7 Tips for Household Employers to Be Great Bosses

Jan 4, 2019 | Household Employer Policies, Labor Laws, Retaining Employees, Tax & Wage Laws

These tips for household employers will help improve your employee relationship and stay compliant with tax, wage, and labor laws.

While any time is a good time to start, the beginning of a new year is popular for trying something new or improving old ways of doing things. As a household employer, you can look at ways to improve communications with your employee, show appreciation and recognition for the work they do and work with them to elevate their job performance.

On the administrative side, make sure you’re compliant with tax, wage, and labor laws including paying your nanny legally and having the right insurance coverage.

Here are some tips for household employers to make it your best year yet. You got this!

1. Pay your employee on the books

Legally paying an employee provides protects for you and your family while offering a number of benefits for your nanny. It also establishes a professional relationship with your employee. In fact, nannies who take their jobs seriously – the ones you want watching your children – may not take your job if you pay them off the books.

In our recent survey of nannies, 61 percent said it was at least “somewhat unlikely” they would take a job that didn’t pay them legally. You may find it hard enough to find a good nanny. By paying them illegally, you’ve reduced your pool of candidates by more than half.

As for your employee, they now have a verifiable income when applying for a car loan, mortgage, apartment lease, or even a credit card. They’ll also have a legal employment history, which is also important when applying for a loan or credit. Your nanny will be eligible for Social Security and Medicare benefits as well as unemployment should they lose their job through no fault of their own.

Paying your nanny under the table is a roll of the dice and a chance you may not want to take. There are a number of ways to get tripped up from lack of workers’ compensation insurance to your nanny filing for unemployment to facing a lawsuit from a disgruntled employee for unpaid overtime.

Our nanny tax guide will get you started on the path to compliance. If you need help or want to catch up on your 2018 tax obligation, call us at (800) 929-9213 for a free, no-obligation consultation with one of our household employment experts.

2. Review rules around workers’ compensation

Workers’ compensation requirements for household employers vary by state. Coverage may apply only to full-time workers or include part-timers. It could depend on the number of employees you have. In some states, workers’ comp may be voluntary. Regardless, it’s a good idea to review the workers’ compensation requirements in your state. Perhaps you’ve increased your employee’s hours and now coverage is required. Or if your nanny meets the threshold for just one week – maybe they’re part-time during the school year but full-time in the summer – you may still need to purchase coverage for the entire year.

Without the required workers’ compensation policy, you could be held liable for your employee’s lost wages and medical bills if they get injured on the job. On top of that, fines can be as high as $5,000 for every 10 days of non-compliance. It could be financially devastating to a family to be without the required workers’ compensation coverage when they employ someone to work in their home.

Even if coverage is voluntary, you may want to obtain a workers’ compensation policy. They’re often affordable and offer financial protections for you and your employee if they are hurt on the job.

3. Check minimum wage rates for your state and city

Another way families get themselves into legal trouble is by not paying their household employee at least minimum wage, which is required under federal law. While the federal rate has remained at $7.25/hour, many states, counties, and cities have much higher rates. Review 2019 minimum wage rates. You’re required to pay the highest applicable rate.

Also, don’t forget that household employees get paid at least time and a half in overtime for hours worked over 40 in a week.

4. Create or revisit your work agreement

If you don’t have a work agreement – or nanny contract – for your employee, put one together as soon as possible. A work agreement details your employee’s responsibilities, creates a clear understanding for both parties on the job’s expectations, and reduces the likelihood of issues. It also sets the tone of your working relationships by establishing open and clear communications from day one of employment.

A work agreement should include hire date, work hours and schedule, wages, pay schedule, duties, responsibilities, expectations, conditions of employment, benefits, paid time off, sick days, paid holidays, reimbursements (gas, mileage if they are driving your children while on the job), time frame of employment (if a temp job), and a non-disclosure/confidentiality clause if desired. The agreement should be signed by both parties and your employee should receive a copy.

If you already have a work agreement, revisit it on an annual basis. New labor or wage laws, such as a domestic workers’ bill of rights, may affect your household employment. Or you may wish to adjust wages, benefits, duties, or anything else that may pertain to the job. Always make revisions in consultation with your employee. Once again, both parties should sign the agreement and your employee gets a copy.

5. Improve communications with your employee

A work agreement is just the first step in creating clear expectations and open communications with your employee. According to our nanny survey, open and honest communications are what they want most from families. But it’s an ongoing process that requires work just like any professional relationship.

Some ideas to try this year to improve communications with your nanny include:

Leaving your nanny a list of tasks or “to dos” for the day
Laying out your house rules (screen time, junk food, etc.)
Tackling problems as soon as they arise
Setting up daily and weekly recaps
Listening to your nanny as much as you talk
Having a single focus for every conversation and not piling on your complaints
Picking your battles so you stop nagging

6. Recognize your employee on important dates

In addition to open and honest communications, nannies want to be appreciated for the work they do. In fact, 69 percent of nannies in our survey said having the respect and trust of their nanny family is the best part of their job. How do you show your appreciation? Recognize your nanny on important dates like their birthday, work anniversary, National Nanny Recognition Week, and at year-end. A simple, personal gift and something homemade from your children will show your appreciation. We put together this list of nanny gift ideas for any occasion. Don’t feel like you need to wait for a special occasion to show your appreciation. Spontaneous gifts for a job well done – perhaps it’s some extra time off or you come home early from work to give your nanny the afternoon off – will always be welcomed.

For a year-end bonus, one week’s pay is typical for a nanny who has been with you throughout the year.

7. Conduct an annual performance review

Performance reviews are fairly standard in traditional work environments and your household employee can benefit from one too. It’s a time to set goals for the year, talk about personal job growth, look at areas of improvement, and understand ways you can help improve their job performance. As always keep communications open, listen to what your nanny has to say, and approach the review as a team effort.