Educational Assistance for Your Employee

Nov 8, 2013 | Employee Benefits, Household Employer Policies, Retaining Employees

There are many benefits household employers can offer their nannies or other employees; benefits serve as both a retention tool for current employees, as well as a recruitment tool for new hires. One of these benefits to consider is that of educational assistance.

Although optional for you to offer, educational assistance for employees is beneficial in providing a satisfying workplace. Guidelines provided in your employee handbook may include: educational pursuits that will be covered (e.g., classes must be provided by an accredited educational organization and relate to the employee’s occupation); the limit available for educational assistance per year; educational expenses that are covered (e.g., tuition only, tuition and books, etc.); and, what requirements your employee must meet to receive assistance (e.g., the employee must achieve a passing grade as defined by the educational organization). Also, you may consider paying for professional membership fees, industry conferences, or trade journal subscriptions.

This education, as well as online learning courses that educate employees, help promote professional growth and elevate employee performance—making the educational benefit a win-win proposition for both the employer and employee. It is important for you as a household employer to decide whether access to education is an important employee benefit, and if so, how often.

For 2014, employers can claim up to $5,250 tax-free for employer-provided educational assistance; graduate-level course work is also covered. The IRS does state that employers who offer tax-free educational assistance are required to have a written plan describing the terms and benefits. This is why laying out an educational assistance plan in your handbook or work agreement is essential. Read more about educational assistance tax benefits here.

With these guidelines, you should also include information on the process your employee must follow for assistance. Consider whether your employee needs to:

• provide you with a course description and a written request for assistance prior to the start of a class

• obtain signed approval from you prior to the start of class in order to be reimbursed for expenses

• achieve a specific grade or higher to obtain reimbursement.

Be precise to ensure that your employee understands what is required.

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