Planning for Summertime Child Care

planning for summertime child careSummer will be here before we know it! When schools begin to let out for the summer, many families find that they need to make changes to their child care arrangements. It’s not too early to seek advice on handling different issues that arise when planning for summer household employment, so let’s take a look at some of the most common concerns.

Compensating a 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. 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. Before the vacation begins, outline exactly what the nanny’s job responsibilities will be during the trip, the hours she will work, and what personal time she will have.

A nanny needs to be paid for all travel time to and from the destination. All travel expenses should be covered by the employer. This includes flights, accommodations, meals, and any other travel related expenses. A nanny needs to be paid her normal wages for all hours she is responsible for the children, but not 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 in a 24-hour period. A nanny also doesn’t need compensation for any hours where she is free to go off on her own and not be responsible for the children.

Lastly, any weekly hours over 40 need to be paid as overtime pay (one and a half times the regular hourly pay).

Wages for a Nanny’s Overnight Stay

Many families only use nannies for daytime child care, but as schedules loosen up during the summer, there may an occasion when the nanny is asked to stay over for a night or two. Regarding compensation for this circumstance, families pay a flat rate for temporary nannies when they stay overnight. However, if a child is up during the night for more than an hour, the hourly rate would apply on top of the flat rate for each hour the child is awake.

Families should discuss the payment options with their nanny and make sure they are in agreement before the overnight stay begins. The nanny should keep track of any hours she is up during the night caring for the child.

Nanny Taxes for Temporary Summer Nannies

Some families don’t have regular nannies during the school year, but just utilize one here and there as the need arises. Some of these families may then need more regular child care during the summer, whether it’s to drop off and pick up the kids from camp, or simply to provide care and supervision throughout the day. A question many families have is whether or not they have to pay taxes for a nanny that only works for them during the summer. “Summer nannies,” as they’re sometimes called, are subject to the same payroll and tax rules as any other household employee. If a family pays an employee more than $2,000 (2017) in a year, they must withhold Social Security and Medicare taxes. So even if the nanny is only employed for the summer, if she earns over $2,000 in that time, the family must pay her legally by paying employer Social Security, Medicare, and unemployment insurances.

While temperatures and extra expenses seem to escalate quickly during the summer months, the IRS has some good news for parents:  Those additional expenses may help you qualify for a tax credit for summer child care!

Tax Credit for Summer Child Care

Here are five facts the IRS wants you to know about a tax credit available for child care expenses. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year.

  1. The cost of day camp may count as an expense towards the Child and Dependent Care Credit.
  2. Expenses for overnight camps do not qualify.
  3. Whether your child care provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify for the credit.
  4. The credit can be up to 35 percent of your qualifying expenses, depending on your income.
  5. You may use up to $3,000 of the non-reimbursed expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals to figure the credit.

For more information, check out IRS Publication 503, Child and Dependent Care Expenses.

Contact us at (518) 348-0400 for more information.

Is My Nanny an Exempt Employee?

is my nanny an exempt employeeThere has been a lot of news lately about the Department of Labor’s new rule regarding overtime exemptions for exempt employees. Many household employers may be wondering if they need to take notice of this rule and if it applies to domestic workers.

“Exempt” and “non-exempt” are employee classifications under the Fair Labor Standards Act (FLSA)—a federal law dating back to 1938 that requires certain employees to receive minimum wage and overtime pay. An exempt employee is exempt from these requirements.

The FLSA lists a number of exemption categories. The most commonly used are the executive, administrative, professional, computer, outside sales, and highly compensated employee exemptions. These are collectively known as the “white collar” exemptions.

Most of these exemptions require that the job pass a three-part test:

  1. Duties: The employee has to do specific things regularly, such as use independent judgement or manage at least two people. Each exemption has its own duties test.
  2. Salary level: A minimum salary must be earned; currently $23,660, but this will rise to $47,476 on December 1, 2016.
  3. Salary basis: The employee is paid the same each week regardless of hours worked or the quantity or quality of their work.

If an employee meets all of the criteria under at least one of the FLSA’s exemptions, the employee qualifies as “exempt” and is not eligible for overtime pay. If the employee does not meet all of the criteria under one of these specific exemptions, they must be classified as “non-exempt,” and given overtime pay when applicable.

Are domestic workers exempt employees?

Any employee that currently earns $23,660 per year or less ($47,476 starting December 1st), regardless of their duties, are not exempt. Most nannies, senior care workers, and housekeepers would not be considered exempt (due to their duties and varying hours) and therefore must be paid overtime. But some household employees like estate managers, personal assistants, or house managers may qualify as exempt if they spend the majority of their time supervising, rather than performing tasks, and make the minimum salary required for exemption.

Still unsure?

View this helpful chart to determine if you have an employee that will qualify as exempt. Contact us at (518) 348-0400 for more information.

Excluding Sleep Hours from Nanny’s Paid Time

excluding sleep hours from nanny's paid timeWhen the Department of Labor’s Home Care Final Rule was approved last year,  Fair Labor and Standards Act (FLSA) protections were extended to most home care workers in the United States. That meant household employers needed to start complying with the FLSA’s requirements; therefore, an employer must determine what time constitutes “hours worked.” In some cases, the time a domestic employee spends sleeping at their workplace (the home) can be unpaid, even if the employee is required to be there, leading to the exclusion of sleep time hours for domestic workers.

The Home Care Final Rule did not change any of the requirements regarding sleep time. Depending on the type of domestic employee (a “live-in” employee, those working a 24 hour shift or more, or those working a less than 24 hour shift), the rules for excluding sleep time hours vary. For employees to whom the exclusion rules do apply, if sleep time is interrupted because of work duties, they employee must be paid, and if interruptions prevent the employee from getting a total of at least five hours of sleep, they are entitled to be paid for the entire night.

To help explain the sleep exclusion rules and how they apply, the Department of Labor has provided this handy chart below (click to enlarge).

excluding sleep hours from nanny

For more information about excluding sleep hours, please see this section of the DOL’s website, or contact us at (518) 348-0400.

Guide to Employing Home Care Workers

guide to employing home care workersThe Department of Labor (DOL) recently released a new publication to help families that employ home care workers deal with the very strict wage and hour requirements of the federal Fair Labor Standards Act (FLSA), the federal minimum wage and overtime law that applies to most home care workers. The Guide for Employing Home Care Workers was created to help individuals and households determine their responsibilities under the FLSA.

The guide explains several things about who must follow the FLSA rules, with examples showing how it applies when:

  • You hire a home care worker directly
  • You use a home care agency
  • You arrange care through a self-directed program

The guide describes what to do when your paid home care worker is a family member, and if you have a live-in home care worker. Also included are instructions to comply with the FLSA rules, such as minimum wage and overtime rules, tracking employee hours, and record keeping.

It’s very important to understand the rules about whether your home care worker is an employee or an independent contractor. If you hired the worker yourself, if you set the worker’s hours and dictate what tasks are to be done, then the worker is most likely an employee, and therefore you are subject to the FLSA rules on proper wage payment.

Download the guide here, and contact us at (518) 348-0400 if you have any questions.

7 Tips to Retain the Best Nannies

retain the best nanniesWhile there are many quality nannies out there, once you find one you really like, you want to do what you can to make sure she/he wants to keep working for you. Usually this doesn’t mean heaping extravagant gifts on your nanny or giving in to anything your employee asks. Open communication and treating your nanny like the professional she/he is goes a long way to maintaining a strong working relationship. To retain the best nannies, we recommend following the seven tips that follow.

Top 7 Tips to Retain the Best Nannies

  1. Provide a clear and consistent job description. Update the job description when changes in the job occur.
  2. Be sure to orientate your nanny to your neighbors, friends, family, and the general area. Include a list of emergency names and numbers, and any other pertinent family information.
  3. Have a daily meeting in which you and your nanny can discuss the day’s activities. This can also be a time to discuss any concerns or questions regarding the job, children, etc.
  4. To get and keep the most talented employees, employers must treat employees like professionals. Therefore, offering employee benefits is an important consideration for all household employers. Consider benefits such as medical or dental insurance, paid time for vacation or sick leave, a retirement plan, annual pay increases, and flexible hours.
  5. Treat your nanny as a member of the family.  Make sure that she/he can approach you at any time with any concerns.
  6. Ensuring that your nanny is fairly compensated is one of the keys to retaining a quality employee. Employers must make sure that their nanny is paid for all hours worked, including overtime.
  7. Invite your nanny to lunch/coffee at least once a month, away from the home, to discuss the job, the children, and any suggestions for the future. Remember this relationship requires team effort!

For more information and to learn how we help support household employers with their relationships with their nannies, contact us at (518) 348-0400.

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.

 

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.