Being a nanny or senior caregiver is a rewarding and fulfilling profession. While many caregivers are aware of the importance of being paid legally, they may not fully understand the significant benefits that come with it. In this blog, we will explore the safeguards household employees can rely upon when they are paid legally, including access to Social Security, unemployment insurance, and workers' compensation benefits. Let's dive in!
Social Security Benefits
By being paid legally, nannies earn credit towards Social Security benefits, which provide valuable financial support during retirement. On average, employees making around $1,000 per week in wages, can expect an approximate weekly benefit of $400 in retirement, depending on their work history. These benefits can grow over time, providing a safety net for the future and ensuring financial stability during retirement.
Unemployment Insurance
Life can be unpredictable, and even the most reliable positions may come to an end due to unforeseen circumstances, such as an employer being relocated by their own employer. When caregivers are paid legally, they can access unemployment insurance benefits if they become unemployed through no fault of their own. On average, nannies with an annual income of around $52,000, can receive about $650 per week in unemployment benefits, helping to bridge the financial gap while they search for new employment. This benefit offers peace of mind and a safety net during challenging times.
Workers' Compensation Insurances
Accidents and injuries can happen in any profession, including while working as a caregiver. When nannies are paid legally, their employers can obtain workers' compensation insurance. Workers comp benefits provide financial support if the employees sustain work-related injuries or illnesses covering medical expenses, rehabilitation costs, and a portion of lost wages during recovery. On average, caregivers can expect to receive around $660 per week in workers' compensation wage benefits if their regular wagers were $1,000 per week. This allows an employee to focus on healing and getting back on their feet without financial stress.
Being paid legally as a nanny or caregiver ensures compliance with tax regulations and opens the door to a range of important benefits. Access to Social Security, unemployment insurance, and workers' compensation provide employees with financial security and peace of mind throughout their careers.
While setting up legal pay is an employer’s responsibility, as a nanny or caregiver it is crucial to advocate for yourself to ensure that your employer understands the benefits you deserve. By doing so, you can build a stronger financial foundation for your future, safeguard against unexpected circumstances, and enjoy the peace of mind that comes with knowing you are protected. Legal payment practices benefit everyone involved, fostering a more equitable and secure work environment for caregivers. So, if you're a nanny or caregiver, don't underestimate the advantages of being paid legally – it's a win-win situation for both you and your employer!
Note: Benefit amounts are approximate averages, and actual benefits may vary based on various factors. It is advisable to consult with relevant authorities or professionals to get information and guidance tailored to your specific situation.