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Top 4 Problems in a Nanny Share and How to Solve Them

Posted by HomeWork Solutions on Sep 6, 2016 8:00:00 AM
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Nanny_Share_Problems.pngNanny sharing is a common situation that allows one nanny to care for the children in multiple families. The families will literally share the nanny and it can be a good option for families on a budget. It’s also a good way for your kids to socialize with other kids in a home setting that is safe and familiar. While there are a lot of proven benefits to nanny sharing, there are also some problems that can happen. Here are some of the most common issues you’ll run into with a nanny share situation and some tips on how to solve them.

Problem: One family wants to pay on the books, the other doesn't

Solution: This puts the nanny and the other family in an ackward position, and cheats the nanny out of full unemployment benefits when the share breaks up  or from fair workers' compensation if she is hurt on the job.  It may be convenient to pay your nanny without adhering to tax laws, but this is illegal and could be incredibly costly if you get caught. If you don’t pay nanny taxes, there are substantial penalties and fines to pay that can sometimes range into the thousands of dollars. You should insist on getting the nanny on the books and paying her legally so there are no negative repercussions down the road.

Problem: One family doesn't want to pay the nanny when they take days off.

Solution: It is a best practice to treat the nanny share like a day care situation - you have reserved the space and you pay for it whether you use it or not. This is a problem that can be solved by creating a nanny share agreement at the start of the nanny’s employment. Establish the guaranteed weekly pay from each family, notice or pay in lieu of notice for when a family leaves the share, and vacation and holiday policies. Most benefits are negotiable, unless they are established by state or federal law. Define paid time off carefully as well as what paid holidays are included and which ones are not.

Problem: The other family wants to pay me and I pay the nanny.

Solution: No matter how detailed you are, managing household payroll can be a big commitment. Establish a clear payment schedule at the beginning of employment that is agreed upon by both parties. If there are issues on who pays what to who, it might be beneficial to get a third party, such as a household payroll service to oversee the details.

Problem: All the work takes place at the other family's home, why do I have to have unemployment/worker's compensation?

Solution: A nanny share situation is a joint-employment arrangement, and both families are legally employers subject to the federal and state rules , regulations, and taxes.

Unemployment insurance insures minimum income to the nanny based on how much you paid her when the job ends through no fault of her own. This is important financial security for a nanny. Many states mandate that household employers have a worker’s compensation insurance policy which covers lost wages and expenses due to a job-related injury. There are various legal requirements for getting this insurance and it varies greatly in each state. Worker’s Compensation Insurance is a necessary part of having a nanny, no matter what home she is working at (HWS clients can obtain workers' compensation insurance through our insurance partner). If you’re paying her for her services, it should be factored in. It will not only protect the employee, but it will protect you as the employer for liabilities and other expenses that come with a work-related incident. You don’t want an accident to occur, but it's good to be prepared for them just in case. Click here to view the list of worker’s compensation insurance requirements as required by each state.

Problem: No planning for when a family wants to leave nanny share situation.

Solution: This is something that can be factored into the nanny share agreement, which should stipulate notice or pay in lieu of notice when a family is leaving the share. We recommend 4 weeks pay, to protect both the nanny and the other family in the share. The termination clause can be worded to keep both parties protected in the event that termination needs to take place or a family wishes to leave the nanny share situation.

A nanny share work agreement can be incredibly beneficial for working families. Doing your research ahead of time and developing a strong written work agreement can help you avoid potential pitfalls. Contact us today for professional advice!

Download Tip Sheet Setting Up a Nanny Share

 

Topics: nanny share

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