5 Things to Remember When Employing a Nanny

#1: Don’t Treat Your Nanny As an Independent Contractor

The IRS considers nannies to be employees and not independent contractors, and there’s no getting around it.  To avoid legal and tax issues, you need to follow IRS rules and withhold taxes as legally required.  For help, contact an employment attorney or work with a payroll company.

#2:  Pay Overtime!

Nannies are non-exempt employees. That means you have to pay them overtime, which is usually at least 1.5 times the regular rate of pay. Failure to pay overtime can result in back wages, back taxes, penalties, and audits.  To ensure compliance, have your nanny record her time and always pay overtime.

#3: Pay Payroll Taxes

As a corollary to #1, be sure to pay nanny taxes, meaning payroll taxes.

#4: Remember Workers’ Comp!

Some states, like California, require workers compensation for domestic employees. That essentially acts as a safety net in the event the worker is injured on the job.  That said, contact your state department of labor or other office that oversees workers’ comp issues and ensure that you are in compliance.

#5: Have an Employoment Agreement!

Except for one county in the US, you are not required to have a written employment contract for your nanny.  It is highly recommend though.  A nanny contract can help you avoid disputes. It can also help you address important issues that commonly arise with nanny care, such as taxes and overtime.