Using a nanny has many authorized pitfalls. For the unwary, the pitfalls can lead to employment disputes, fines, audits, and even lawsuits. Many mother and father do not take into consideration the authorized pitfalls till it is too late, corresponding to when they’re sued or obtain an audit discover within the mail https://www.dcmobilenotary.com/i-9
Listed here are 5 of the highest authorized pitfalls:
1. Treating your nanny as an unbiased contractor. The IRS has strict guidelines for whether or not a employee is an unbiased contractor or an worker. Staff, in contrast to unbiased contractors, should have sure taxes paid on their wages. Failure to pay these taxes could end result again taxes owed in addition to financial penalties. In practically all instances, the IRS treats nannies as workers. That is as a result of mother and father management the nanny’s work schedule and job duties, amongst different issues.
2. Failing to pay taxes. As a result of nannies are workers, mother and father and a nanny every owe Social Safety and Medicare taxes on the nanny’s wages. Traditionally, a nanny’s share of these taxes has been 5.65%, and the mother and father have had an identical employer share of seven.65%. Dad and mom may be answerable for paying federal unemployment tax, in addition to numerous state taxes. Tax points are advanced, so mother and father ought to seek the advice of knowledgeable tax advisor or lawyer to make sure authorized compliance.
three. Failing to pay time beyond regulation. Below federal regulation, nannies are handled as non-exempt workers. Which means they’re topic to minimal wage and time beyond regulation legal guidelines. Dad and mom due to this fact should preserve a document of hours labored and pay time beyond regulation. That is true even when a nanny is salaried. Dwell-in nannies, nonetheless, are exempt from the time beyond regulation necessities. To find out time beyond regulation necessities, mother and father ought to contact the federal division of labor. Dad and mom must also contact their state division of labor, as many states have necessities on high of federal guidelines.
four. Failing to confirm work eligibility. Dad and mom are employers, as famous above. Thus, they have to confirm that their nanny is eligible to work in the USA earlier than using her or him. To take action, mother and father ought to full Type I-9, referred to as “Employment Eligibility Verification. For extra data, mother and father ought to contact U.S. Citizenship and Immigration Providers.
5. Failing to set clear job duties. Dad and mom typically suppose nanny, as knowledgeable, is aware of what his or her job duties are. That is a mistake, as mother and father could have completely different views about youngster care. Disputes typically come up when job duties are unclear or not totally mentioned. To keep away from such disputes, mother and father ought to put aside an hour or two on the nanny’s first day to debate job duties intimately.