Department of Labor Discusses Joint Employment, Changes in the Senior Caregiver Companionship Exemption and Announces Increased Enforcement

The Private Care Association, the voice of private duty home care, met in earlier this month in Orlando, FL and invited the US Department of Labor to discuss Joint Employment and Changes in the Companionship Exemption with its members. A guest appearance was made by Michael Hancock, Assistant Administrator for Policy, Wage and Hour Division of the U.S. Department of Labor and Melissa Murphy, Senior Attorney, Office of the Solicitor U.S. Department of Labor.  Mr. Hancock and Ms. Murphy addressed an anxious crowd of almost 200 independent homecare staffing agencies to discus joint employment, the expiration of the Companionship Exemption for home health agencies and stepped up enforcement by the DOL in 2015 related to the enforcement of the Fair Labor and Standards Act (FLSA).

(October 1, 2014)

Nannies and senior caregivers who work in a private home, receive instructions and directions from the family employer and are paid by the family (either directly or via a household payroll company) are employees in the eyes of the IRS and US Department of Labor. As employees, many aspects of compensation and payroll are governed by payroll and labor law, no different than employees in a department store, factory or othr workplaces. Tax and labor law that covers household employees are often unique, and all too often neither the family nor the caregiver know the important details. Household payroll literacy on the part of a nanny or senior caregiver is important as they negotiate pay and benefits with their employers, many of whom don't understand these key points themselves.

It is National Nanny Recognition Week - a time to recognize and acknowledge the positive contributions a nanny makes in the lives of the children she cares for. HomeWork Solutions is awed by the love, commitment, continuous learning, effort and passion of these women, professionally dedicated to the wellbeing of our children and to make this world a better one! 

Do you hire, manage and issue payroll to a beneficiary’s caregiver(s) in your capacity as a trustee? If so it is important to understand the legal and tax obligations this type of employment creates for both the trust and you personally.

Understanding the Household Employer's Role with Unemployment

The work agreement (sometimes called a contract) you negotiate with your nanny, housekeeper, or elder care provider sets the professional tone of the work relationship right from the start. A carefully thought out work agreement will help the employer avoid future problems and misunderstandings with the employee.

Monday, September 1 is Labor Day in the U.S. - a Federal holiday that many nannies and caregivers receive as a paid holiday. Families often struggle with how to calculate the employee's paycheck, especially overtime pay,  when a paid holiday is in the pay period.

HWS has been providing Nanny Tax compliance services since 1993. Did you know, in a recent client survey, the biggest motivation for employers in outsourcing nanny tax compliance is the time saved?

How much time an individual would spend on their nanny taxes will of course vary between individuals. The IRS estimates that record-keeping, keeping familiar with the law, and tax return completion can run 60 hours per year. Record-keeping accounts for the lions share of the time, an activity that needs to be done every payroll period.

I was chatting with a client today. This gentleman has used our services for many years, and his household circumstances are changing. In the course of the conversation, I asked him what factors caused him to continue using our services year after year. He answered without hesitation "The time savings!" He went on to state that he actually spends only about one hour a year on his nanny taxes - primarily in collecting his information and responding to our quarterly requests for wage reports. (This client is a NaniTax Plus subscriber.) He was certain that he had never filed a tax return on time before hiring HomeWork Solutions, and that the savings in late fees alone was more than our fee. I suspect some exaggeration, but not much!