The extended duration of the Coronavirus pandemic and resultant disruption to normal economic activity is causing employers to make hard choices. A common question HWS client care representatives are fielding is, “Do I have to give my nanny notice of a layoff?”
The short answer is NO, you do not need to provide notice in most circumstances; however, let’s unpack some details.
Do you wish to bring your nanny back when you return to work?
Many families indeed do wish to bring their employee back once they themselves are called back to work and stay home orders are lifted. As in all cases, it is important to consider things from your nanny’s side. If she has not been working but has still been being paid, she may expect that to continue, so a direct conversation is in order. Our recommendation is that this be done in person or on the telephone, and followed up by an email summary. You should firmly state you plan to call her back to work, and give her an estimated time frame (when you are returning to work, when the stay home order is lifted, or some other metric).
The Society of Human Resource Management offers the following sample language:
Effective [date], [Company name] is implementing a temporary furlough of certain nonessential positions. This notice is to inform you that your position is included in this furlough and as such, you are being placed on a temporary, unpaid leave of absence effective, beginning [date]. This furlough is expected to last through [date]. It is important to note that your employment continues to be at-will and nothing in this notice or other furlough communications is intended as an express or implied contract.
Be aware that in these circumstances your nanny can and should file for unemployment insurance benefits. Three very important considerations for you are:
- Your nanny’s unemployment benefits may exceed what you have been paying her. In New York a nanny normally earning $900 per week may receive $484 per week unemployment benefits plus an additional $600 per week through July 31st thanks to the CARES Act ($1,084 total). Is she going to want to come back to work in 3-4 weeks and give up that extra pay?
- Nannies with work authorization who have been paid off the books will file and receive unemployment benefits, triggering state and federal enforcement against you for back taxes. To maximize her benefits, a nanny may report everything she has earned in the prior 5 calendar quarters.
- Undocumented workers are likely to immediately begin looking for other work, as they do not have the emergency income support of unemployment insurance. Thus, they may not be available in a few weeks when you need them to return to work.
Is this a lay-off or separation with no expectation of a call back to work in the foreseeable future?
Much like the family who wishes to call their nanny back to work, there is no notice required under Federal law if you plan to eliminate a position altogether. However you can make this parting easier for your nanny by:
- Talking to her in person or on the phone about the need to part ways;
- Following up in writing confirming the layoff is a result of COVID-19 economic circumstances (this facilitates her unemployment claim); and
- Writing her a letter of recommendation that she may use to obtain future employment.
Again, employees with US work authorization should apply for unemployment benefits immediately. Sadly, an undocumented nanny or caregiver has no such safety net and you may consider some extra severance pay covering a few weeks to make this less dire for her and her family.
Has your nanny notified you she is required to stay home because she has been exposed to or is exhibiting COVID-type symptoms and has been advised by a health professional to self-quarantine for two weeks? Or has she told you she cannot work because she needs to care for her own child due to school closures?
In this circumstance, you are legally unable to lay her off until such time as a Families First Coronavirus Act (FFCRA) Emergency Paid Sick Leave (EPSL) and Expanded Family Medical Leave Act (EFMLA) benefits are exhausted. She is entitled to pay for up to two week of EPSL and as many as 10 weeks of EFMLA if caring for a child whose school or childcare facility is closed. This is true regardless of whether she is paid on OR off the books, and regardless of immigration status. While undocumented workers do not have access to unemployment benefits, all employees can file an unpaid wage claim. If you have been paying under the table, you will still be required to pay the leave for her eligibility, plus enforcement damages, but will not have access to the government reimbursement afforded by FFCRA..
Some states and cities have passed Domestic Worker Bill of Rights legislation that impose notice requirements or pay in lieu of notice on household employers. Live-in nannies in particular are likely to be protected in their living arrangements, and employers may be required to provide housing for up to 30 days or provide pay in lieu of the notice. You should check your state and city requirements in advance of any action.
HWS Can Help
All documented workers can and likely will file an unemployment claim. All workers, regardless of immigration status, are entitled to benefits under the FFCRA. Employers who have paid off the books should be aware, either scenario may bring unpaid "nanny taxes" under scrutiny and subject you to collection activities by the state and IRS for back taxes and penalties.
HWS can help you get caught up with your prior tax obligations in advance of collection activities. Use the promotion FREE 2019 to receive your 2019 tax filing services free when you sign up for one year.