. The bill requires household employers in Montgomery County to have a written work agreement that clearly states the job description, wages and benefits for their household employees. Employers of live-in domestic help are required to provide a private room with a lock and reasonable access to bathroom, kitchen and laundry facilities.

Montgomery County is the first in the nation to pass a bill designed to protect the household employee. It aims to protect nannies and other domestic workers against unfair wage practices, and insure overtime compensation. Other jurisdictions considering such legislation include San Francisco and New York City. Once the Montgomery County 'Nanny Bill' becomes a law, household employers will have six months to comply with the new rules or face up to a $1000 fine per violation.

Interestingly, according to IRS statistics, nanny tax compliance in Montgomery County MD is the highest in the nation at 1238% the national average filing rate (Tax Year 2003). Montgomery County includes the Washington DC suburbs of Potomac, Bethesda, Chevy Chase and Silver Spring.

HomeWork Solutions has long advocated that a written nanny work agreement is a best practice to protect both the worker and the employing family. It's article Ten Tips for Writing the Nanny Work Agreement is one of their more popular website downloads.

Mandatory Work Agreements for Nannies?

The Montgomery County (MD) Council is considering a proposal to make employment agreements mandatory for in home workers employed by the same family for 20 hours or more per week, according to a January 26 report in the Washington Post.

The work agreements would memorialize the terms and conditions of employment, as well as be required to state the state and county protections the domestic workers are entitled to (including minimum wage, overtime for hours over 40 in a week, a private room with a lock for live in workers, unemployment and worker's compensation insurance).

Violations would be subject to a $1000 per violation fine. The covered workers include nannies, housekeepers, cooks, and elder care workers.

The bill requires the approval of the County Council and the County Executive to become law.

Interestingly, according to IRS statistics, nanny tax compliance in Montgomery County MD is the highest in the nation at 1238% the national average filing rate (Tax Year 2003). Montgomery County includes the Washington DC suburbs of Potomac, Bethesda, Chevy Chase and Silver Spring. The estimated median home/condo value in Chevy Chase in 2005 was $1,054,100.