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Understanding a Nanny Trial Period

Posted by HomeWork Solutions on 9/1/20 4:11 PM
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Understanding a Nanny Trial Period

Nannies and families often negotiate a trial period at the beginning of a new job. The nanny trial period may be from several days to several weeks, depending on the arrangement. This essentially gives both parties the opportunity to learn a bit more about each other, and a graceful way to bow out of a longer term employment arrangement if either party feels this is not a good match.


It is important to understand that a nanny is an employee subject to all labor laws from the moment she crosses the threshold.  While a longer term working arrangement may not have been finalized, in that moment she is an employee and the family is an employer.



Consequently, all trial periods must be paid. Compensation must meet FLSA rules governing overtime and minimum wage, and any state labor laws that are applicable.


Due to vagaries of federal household employment rules,  a nanny trial period may possibly not be taxed for Social Security and Medicare purposes if wages do not exceed $2200 and the nanny and family decide not to pursue the employment opportunity. It is a best practice for the family to withhold the appropriate Social Security and Medicare taxes from the beginning, and to simply refund them to the nanny if the liability threshold is not met and employment does not continue.


The hiring family is responsible for unemployment taxes if 1) the employer was liable for unemployment taxes within the current or prior calendar year or, 2) if there was no prior employment,  if the wages paid in the trial period met or exceed $1000* (some states have lower thresholds).


In addition to tax laws and labor laws, the family may also be required to have a Workers' Compensation insurance policy in place under state insurance laws.


And lastly, it is vital that the hiring family has completed a pre-employment background check and checked references prior to bringing the caregiver into the home to care for your vulnerable children or aging family members.


As one can see, the designation of a nanny trial period has little practical consequence under tax, labor and insurance law - it is merely a pretty way for both parties to assess long term job fit.



Topics: nanny, agency

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