As a leading domestic staffing agency, Seaside Staffing Company frequently helps families navigate the complexities of employing **nannies**. One of the most common areas where families need guidance is understanding how to properly compensate their childcare providers. Here are the top five questions we receive about nanny compensation, along with comprehensive answers.
1. Should I Pay My Nanny “On the Books” or “Under the Table”?
The answer is clear: You should always pay your nanny legally, “on the books.” Nannies are considered household employees by the IRS when they earn more than $2,600 annually (2024 threshold). Paying legally means:
– Withholding appropriate taxes
– Providing pay stubs
– Reporting wages
– Paying employer taxes
While paying “under the table” might seem easier, it can result in significant penalties and legal issues for both you and your nanny.
2. What is the Domestic Workers Bill of Rights and How Does it Affect Me?
The Domestic Workers Bill of Rights, enacted in several states, provides essential protections for **nannies** and other household employees. Key provisions typically include:
– Overtime pay requirements
– Guaranteed rest breaks
– Paid time off
– Protection against harassment
– Written employment contracts
– Clear record-keeping requirements
Check your state’s specific regulations, as requirements vary by location. Seaside Staffing Company can help families understand their local requirements and ensure compliance.
3. What Taxes Do I Need to Pay as a Nanny Employer?
When employing a nanny legally, employers are responsible for:
– Social Security and Medicare taxes (FICA) – 7.65% each for employer and employee
– Federal unemployment tax (FUTA)
– State unemployment insurance
– Workers’ compensation insurance (required in most states)
Many families use payroll services to manage these obligations. Seaside Staffing Company can recommend trusted payroll partners like GTM payroll and Homework Solutions who specialize in household employment.
4. How Do I Handle Overtime Pay for My Nanny?
Federal law requires overtime payment for nannies who work more than 40 hours in a week. Key points include:
– Overtime rate must be at least 1.5 times regular hourly rate
– Live-in nannies may have different requirements depending on state laws
– Overtime applies to all hours worked, including evening babysitting
– Travel time with children counts as work hours
5. What Additional Benefits Should I Offer My Nanny?
While base pay is important, a competitive benefits package helps attract and retain quality **nannies**. Consider offering:
– Paid holidays (typically 6-8 per year)
– Paid vacation (2 weeks standard)
– Paid sick days
– Health insurance stipend
– Professional development allowance
– Mileage reimbursement when driving on duty
– Annual bonuses
Making It Work: Next Steps
At Seaside Staffing Company, we recommend:
1. Establish clear payment terms in a written work agreement
2. Set up a payroll system before employment begins
3. Keep accurate records of hours worked
4. Stay informed about changing regulations
5. Regularly review and adjust compensation
Legal compliance isn’t just about following rules—it’s about creating a professional, respectful working relationship with your nanny. This foundation of trust and professionalism leads to longer-lasting placements and better care for your children.
Need help navigating nanny employment regulations? Contact Seaside Staffing Company for expert guidance on setting up legal pay structures and creating competitive compensation packages that attract top nanny talent.
