FLSA Changes Affecting Caregivers and Employers

flsa changes for caregivers and employersAs of January 1, 2015, the Final Rule created under the Fair Labor Standards Act (FLSA) will require most direct care workers to receive federal minimum wage and overtime pay protections. Direct care workers are workers who provide home care services, such as home health aides, personal care aides, senior caregivers, and companions. The Final Rule contains several significant FLSA changes affecting caregivers and employers, including the following:

1. The Department of Labor defines “companionship services” by the duties that home care services cover, including:

  • Engaging the person in social, physical, and mental activities including reading, games, running errands, and social events.
  • Activities of daily living such as dressing, grooming, feeding, and bathing.
  • Instrumental activities of daily living such as meal preparation, driving, light housework, and arranging medical care.

The definition of companionship services does not include providing medically related services which are typically performed by trained personnel.

2. Who can claim the overtime exemption?

Exemptions for companionship services and live-in home care workers are limited to the individual, family, or household using the services. Third-party employers (home care agencies) will not be able to claim a minimum wage or overtime exemption. Workers are only exempt if they are employed solely by a home care recipient, that person’s family member, or private household, and spends 20% or less of their weekly hours per care recipient on daily living activities.

3. Recordkeeping requirements have been revised as follows:

  • Individuals and private households that employ live-in home care workers can claim the overtime exemption for live-in domestic workers. However, if they reside in a state whose Department of Labor has dictated an overtime wage law, they must follow their state’s overtime regulations.
  • Third party employers like home care agencies cannot claim the overtime exemption and are required to pay employees at least the federal minimum wage and overtime pay for all hours worked.

For more information about the Final Rule under the FLSA, visit the Department of Labor website.

Holiday Gifts from Nannies to Families

holiday gifts from nannies to familiesEvery year during the holiday season, we provide a list of gift ideas for families that wish to recognize their nanny or other employee in a special way. But we have also heard from household employees who are looking for ideas for holiday gifts from nanny to parents. With some assistance from our friends at GTM Payroll Services, please check out our list of holiday gift ideas for those nannies who wish to show their appreciation for their families at this time of year.

Top 10 Gift Ideas From Nannies to Parents

  1. Photo book with pictures spanning the past year
  2. Coffee mug with gourmet coffee or hot chocolate
  3. Homemade ornaments
  4. Bottle of wine
  5. Free date night babysitting
  6. Free overnight babysitting
  7. Canvas-wrapped photo of the kids
  8. Movie night basket – popcorn and DVD or movie tickets and restaurant gift card
  9. Homemade cookies or other treats
  10. Art projects done with the kids

Let us know of any good ideas that we missed! For more information, please contact us at (518) 348-0400.

Roth IRAs for Teens

roth iras for teensLooking for another way to save on your family’s taxes? Opening a Roth IRA may be a solution. Roth IRAs for minors, especially teenagers, are perfect because they likely have many years to let their accounts grow tax-free. In the example below, look at how much difference starting contributions early can make:

Both Ethan and Hannah contribute $5,500 per year to their Roth IRAs through age 66. But Ethan starts contributing when he gets his first job at age 16, while Hannah waits until age 23, after she’s graduated from college and started her career. Ethan’s additional $38,500 of early contributions results in a nest egg at full retirement age of 67 that’s nearly $600,000 larger!

Total contributions made

Ethan: $280,500
Hannah: $242,000

Balance at age 67

Ethan: $1,698,158
Hannah $1,098,669

Note: This example is for illustrative purposes only and isn’t a guarantee of future results. The figures presume $5,500 is contributed at the end of each year over the ages shown and a 6% rate of return.

The 2014 and 2015 annual contribution limits are the lesser of $5,500 or 100 percent of earned income, reduced by any traditional IRA contributions. Contributions aren’t deductible, but if the child earns no more than the standard deduction for singles ($6,300 for 2015) and has no unearned income, he or she will pay zero federal income tax anyway. If a child’s earned income exceeds the standard deduction, the income likely will be taxed at only 10 percent or 15 percent. So the tax-free treatment of future qualified distributions will probably be well worth the loss of any current deduction.

If your children or grandchildren don’t want to invest their hard-earned money, consider giving them the amount they’re eligible to contribute — but keep the gift tax in mind.

For more information, contact us at (518) 348-0400.

New Year’s Eve is Near!

New year's eve date night

New Standard Mileage Rate for 2015

new standard mileage rateThe IRS has issued the new standard mileage rate for 2015. This rate is used to calculate the deductible costs of driving a vehicle for business. This applies to household employers who choose to let their nanny or other household employee use their car for performing their job duties.

Beginning on Jan. 1, 2015, the standard mileage rate will be 57.5 cents per mile for business miles driven, an increase of 1.5 cents from 2014. Household employers affected by this change should make sure to revise their expense reports and policies accordingly.

Please contact us at (518) 348-0400 if you have any questions.

Holiday Gift Ideas for Your Nanny!

holiday gift ideas for your nannyIt’s that time of year again! People are making their lists (and checking them twice) of all the gifts they want to buy for the holidays. While most of the gifts are usually for friends and other family members, nannies are also – hopefully – included.

According to the International Nanny Association’s “2013 INA Salary and Benefits Survey,” 53% of nannies across the nation received a year-end bonus in 2011. These bonuses include anywhere from a week’s salary to a month’s salary or more. Our affiliate company, GTM Payroll Services, conducted its own survey of their household clients and found that over 95% of them will be giving their nanny a holiday bonus this year.

Offering bonuses and holiday gifts for nannies isn’t just a nice perk for them, it also benefits you as an employer! Providing benefits will help attract and recruit new employees, and create a happy employee, which in turn creates a happy family.

An employer may choose to establish what is commonly known as a “holiday club savings account,” which works like other savings plans. Employees may authorize in writing that a specified amount be deducted from their paycheck and deposited into a holiday club savings account. This account usually runs just a few weeks short of a full year and enables the employee to collect his or her savings in the fall (generally mid-October), when he or she may require extra spending money at this time of year.

Please see the 20 items below for some suggestions on how to recognize and reward your nanny this holiday season!

20 HOLIDAY GIFT IDEAS FOR YOUR NANNY

  1. Cash bonus
  2. Sick/personal/vacation time
  3. Tuition reimbursement
  4. Education/seminar/conference expenses
  5. Cell phone use
  6. Gym/fitness club membership
  7. Health Reimbursement Account
  8. Spa/salon gift card
  9. Entertainment tickets to ball games/movies/shows
  10. Time share/use of a vacation home
  11. Gas card
  12. Grocery store gift card
  13. Purchase of a computer/PDA/I-Pad/cell phone
  14. International Nanny Association (INA) membership
  15. Housing allowance
  16. Shopping gift cards (Target, Macy’s, etc.)
  17. Retirement funding
  18. Education of a dependent
  19. Frequent flyer miles
  20. Clothing allowance

For more information, contact us at (518) 348-0400.

Year-End Tax Planning for Household Employers

year-end tax planningThe end of 2014 is quickly approaching, so it’s important that everything is in order to ensure there are no surprises when it comes time to pay nanny taxes next year. Year-end tax planning isn’t something to put off or ignore. It’s important to look at your finances and think about any changes you will be making for the rest of 2014 and into early 2015. Some things to consider include:

  • Adding/decreasing your employee’s hours during the holiday season
  • Awarding a year-end bonus
  • Adjusting salary for 2015
  • Making note of any minimum wage increases in your state
  • Vacation pay for the holiday season

Also note that for 2015, the domestic employee coverage threshold amount will remain the same as this year – $1,900; this means that you are required to pay taxes if you pay a nanny at least $1,900 for the year. Make sure you keep accurate records of any changes you make, along with any changes to any federal or state tax and wage laws.

Please download this helpful Year-End Checklist for Household Employers from our friends at GTM Payroll Services, and contact us at (518) 348-0400 with any questions you might have.

Our Featured Nanny!

dFor those of you who do not know her, we’d like to introduce you to one of our fabulous nannies, Diane R.!

Known as “Lady Di” to her many kid friends and their families, Diane comes from Lake Placid, New York, where she spent many years as the pre-teen babysitter for most of the town, taking care of kids, cleaning, organizing, and even cooking!

Diane is a graduate of Siena College with a degree in Social Work, and has worked as a midwife and worked in a newborn nursery, emergency room and pediatrics before becoming a full-time nanny.

Diane relishes being a nanny and having the opportunity to teach, nurture, and watch another generation of kids grow!

If you’d like to hire Diane, please contact us at (518) 348-0400.

Black Friday

blackfriday

Snow Days for Families and Their Nannies

snow days for families and their nanniesIt looks like Mother Nature is ignoring the calendar and has started sending winter weather our way with a month still left in fall. If this year’s winter is anything like last year’s, we have lots of snowy days ahead. With that in mind, here are some guidelines for families and their nannies about how to handle snow days.

The first decision that a family must make is what constitutes a “snow day” (or other form of weather-related condition). Many rely on school or government office closings, a “state of emergency” condition, or road conditions. Whatever policy a family decides to adopt, it must be clear to the nanny and should definitively address whether or not a nanny should report for work. This of course can be tricky – a family might think conditions are good enough for the nanny to come to work, but the nanny may feel the roads are too unsafe, for example. When creating a snow day policy, both families and nannies should discuss relevant factors and both points of view need to be considered.

Certain jobs require their employees to report to work regardless of weather conditions, such as emergency medical staff, police officers, etc. In a situation where a nanny works for someone in one of these types of positions, the nanny must report for work so that the employer can do their job. If a heavy storm is predicted, the family may want the nanny to stay overnight the night prior. Hopefully this can be worked out mutually, but ultimately it should be the employer’s decision if the nanny should stay overnight, with as much notice as possible. In such a case where the family requires a nanny to spend the night, the family may wish to compensate the nanny for the extra hours.

Another factor that should be addressed when creating a snow day policy is whether or not the nanny has any dependents (including pets). If the family is open to it, the nanny may bring her child or pet to stay overnight at the family’s home. Alternatively, the employer may provide extra monetary compensation so the nanny can arrange for backup care.

Some families may choose to offer paid time off for bad weather days, if it’s not critical that the nanny report to work on a given day. Others may just count a snow day as a personal day, and follow their predetermined pay schedule in such an instance. Some families may still want the nanny to come to work even if the employer is working from home or has the day off. Part of the snow day policy should include an allowance of extra time for a nanny to get to work due to road conditions, etc. For example, if a nanny is due at the home at 9am on a bad weather day, she is permitted a grace period of two hours due to weather-related issues.

All of these conditions and factors must be considered when creating a snow day policy, and communication between the family and their nanny is crucial to this process. Discussing these concerns in advance will hopefully allow families to create a policy that is reasonable and considerate of both their needs and their nanny’s.

Please contact us with any questions at (518) 348-0400.