Nanny
employers, as well as employers of other types of domestic
workers, need to be very careful in their definition of
weekly wages in an employment contract to protect
themselves against wage and hour disputes with disgruntled
employees. The following examples are provided to
illustrate how a compliant work agreement can be crafted.
Employers
who state their domestic employee's pay only in terms of a
weekly salary run the risk of having a court interpret
this as a standard salary for a 40-hour workweek.
Remember, domestic employment by definition is non-exempt
employment. This means you cannot offer a salary that
covers any number of work hours, but must pay overtime for
hours worked above 40 in a week. By structuring the work
agreement with wages paid at an hourly rate and by
agreeing to a guaranteed weekly minimum, the family is
protecting itself from possible wage disputes and meeting
the nanny's desire for a predictable weekly wage.
GROSS
vs. NET and Taxes
When
discussing salary with your nanny, be VERY careful to
distinguish between gross wage [before taxes are deducted]
and net wage [the amount of the check or the amount you
give her in cash]. It should be clearly understood whether
you are withholding income taxes or not. Social Security
and Medicare taxes ("the Payroll Taxes") are
your responsibility to send to the IRS; be clear about
whether you are deducting her portion from the gross or
not.
Nanny
Insurance and Tax Issues
Depending
on your nanny's needs, you may want to consider worker's
compensation, health insurance, life insurance, disability
insurance, or automobile insurance. You may want to
discuss your insurance needs for a nanny (worker in your
private residence) with an insurance agent.
An
additional option would be to contact an agency such as:
Eisenberg
Associates (International Nanny Association-Official
Representative) Toll
Free: 1-800-777-5765; Web site: www.eisenbergassociates.com
Many
families have questions concerning taxes for nannies or
other personal employees in the household. These questions
call all be answered by contacting either of the well
recommended agencies bellow:
GTM
(Household Employment Experts) 888-432-7972 www.gtmassociates.com/
HomeWork
Solutions Toll
Free: 1-800-626-4829; Web site: www.4nannytaxes.com
LINKS
FOR TAXES
4
Nanny Taxes www.4nannytaxes.com
GTM
Nanny Payroll & Taxes www.gtmassociates.com
Arizona
Tax Laws www.revenue.state.az.us/rulings/wtr93-2.htm
