TLC Family Care has always asked families and nannies to complete a work agreement before the nanny begins. Our friends at Breedlove and Associates share with us why the nanny work agreement or nanny contract is so important.
Hiring a nanny can be both exciting and nerve-wracking, especially for ultra-busy, sleep-deprived families. Often, the obsession with finding the perfect caregiver causes families to overlook important employment details.
A Virginia family began searching for a nanny to care for their new bundle of joy. After an emotionally-draining 6-week quest to find the ideal nanny, they hastily agreed — verbally — on a work schedule and hourly rate. The nanny started work the next day without any kind of written agreement in place.
In some jurisdictions, a basic employment agreement is legally required. Whether required or not, we highly recommend that families use a placement agency or an attorney who can facilitate a comprehensive contract between family and nanny.
The discipline of drafting detailed job responsibilities, house rules, emergency procedures, work schedule, vacation/sick time procedures, compensation, pay frequency, communication/review procedures, etc. radically reduces problems and misunderstandings. It also tends to lengthen relationships because it makes the employee feel like a valued professional. Finally, it can be an important and cost-effective means of arbitrating any family/nanny issues.
Within a few weeks, the honeymoon was over:
The family had trouble hiding frustration with the nanny’s housekeeping habits. She was tidying up the baby’s room and kitchen as well as cleaning toys and baby clothes. But the family had expectations of the nanny doing the family’s laundry and light housekeeping.
The nanny resented not getting paid for Labor Day. She needed the money and had assumed that she’d get paid for major holidays.
When the nanny got her first pay check, she was confused by the tax withholding’s. She thought the agreed-upon amount would be her “take-home” pay.
The family talked to friends and did some online research into the typical duties of nannies. They quickly realized that nanny job descriptions vary wildly and that they had done a poor job of articulating their desires at the beginning of the search process.
Similarly, although the family had done some research on household employer tax and legal obligations, they had not discussed the compensation and benefits offer at the appropriate level of detail for their nanny.
Despite the rocky start, the family really liked the way the nanny took care of the baby so they made a considerable effort to keep her. They created an employment agreement and sat down with her to discuss all the “relationship details” they should have discussed a month earlier.
Unfortunately, the nanny took another job shortly after their meeting. She did not feel valued or respected and opted for a fresh start with another couple.
The family hired their next nanny through one of our agency partners. The agency used a thorough job description process to focus the search on nannies who met the family’s expectations. After a comprehensive vetting process, the agency held the family’s hand through an employment agreement that left no room for misinterpretation or confusion. It’s been almost 18 months and the relationship is going strong.
How the Whole Thing Could Have Been Avoided
When searching for household help, busy families are tempted to take short cuts. Aside from being pressed for time, it can feel somewhat awkward to have a formal contractual agreement with someone with whom there is such a personal relationship.
However, in our experience, the formal work agreement is the single-best predictor of the long-term success of the relationship. Without one, the relationship almost always seems to be rife with misunderstandings and resentment. With one, the relationship enjoys clear direction and increased professionalism.
We encourage families to retain a reputable placement agency that can guide them on employment agreements and other important aspects of due diligence involved with household employment. It dramatically enhances the odds of an endearing and enduring employment relationship.
If you have additional questions about this or any other aspect of household employment tax and labor law, visit them online.
Stepping Out of Your Comfort Zone … One Baby Step at a Time
By Glenda Propst
Nannies have a rich and lengthy history that spans hundreds of years. The title and job duties of a nanny have evolved and continue to evolve even to this day.
The professional nanny movement that began back in the early 1980’s culminated in 1985 with the founding of the International Nanny Association. As a founding board member of INA, I realize that my roots and commitment to my profession were solidified within this association.
I had always been committed to what I did. I had always been dedicated to improving my profession. But being able to connect with other professionals from across the United States and even abroad, introduced a whole new frontier to this country girl who grew up in a small Midwestern town.
Being involved with the nanny profession on a national level has taught me many lessons. Some lessons have been harder to learn than others, but the most important lesson that I have learned is that as far as our profession has come, we still have so far to go.
I belong to the pioneering generation of the professional nanny industry. My involvement with INA connected me to a bigger part of the nanny world and made me realize that I could not simply be an observer of our industry; I had to step out of my comfort zone and be a leader within it.
I can’t tell you how important it is for each of us to be involved in our profession in a bigger way. While we may say that we want the nanny profession to be recognized, respected and revered, for that to happen it requires each of us to step out of our comfort zone.
The nanny industry is multi-faceted. The issues that we face as nannies are different than the issues agencies and educators face, but as an industry, we need to work together to change the future. While we may not always agree on everything, we can agree that there is work to be done and if we want results, we have to do the work together. As members of our industry, it is up to us to push towards our common goals that will result in progress for our industry.
I cannot imagine how different my life would have been if I had not been influenced, supported, encouraged, enlightened and inspired by the people I met when I stepped out of my comfort zone. As professionals, it is our responsibility to educate ourselves on industry issues and then to speak out or take action.
Make your profession a priority. Keep educating yourself; keep learning and never stop growing.
I encourage you to make plans to attend the INA Annual Conference in Las Vegas, Nevada May 3-6, 2012. If you are new to INA and you have never attended an Annual Conference, you are eligible to attend at 1/2 price. If you are a current member who has never attended an Annual Conference, there will be several scholarship opportunities I urge you to take advantage of. The Annual Conference room rates are extremely reasonable this year and Las Vegas is a wonderfully fun location.
So this year take a chance. Step out of your comfort zone and attend the 2012 INA Annual Conference.
It just might change your life.
Mileage Reimbursement: Asleep At the Wheel
It’s very common for families to ask their employee to perform job tasks using her own car (i.e. errands, drop-offs, pick-ups, etc.). With the high price of gas, mileage reimbursement has become an increasingly important line item on the paystub. This case helps families understand the law regarding mileage reimbursement and how to handle it correctly.
The Smith family had been employing a nanny, Sarah, in Washington, D.C. for about two years. As the family’s needs changed, they asked Sarah to drive their son to his different lessons and extra-curricular activities each week. They asked Sarah to take on this extra responsibility and told her they would raise her hourly rate by $1 if she agreed to drive her own car. Based on a rough estimate of the expected mileage, they thought that a $1 per hour raise would be sufficient to cover the cost of gas. Sarah thought it was fair and reasonable and agreed to it.
Although federal law does not require an employer to reimburse an employee for mileage, the law is stricter in some states. In Washington D.C. for example, the law requires employers to reimburse their employees for all business-related travel expenses incurred as part of the job.
The IRS has established a mileage reimbursement rate that employers should use for employee-driven miles. The rate covers the cost of gasoline as well as general wear and tear on the vehicle. The mileage reimbursement rate is currently set at 55.5 cents per mile.
The IRS does not view mileage reimbursement as compensation and, therefore, it is not taxable to the family or the employee.
Note: Miles driven to and from the job site each day are not considered “on the job.” Any reimbursement for those commute miles is considered compensation and would be subject to taxation.
Even though Sarah agreed to the “raise” and both thought it was a fair and reasonable amount, adding the mileage reimbursement to her “straight” wages ended up hurting both parties.
First, the payments were not accurate. Occasionally, Sarah drove fewer miles than expected and the compensation worked in her favor, but usually there were numerous unexpected errands totalling 30-50 miles per week that Sarah handled without any incremental compensation. Additionally, Sarah was taxed on the mileage pay and, therefore, only pocketed about $0.80 of every dollar. Between the taxes and the unexpected miles, Sarah’s “raise” did not adequately cover her job-related auto expenses.
Because it was handled as “straight” wages instead of a non-taxable reimbursement, the family had to pay employer taxes on every dollar. So, each mileage dollar cost them about $1.10. Worse, the failure to record the mileage appropriately — and reimburse Sarah as required by Washington, D.C. law — exposed the family to a potential legal dispute. If the relationship had ended badly, Sarah could have filed a complaint. The judge would have most likely ruled that she had never received ANY mileage reimbursement (since there was no record of such) and ordered the family to pay her 55.5 cents for every mile.
About 3 months into this new arrangement, Mr. Smith happened to discuss mileage reimbursement with his neighbor who also employs a nanny and uses our service. Realizing that the $1/hour “raise” was a tax and legal mistake, Mr. Smith called us and asked how to fix the situation.
We helped the Smiths figure out the the correct mileage reimbursement for the previous 3 months and reconcile the difference with his employee and the tax agencies. We also produced paystubs reflecting the correct mileage and mileage reimbursement so that both parties would have proper documentation.
How the Whole Thing Could Have Been Avoided
Knowledge is power. The Smith family ended up spending more on wages and taxes than they needed to — all because they didn’t have good guidance on the financial, legal and HR aspects of household employment. Fortunately, in this case, the mistake was relatively small and discovered early.
To help families avoid all of the tax and legal potholes, we continue to invest in educational resources and complimentary consultations. Whether families use our service or not, this 10-minute phone call almost always saves time, money and frustration.
If you have additional questions, please call 888-BREEDLOVE (273-3356)
or visit www.myBreedlove.com. We’re here to help our agency partners
provide clients and candidates with information, tools and resources
that improve the employment relationship, eliminate legal risk for all parties,
and increase the professionalism of the industry.
Families everywhere are tightening their belts and saving money wherever they can. With the help of the internet, people can do almost everything themselves. For some families that means finding your own nanny or babysitter. Thousands of parents use websites to search for nannies and babysitters. These sites give parents immediate access to sitters in almost every city across the country. But what kind of screening can these low cost websites really provide?
Jordan Liu a 19 year old male was arrested November 22nd on sexual assault charges. He is accused of molesting two young Glendale California boys. Liu was the family’s once-a-month babysitter for almost eight months. The family hired him using sittercity.com. Sittercity.com does an instant background check and cross references the applicants name with state run sex offender’s registry.
While using a web based childcare matching service or Craigslist may be quick it is not the safest option for families. Traditional brick and mortar agencies still provide the best option for families. If you prefer to conduct the search on your own please be aware of the screening promised by the website.
Instant background checks do not cover all jurisdictions. Employers also need to go back to every state and country where the nanny has previously lived and check those records too.
Findthebestnanny.com is the only web based nanny agency that doesn’t subscribe to instant background checks. When employers register with us they understand that we do not screen any of our candidates. How could an agency properly interview, screen, and run background checks on hundreds of candidates instantly
Instead we give the parents the tools and education needed to do the search themselves. And if in the end parents decide that they would like to hire a traditional agency to conduct their search they can use our parent company TLC For Kids, Inc.