Nanny Agencies vs. Online Agencies

nanny agencies vs online agenciesA good agency is a helpful resource in finding a nanny or other household employee. After all, household employers hire staff to make life more convenient, easier, and fun—enabling the employer to direct his or her energies toward enjoying his or her family or home.  Online nanny agencies have become more popular in recent years, and while both traditional agencies like A New England Nanny and online ones each have benefits, there are many differences that may help an employer to decide which route to take when hiring a nanny or other employee.

Our comparison chart below shows the general differences between us and online agencies.

   A New England Nanny
 Online Agencies
 Time Savings
  • All searches assisted by agency staff.
  • Job postings managed by agency staff.
  • Agency staff assist in job description and work agreement development, may provide interview questions and other necessary paperwork.
  • Agency will assist in scheduling interviews.
  • Agency will generally offer a select few qualified candidates, helping employers to immediately target the best candidates.
  • Search on your own.
  • Do the selection process yourself for your preferred candidates.
  • Post jobs yourself.
  • Develop job description and work agreement yourself (some sites offer templates or articles to help).
  • Perform background checks on your own (unless included).

Note: There can be even more effort involved on your part, and therefore the process can take longer.

 Turn-around Time
  • Depending on our current pool of candidates, this could be fast, or you may need to wait for a list of qualified candidates.
  • Can help you find a large number of prospective candidates in a matter of minutes, which may lead to your selection of candidates for interview.
 Cost
  • Because you are engaging a consultant with staff and many included services, you will be paying a higher fee.
  • Membership to online sites tends to be less expensive, however there can be “additional fees” in add-on services.
 Screening
  • Pre-screened applicants.
  • Phone and face-to-face interviews conducted before family interviews
  • Reference and employment checks verified.
  • Full background checks provided.
  • You may have to conduct all pre-screening and interviews.
  • You conduct your own reference/employment checks.
  • You conduct background checks (unless included).
 Expert Assistance
  • Assistance and guidance with job offer.
  • Job description development.
  • Compensation package.
  • Experience based on agency selected.
  • No personal guidance.
  • You are responsible for job offer.
  • Limited resources for employment policies.
  • Limited guidance on fair hiring/compensation.
 Tax, Payroll, and   Insurance Advice
  • Agency provides compliance education and materials.
  • Referrals for detailed advice and free consultations.
  • You decipher compliance requirements.
  • Some sites do refer to a tax and payroll service, such as GTM.com.
  • Some sites do post articles on tax and payroll issues.
 Post-placement Support
  • Ongoing support after placement.
  • Managerial advice and job coaching.
  • Temporary babysitting services.
  • Emergency backup care for unexpected absence of primary caregiver.
  • No managerial or personalized support after hiring.
 Guarantee
  • Usually an agency will guarantee a placement by providing a replacement or an extended membership so you can use its services again for free.
  • Limited or no guarantee.

 

If you have any questions or need more information, please contact us at (518) 348-0400.

Valentines Day 2015

valentines day 2015

Traveling With Your Nanny

traveling with your nannyHow to Compensate Your Nanny on a Family Vacation

Before a family hires a nanny, the nanny’s compensation should be detailed fully, including the rate of pay for attending family vacations and any mileage or expense reimbursement that may occur. It is important for families to remember that their vacation time is not the same as their nanny’s vacation time. A nanny who travels with a family and performs work responsibilities should be paid accordingly. Here are some quick tips on how to compensate your nanny for your family vacation:

  • Before the vacation begins, outline exactly what the nanny’s job responsibilities will be during the trip and the hours she will work.
  • Your nanny needs to be paid for all travel time to and from the destination.
  • All travel expenses are to be covered by the employer. This includes flights, accommodations, meals, and any other travel related expenses.
  • Your nanny needs to be paid her normal salary for all hours they are responsible for the children.
  • You do not need to pay the nanny for rest time as long they have appropriate sleeping accommodations, receive 5 hours of uninterrupted sleep in a row, and receive a total of 8 hours rest time.

For example, if the children and the nanny go to bed at 9 pm, and the children need assistance at 1:30 am for 15 minutes and awake at 7 am, you will need to pay her for the 8 hours she was supposed to be resting. If the children and the nanny go to bed at 9 pm and wake up at 3 am, she tends to them for 15 minutes and then goes back to bed until 6 am, you are able to deduct the 8 hours because she received 5 hours of uninterrupted sleep.

  • You do not need to pay the nanny for any hours where she is free to go off on her own, and not be responsible for the children.
  • In accordance with the FLSA, any weekly hours over 40 need to be paid as overtime pay (one and a half times the regular hourly pay).

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

 

5 Nanny Tax Facts…or Myths?

nanny tax factsHaving a household employee can be a complicated situation; employers need to be aware of federal, state, and local tax and wage laws in order to stay compliant. There are many issues about which household employers may have questions – the list below answers some of the most common ones. Read on to learn about 5 nanny tax facts…or myths.

1. It is illegal to pay nannies through your company’s payroll.

FACT! It is not proper for an employer to pay a household employee through their business payroll. A household employee is an employee of the home, not the business, and therefore would not qualify for the tax deductions that would otherwise be allowed with a traditional business employee. In most cases, federal household employment taxes must be paid on the employer’s personal federal income tax return, either annually or quarterly. The only exception to reporting federal household employment taxes on the employer’s personal federal income tax return is if they are a sole proprietor or if their home is on a farm operated for profit. In either of these cases, the employer may opt to include federal household employment taxes with their federal employment tax deposits or other payments for the business or farm employees. For more information, refer to IRS Publication 926.

2. Nannies are entitled to overtime pay.

FACT (in New York)! The New York Domestic Workers’ Bill of Rights requires employers to pay overtime at time-and-a-half after 40 hours of work in a week, or 44 hours for workers who live in their employer’s home. Employees hired to provide babysitting services on a casual basis are exempt from minimum wage and overtime requirements, whether or not they reside in the household where they are employed.

3. Nannies are independent contractors.

MYTH! There are specific differences between an employee and an independent contractor. An employee is a person who takes instruction from the employer, has a schedule set by the employer and uses tools and equipment provided by the employer. An independent contractor is a person who works under their own conditions, sets their own schedule and uses their own supplies. Most nannies who work in an employer’s home whether it be on a temporary or full-time basis are considered household employees, not independent contractors because they work under the family’s control and have their schedule and pay set by the family. In the past, the IRS has made determinations that caregivers are considered employees and it is illegal for a family to treat them as independent contractors.

4. Employers do not need to track a nanny’s hours.

MYTH! According to the FLSA, employers are required to keep records on wages, hours and other items as specified by Department of Labor regulations. These records include hours worked each day and total hours worked each week. Not keeping proper time records makes it difficult to prove the hours an hourly employee has actually worked and when they may be eligible for overtime pay in the event of a wage and hour audit by the Department of Labor. Learn more about record keeping for your nanny or other employee.

5. Only full-time nannies need to be paid legally.

MYTH! Any household employee who earns $1,900 (2015) or more in a calendar year must be paid legally and the employer must withhold Social Security and Medicare taxes regardless of whether they work on a part-time or full-time basis. Employers must pay federal unemployment tax for any employee who earns wages of $1,000 (2015) or more in a calendar year. Since the wage threshold for these requirements is low, many times even the most part-time employee needs to be paid legally.

For more information about these and all issues regarding household employment, contact us at (518) 348-0400.

National Nanny Training Day 2015

national nanny training day 2015

2015 Changes to Employee Benefits

2015 employee benefits changesThe new year is underway, and if you offer your nanny certain benefits, there have been several updates that you may need to know about. Please see below for some important household employee benefits changes for 2015.

FSA, HSA, and 401(k) Contribution Limits Increase in 2015
Several of the most common benefit plans and account types have an increased allowance for contribution limits in 2015. The IRS has announced that it will raise the annual dollar limit on contributions for health care flexible spending accounts (FSAs), health savings accounts (HSAs), and 401(k) accounts based on cost of living adjustments (COLAs). These limits are reviewed annually by the IRS.

Health Care Flexible Spending Accounts (FSA)- The maximum allowed amount that an employee can contribute to an employer-sponsored health care FSA is $2,550 in 2015 which is a $50 increase from the previously allowed amount of $2,500.

Health Savings Accounts (HSA)- The maximum allowed contribution amount for individuals to a Health Savings Account increases by $50 for 2015 going from $3,300 to $3,350. The limit for contributions for a family also increases in 2015 going from $6,550 to $6,650, an increase of $100.

401(k) Accounts- In 2015, employees may contribute up to $18,000 for the year to their 401(k) account. This is a $500 increase from 2014. This increase also applies to several other types of retirement accounts such as 403(b) accounts and profit-sharing plans.

If you offer FSA, HSA or 401(k) accounts, you should ensure that you have communicated these increases to your nanny if you decide to adopt the higher limits for 2015. These increases may also require changes and revisions to existing written communications.

IRS Standard Mileage Reimbursement Rate Increases
The Internal Revenue Service has issued its 2015 optional standard mileage rates. Effective January 1st, 2015, the IRS standard rate is 57.5 cents per mile driven for business purposes (an increase of one-and-a-half cents from the 2014 rate of 56 cents per mile). Use of this rate is optional, though we recommend that you use it as a simple way to determine a standard rate for calculating mileage reimbursement for nannies who use your personal vehicle for business purposes. If you use the IRS rate to calculate mileage reimbursement, be sure to update your system to account for this change.

For more information or if you have any questions, please contact us at (518) 348-0400.

Need Senior/Companion Care? We Can Help!

 

Companion & Senior Care

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.