Cost of child care

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Why You Need to Stop Nanny Pay Under the Table Today

Tax season is upon us, and with it come all of the trials and tribulations of filing. As a parent / employer, you’ve probably saved your receipts, collected your documents and spoken with your accountant, but have you declared your nanny as a lawful employee? Many parents or guardians believe that nanny pay under the table is a perfectly reasonable thing to do, after all, isn’t that what everyone else does? Many parents have never even considered paying a nanny through payroll, but there are many serious issues that can arise from paying your nanny under the table, all of which cause much more of a headache than simply having them fill out tax documents. We are experts in assisting parents legally employ their nannies via payroll. We can help you figure out which government documents you need and what to ask your employee. Reach out to us with any questions concerning paying your nanny legally. Still not convinced you need to need to pay legally? Here are a few things that can go wrong by paying your nanny under the table: 

Your Nanny Gets Hurt on the Job

You might be thinking that a childcare provider should be keeping children out of danger, and therefore the risk of any injuries coming to them would be practically nonexistent. But what happens if your nanny gets injured in a car accident during a drop off at school? Or if they slip and fall after your new construction? A serious enough injury can send them to their doctor or the hospital, and when they relay their story to the physician, explaining that they were injured on the job, they have a worker’s comp claim. And what happens when they file that claim and the state has no record of them being an employee of yours? You can expect hefty fines from the State, all because you paid your nanny under the table; rather than declaring them as an employee.

Your Nanny Files For Unemployment

Let’s say you and your nanny part ways. Your child starts school or your partner loses their job and you either no longer have need of your nanny, or you simply can’t afford to keep them on. Your nanny will need to have support during their transitional period of finding a new job, and they seek to obtain unemployment from the state. However, the state has no record of their employment with you, as you haven’t been paying unemployment insurance along with their salary. That would be yet another fine for not paying your nanny as a legal employee.

Act as you would if you were in the room with your nanny interviewers. When you’re listening be sure to engage with them, maintain eye contact and nod when listening. Just because you are not in the same room does not mean that all social graces fly away, they can still see you and will take note if you act disinterested or distracted.

Your Nanny Sues For Not Withholding Taxes

Your nanny is part of your family, and you want what’s best for them, so you are happy to pay them off the books, ensuring that they enjoy every dollar that they’ve earned. But your nanny talks to others at the playground and finds out what benefits of being a legally employed nanny she’s missing out on. She finds out she isn’t saving money for retirement, she can’t get a loan and realizes she doesn’t have credit because she doesn’t have any work experience. She begins to understand that the benefits she’s missing out on far outweigh the extra few dollars she gets in her paycheck each month and decides to sue you for not following the law and paying her under the table.

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 You've Hired A "Less Than Ideal Nanny"

Professional career nannies take themselves seriously enough to understand that their job is a business, and in order to reap the benefits of one, they must be paid legally. These nannies are responsible, they have legal employment histories, can receive unemployment and social security and they can qualify for Medicare. Isn’t that the type of person you would want to entrust your children to? Nannies who accept being paid under the table may not be taking themselves seriously, and if that is the case, how could they be trusted to take care of your children seriously? It is best to avoid any doubt by paying your nanny legally.

 

You Incur Fines and Penalties For Not Following the Law

There are many laws and regulations under Domestic Workers Bill of RightsFair Labor Standards ActDepartment of Labor rules or the IRS to protect both employers and employees in household settings. They exist to make sure all domestic employers properly declare an employee for tax purposes, pay over time, effectively track hours, pay a minimum wage, and provide time off. If any one of these many institutions discover you’ve been working outside of the law, you can expect large fines or penalties.

 You Get Audited By The IRS

If any of the above acts find out that you’ve been avoiding paying your employee legally, it could lead to an audit. Once the government catches wind, they will investigate to see if there is any other financial foul play. An audit could mostly just result in a legal headache, but there is also the possibility of needing to pay back taxes and fines. Failing to pay your nanny’s employment taxes can cost you up to $25,000.

 

Taking the time to employ your nanny legally today can save you from massive fines and penalties tomorrow. Have no idea where to start or how to pay an employee legally? Let us know, we can help! We have extensive resources that can make employing your nanny legally simple and easy, and will protect you from any issues.

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Nanny Savings - How To Plan For Your Future

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Childcare is a business like any other. We pay taxes and social security, we network, we attend workshops and take classes that better us and expand our knowledge. We invest time and money in our business, so why not use our business to invest in our financial health and start nanny savings for retirement?

For those 9-5ers out there, stocks and trading are easily accessible through water cooler talk and employee bonuses, but for those of us who work in childcare, the only investments we discuss with our co-workers are juice boxes and LOL Surprise. However, these tips and apps make saving money and investing both simple and easy. If you can get your kids to do their homework and eat their greens, trading and investing will be a walk in the park (without the stroller). Here is our top ten list of ways nannies can start preparing for retirement.

Robinhood

Robinhood is an app that allows you to buy and trade stock without having to shell out any of your hard earned date night cash on commissions or fees, making it a great option to invest more of your nanny money for retirement!

Acorns

Acorns is the best app if investing has you feeling stumped. Acorns links to your bank account, rounding up everything you spend to the nearest dollar and transferring them to your Acorns account to be invested automatically. An awesome option for nannies to plan ahead for retirement with minimal effort.

A live-in nanny has great responsibilities, and opportunities for great savings. In a place like Los Angeles where rents are exorbitant, being a live-in nanny can allow you to put all of the money you would spend on rent and commuting to work to your retirement fund instead

Switch to a Cheaper Cell Phone Plan

Do you really need that unlimited data plan? Yes it’s nice to be able to hand your kids an iPad with Baby Shark queued up for those desperate moments, but cutting back on your screen time in general will help you lead by example, and save you lots of cash for your retirement!

Skip the Gym Membership

Who needs a trainer when you are surrounded by elementary-aged kids? Skip the monthly gym membership that you’re too tired to use after a long day of nannying, and schedule workout activities with your kids while on the clock. Kicking the soccer ball or shooting hoops gets your steps in while tiring them out for bed time. It’s a way to bond during play time, and, instead of spending money to keep healthy, you’re making it!

Stash

Stash is a great tool for beginner investors and especially for nannies looking to put away money. It lets you invest as little as $5 and teaches you as you go. It also has articles and tips loaded with a wealth of information on investing.

IRA's

IRA’s are a great option for nannies saving for retirement. Contributing to one of these accounts cuts your tax bill and gives you options to invest. While you’re meal prepping and picking kids up from school, your IRA is growing until you’re ready to retire.

Calculate by Hours

If you’re questioning whether or not something is worth buying, think about how many hours you have spent corralling kindergartners and changing diapers. Would you trade 4 hours of disinfecting high chairs for that new jacket? If not, don’t buy it! Instead, put away that cash for when you’ve changed the last diaper of your nanny career.

Nanny Share

Nanny shares are a great way for nannies to generate extra income for retirement without working extra hours. Team up with two families at a time and watch your nanny retirement fund grow! Not sure how nanny shares work? Reach out to us with any questions.

Consider Live-In

A live-in nanny has great responsibilities, and opportunities for great savings. In a place like Los Angeles where rents are exorbitant, being a live-in nanny can allow you to put all of the money you would spend on rent and commuting to work to your retirement fund instead. Interested in a live-in situation? Check out our job page or let us know! We would be more than happy to help you find your live-in family.

Meal Prep

Dining out can be the biggest drain on your bank account. A meal eaten out now is money taken from your nanny retirement fund. Take your meal prep skills out of your family’s house and into your home! Ask your nanny family if you could cook your own meals while cooking theirs, this way you don’t have to feel like you’re working when you’re off the clock. You can save money by eating home cooked meals and save time by utilizing their kitchen (which, let’s face it, probably has a veggie spiralizer).

Still confused as to how you can get a head start on your nanny retirement? Reach out to us with any questions or concerns and we’ll help you formulate a plan. Nannying is a rewarding and sometimes taxing career, you deserve to feel prepared for your retirement.

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NANNIES - HOW TO ASK FOR A RAISE

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Being a nanny is a job, and depending on your commitment to the craft, it’s a profession.  It’s a demanding, exhausting, mentally and physically taxing job with an immense moral reward – shouldn’t the financial reward match the effort? Most businesses have in place quarterly and / or annual reviews with the opportunity to discuss a raise, your nanny position should be no different. If you have been with a family over a year, you deserve a review and very possibly a raise. Below are some important points to consider when asking for a raise.

Nobody will hand you a raise out of the blue.

Asking for a raise is tricky business in any career path, and can be especially difficult to do as a nanny. You work and sometimes live in their home, you’re part of the family! It can feel awkward asking for more. A great place to start is by making a mental decision that you WILL ask for a sit down with the parent/s to discuss the possibility of a raise. Tell a few people close to you that can hold you accountable to it.

Be prepared and have supporting documents.

Next is to start preparing. Once you begin to write a list of all of the things you’ve done with the family, the more motivated you will be to ask and the more confident you will feel. Write down all of your new job tasks, how you’ve taken classes and bettered your skill-set, how you started to drive more, how you now cook for the family, how you’ve helped with the new baby, any additional duties that has been added since you began working should be used as a justification for a wage increase. Have these handy when you ask for your raise, it will be apparent that you are deserving!

Do your research.

Consider the natural rate of inflation in your economy. Gas prices increase and suddenly your pickups and drop offs are beginning to cost you more. Rent rises and your hourly rate isn’t going as far as it used to. These are important factors to take into account when bringing up your raise with your employer.

“It also helps to plant the seed and give them some time to think about your request before catching them off guard. Depending on your relationship with the parents, you might say something like: “Would you happen to have some time this week to sit down together to discuss how things have gone this past year with my position, and the prospect of a raise in my pay?””

Timing is everything!

In addition to preparing your points, choosing the right time to bring it up to them is crucial. Most parents are excessively busy, hence the need for a nanny! It’s imperative that you find a slice of downtime to approach them face to face. Around the year mark is a great opportunity to ‘raise’ the topic, as it’s a common practice in most industries to negotiate compensation after one year. Additionally, asking for a raise after you’ve completed a major accomplishment is also a good time to present your expectations.

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Bite the bullet - ask!

It also helps to plant the seed and give them some time to think about your request before catching them off guard. Depending on your relationship with the parents, you might say something like: “Would you happen to have some time this week to sit down together to discuss how things have gone this past year with my position, and the prospect of a raise in my pay?”

Be confident!

Know your worth, know that you give your all and you work hard for this family. Know that if you have been with them a year, you are continually doing the right thing day in day out and they want to keep you around. You have formed a strong bond with their children. You are irreplaceable – there is no other you! They respect your hard work and know that a raise is more than deserved. Chances are your employers are no strangers to a corporate or business structure – they know you deserve a raise and it’s expected of you to ask! If you think you may have difficulties articulating your needs and would feel more comfortable reaching out via email, that’s okay too. Have a close friend or family member write the first draft of the email for you, it removes any anxiety, provides a great starting point, and your friend has far less hesitation about describing your value than you do. Los Angeles Nannies has composed many ‘Raise Request’ emails and we would be happy to do the same for you. Drop us an email with a few details on your situation and we’ll reply with something you can forward directly to your nanny family!

Make your intentions clear.

Know exactly how much you’re asking for, but also be realistic. Don’t set your hopes too high and don’t ask for $0.25 per hour raise. We’ve seen increases range from 5-40% after the 1st year, so decide where you would like to be on that scale. If you currently earn $15 per hour and want to make $18, that’s a 20% wage increase ($3); $16.50 is 10% wage increase. Ask other nannies in your area to get a feel for what they make, and check if your experience and responsibilities line up with theirs; Los Angeles Nannies can also help with this.

I asked, they said no… now what?

Even if you got your courage up and did all the work and they said no, ask why. Without letting emotions get the best of you, listen to their reasons; ask them if it would be possible to set up another review in a couple of months to approach the topic again after you make adjustments per their feedback (within reason of course). Check if there are other responsibilities to take on that could see your hourly wage increase accordingly. Remember that there are many reasons why a family won’t or can’t offer a raise, and it’s important to understand what they want moving forward. Perhaps providing an increase is not within their financial capability, which means you may want to reconsider working with this family for the long term. For parents that possibly cannot afford a raise, an alternative could be to ask if they would consider paying for courses specific to your job or sending you off to a nanny conference (INA) and assisting with hotels and airfare. There are many alternatives to a financial raise to consider that can help save you money and demonstrate to the family your dedication to your job.

If you have prepared your reasoning well, presented yourself professionally and with confidence, there is no reason why you won’t be treated as a professional and receive the raise you ask for. We’re here to help so drop us a line!

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Standing Out in the New, Competitive Nanny Job Market

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There is not one among us who has not been affected by the COVID-19 pandemic, and caregivers have been hit especially hard. With so many nannies working under the table facing furlough and therefore without ability to apply for unemployment, we are seeing many nannies itching, even desperate, to get back into the workforce as soon as possible. At Los Angeles Nannies we are still interviewing and vetting candidates for the eventuality that jobs start flooding in once more. The market post coronavirus will be extremely competitive, so how can nannies stay at the top of the applicant pool and beat out the tough competition?

Work with, not against, the agency.

With many internet resources for nannies to self submit to childcare jobs, one may wonder what need there is for an agency. While an extra step for nannies, agencies can be a massive benefit to a nanny’s career. For starters, agencies advocate for a nanny’s rights and assist in negotiating. There aren’t many mentors available in the nanny industry, but an agency can be there every step of the way for advice and suggestion on how to get you hired. Agencies want you to get a job, they don’t make money unless you do. If you choose to go the agency route, make sure you stay active and responsive, procrastinating on responding to that email from an agency can be the difference between getting a job and staying unemployed. Stay communicative with your agency, reach out about opportunities you’re interested in and make sure all of the necessary documents are on file so that when new jobs arise, they can send you out as soon as possible. The market will be extremely competitive and there will be many nannies who have CPR and credentials on file already, so make sure you are not missing out on an opportunity with your dream family simply because you waited to send an email.

Gather your References

Reference checking is always the most tedious and time consuming part of the application process, and an unresponsive reference can be the deciding factor between which two candidates are hired. Reach out to your references in advance and let them know that people will be calling. Encourage your references to schedule a time to chat. Don’t worry about inconveniencing them, you worked hard for every family and you deserve to have your references completed. 

Bolster your resume by getting specific in your job descriptions. Did you “cook” for the Smith family or did you “create nutritious meals for family of four each night to promote a healthy diet”?  Did you “go to the park” with the kids or did you “plan fun excursions to enhance physical abilities and expose children to stimulating, educational activities”?

Market Yourself

Now is not the time to be humble! Sell yourself! Create or update your nanny website so families can explore all of your credentials in one place. A website also shows that you are serious about your career and not just in it for the paycheck. Gather and organize all of your relevant documentation in one place. Create a folder for your CPR / First Aid Certificates or online classes. Ask for and file letters of recommendation. Seeing all of your qualifications and additions to your expertise in one area is a great way to add to your confidence and remind yourself that you are worthy of any job you apply for. Go through all of your social media accounts and make sure that you are representing yourself in a professional manner. View your profiles like a parent would. When reaching out to families or agencies, make sure you detail every bit of relevant information that would make you be the perfect candidate for any family.

Join a Networking Group

Like in all professions, who you know can go a lot farther than what you know. Joining nannying or childcare groups on social media, signing up for newsletters, or getting involved with organizations like the International Nanny Association can be a great way to stay connected and updated in the childcare community. You never know what job opportunities may arise simply from knowing and connecting with other nannies in your area, as many families would rather interview a referral than a stranger. Joining a nannying networking group is a great way to stay in the know about jobs, opportunities, continuing education classes and much more.

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Solidify your Resume

Bolster your resume by getting specific in your job descriptions. Did you “cook” for the Smith family or did you “create nutritious meals for family of four each night to promote a healthy diet”?  Did you “go to the park” with the kids or did you “plan fun excursions to enhance physical abilities and expose children to stimulating, educational activities”? Changing your language can help you stand out and above the rest of the candidates. Treating your childcare resume like the professional tool that it is, can help you show families that you are the ideal candidate. Resume still not looking so hot? Take an online class in childcare or volunteer locally. Our resume template is a great place to start.

Get specific in your Cover Letter

Reading the job description and adding in phrases or information from the post into your cover letter helps you stand out to families. Not only does it show that you’ve taken the time to read the post, it also affords you an opportunity to explain why you are a great fit for the job. If the job mentions that the child loves soccer, mention your coaching experience. If the child needs transportation to practice for the school play, flash your BA in Theater Studies. Families ultimately want to see who will be taking care of their child’s safety but also their emotional, social and intellectual growth and if you have things in common already, that’s a huge first step.

After you’ve found your dream job, get proactive against unforeseen circumstances.

You may think that being a nanny inherently lacks job security, but that is not the case. Make sure you’re never put into this position again by advocating for yourself with the same confidence you did in the interview. Ensure that you are paid legally on the books so that you can apply for unemployment benefits should you be laid off. Get and sign a contract. Agencies are great resources for legally binding employment contracts that can make a huge difference in your job security even outside of times of uncertainty.  You should also start saving for the future – our blog on saving for the future is a great place to start.

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Employment Rights All Nannies Need to Know

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Since nannies work in the private homes of their employers it’s often mistakenly assumed that they are not protected by labor and tax laws. While not all labor and tax laws apply to household employers because they employ less than the minimum number of employees required before they kick in, many of them do; and it’s great to know your employment rights.

According to the International Nanny Association, all nannies, whether they are legally authorized to accept employment in the United States or not, are protected by these 10 basic employment rights. 

Nannies must be paid for every hour that they work.

Under the Fair Labor Standards Act, whether live-in or live-out, nannies must be paid for each hour that they work.

‘If a nanny files a claim for unpaid wages or abuse, an employer may not turn their nanny in for an immigration violation. The Department of Homeland Security’s Immigration & Customs Enforcement Agency (ICE) has written rules that prohibit their interference in labor disputes.’

Nannies are entitled to be paid minimum wage.

All nannies are entitled to be paid at the state or federal minimum wage rate, whichever rate is higher.

Live-out nannies, and some live-in nannies, are entitled to overtime pay.

Live-out nannies are entitled to be paid overtime at the rate of 1.5 times their hourly base rate for all hours worked over 40 in a seven day period. Live-in nannies, in some states, are also entitled to be paid overtime.

Nannies must receive a W-2 form at the end of each year.

Nannies are not independent contractors; they are employees of the families for whom they work. Nannies who earn more than $1,800 per calendar year (2012 threshold) must be given a form W-2 and not a form 1099.

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Nanny employers are required to withhold payroll deductions.

These deductions include Social Security and Medicare and state taxes. Income taxes and other benefits, such as contributions to health insurance premiums, may be withheld if the nanny and employer agree.

Nannies are entitled to be paid regularly.

Each state determines the maximum number of days between payroll dates and the maximum delay an employer may place on a nanny’s periodic payroll. Some states even dictate the frequency in which nannies must be paid. The employer must keep accurate payroll records, including the dates and hours worked, for three years.

Nanny employers are required to have Workers’ Compensation policies in states that require it.

Workers’ Compensation provides financial assistance to nannies who are hurt on the job. Most states require nanny employers to have a Worker’s Compensation policy, though not all of them do.

Nanny employers are entitled to work in an environment free from abuse.

Federal and state laws protect nannies from physical and sexual abuse by their employers.

Nanny employers cannot confiscate a nanny’s passport or any other identifying documentation.

Nanny employers cannot take and keep a nanny’s passport, Social Security card, work permit, or driver’s license.

Nanny employers are not allowed to retaliate against nannies from workplace grievances by turning them into immigration.

If a nanny files a claim for unpaid wages or abuse, an employer may not turn their nanny in for an immigration violation. The Department of Homeland Security’s Immigration & Customs Enforcement Agency (ICE) has written rules that prohibit their interference in labor disputes.

Want to share a story with us regarding your employment rights? Comment below.

Homework Solutions is our preferred payroll provider and has mountains of resources for domestic employers and employees

The International Nanny Association is a non-profit educational association. For more information about nanny employee rights, click here 

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