Town & Country Resources Blog

Summer vacation for preschool, grade school, or middle school can present challenges for many families.  It can be difficult to decide which activities to participate in and how to piece it all together so that everyone in the family can have a fun, enjoyable and well balanced summer.

Last summer, we opted to get a “Summer Nanny” for our children. Our Summer Nanny was on break from our local college and had spent previous summers working as a counselor at summer camps. Peter wanted someone who would play basketball with him and Anna wanted someone who would get in the pool and go swimming with her. First and foremost, Jens and I wanted to find someone who would make sure our kids were safe and well cared for, but we also wanted someone who would enthusiastically engage with our kids in all their summer activities and help to create a unique, personalized and stress-free summer experience for all of us.

Our Summer Nanny exceeded everyone’s expectations. It was a wonderful summer for our entire family and the kids still talk about their “Summer Buddy.” Our Summer Nanny was able to connect with our kids, show an admirable amount of care and concern for our children, AND provide them with an amazingly unique summer experience! Here are some of the other things our kids did with our Summer Nanny that stand out in our memory:

• Taught the children how to make lanyards and friendship bracelets
• Played games like tag and capture the flag with the children in the back yard
• Packed up the kids and their bikes and went riding with them at a local park
• Cheered the children on at their swim meets and was thrilled when they achieved their personal bests
• Read to the kids when they were tired in the afternoon and needed some down time
• Taught the children about lacrosse (which our Nanny played in college)
• Took the kids to the local museums
• Took them to see a couple of very silly children’s movies
• Accompanied the children when they visited with their grandparents
• Helped the kids keep their rooms clean and picked-up
• Packed lunches before they headed off for the day’s activities
• Attended the summer swim team trip to the waterslides with both children

Both of our children loved their summer with their Summer Buddy.  They were able to participate in their chosen summer activities and were also able to spend valuable time at home reading, playing, sleeping in, and relaxing. Having a Summer Nanny was like getting our own personalized camp counselor!

I am just about to call our Summer Nanny to see about this summer – the kids would be thrilled!

If a Summer Nanny sounds like something your family needs, our Town & Country Temporary Department can help.  We have a pool of qualified and wonderful Summer Nannies that can help you.  To see our Special Summer Nanny Pricing and to learn more about our Summer Nannies, click here.

Ask Mary Poppins (aka Mary Pat)

Mary Pat doesn’t fly around with a black umbrella, but she does have over 20 years of experience as a Child Development Expert. These post will answer questions about child development concerns & managing your employer/employee relationship.

Q. As my Nanny’s anniversary date nears, I want to give her an evaluation. How do I give her appropriate feedback and a fair compensation adjustment?

A. Managing a household employee is a very personal business. Your Nanny is, after all, caring for the most precious part of your life: your children. Regular, open communication is essential to creating a healthy, long-lasting relationship between employer and employee. We recommend giving your employee feedback and praise on a frequent on-going basis.

Conducting regular meetings with your employee creates a forum to discuss issues about the children, your family and job satisfaction. When you first hire someone, you may want to meet as often as once a week and then gradually extend it to once every month. At minimum, we recommend three to four informal meetings to “check-in” throughout the year, with a written evaluation on their anniversary date.

Prior to the meeting, review their work agreement, previous performance evaluations, and fill out the evaluation form. Meet with your Nanny in private and at a time when there will be minimal interruptions, such as while the children are at school. Begin the meeting with their strengths and offer specific examples. This is a great opportunity to acknowledge their contribution to the household and say “Thank you”. Next, discuss any previously identified areas needing improvement. Always ask them for their feedback about the job and for suggestions before introducing your ideas for improvement. At the end of the meeting make any revisions to the evaluation and provide the employee with a copy of this for their records.

While there is no clear industry standard for an annual salary increase for household employees, we have seen a range from 3 to 5% for an annual pay increase depending on whether the job (schedule & responsibilities) have changed over the last year, the employee’s performance, and their longevity in the position.

If you are a registered Town & Country Client, contact one of our Placement Counselors for more advice on employee anniversaries and to receive a sample evaluation form.

Ask Mary Poppins (aka Mary Pat)

Mary Pat doesn’t fly around with a black umbrella, but she does have over 20 years of experience as a Child Development Expert. These post will answer questions about child development concerns & managing your employer/employee relationship.

Q. Help! My Nanny is habitually late. She is a terrific Nanny for my son, however, she is typically ten or more minutes late everyday. How do I resolve this issue?

A. Managing a Nanny can be a delicate business. It can be challenging to maintain the balance between having her as a part of your family and being her employer.

If you haven’t already done so, I would recommend setting up a regular time for a meeting to discuss the children, household, and employment issues. Many Nannies find it hard to speak up and will appreciate the opportunity to communicate openly with you.  Having weekly meetings can help you manage situations pro-actively and develop a solid working relationship.

Meetings should always start with the positive aspects of your employment relationship.  This is a time for you to acknowledge your Nanny and thank her for specific contributions and work towards positive solutions to the challenges of family life. Rather than saying, “You do a nice job with Ethan,” she will appreciate more specific feedback like, “I like the way you take the time to let Ethan help you make breakfast in the morning. He seems to be learning a lot about taking turns, measuring, and following directions. And he’s having fun! Thank you.”

Next, identify the problem. In this case I would say something like, “I notice that you have been about ten minutes late to work lately. This causes challenges for my scheduling. I would like to talk with you about how we can get back on track. Are you having a scheduling problem in the mornings that I can help you figure out?”

It is possible that 1) the Nanny hadn’t noticed that she was late. 2) She does actually have a scheduling or transportation problem that can easily be resolved. Many times, a simple, honest talk with an employee will dissolve any employer/employee issue. Also remember to ask her if she has any issues to bring up and make a plan to follow-up and remember to schedule a meeting to check-in again soon.

Do your household employees think that their email address or the information on their MySpace or Facebook profile won’t impact their professional image or their ability to keep their job?

They need to think again.

While having an online profile is all the rage and everyone has an email account, the details of this information could be more important to your employee’s professional image and your family than you or they may realize.

(While this is based on a true story, the names and details have been changed.  The actual family and Nanny were not associated with Town & Country Resources.)

Allyssa thought she’d found her dream Nanny job.  In her first meeting with the family there was an immediate connection and sense of comfort.  The three days she did as a working trial went perfectly.  The salary was great, it was a 15-minute commute from her house and the five-year-old boy shared Allyssa’s love of soccer.

The family also thought they’d found their dream Nanny and were just pulling together the details of the offer when they decided to do a little Internet searching on her.  Sure enough, they found a MySpace account open to the public.  Not only did Allyssa describe crazy all-night parties on a recent trip to Mexico with her friends, she also talked at length about the family she used to work for and specifically about the list of things that bugged her about the job.

For the family, it was a rude awakening.  They were shocked by the new information they now had about Allyssa’s personal life.  Worse, the lack of discretion and good judgment she had shown in violating her previous employers’ privacy was inexcusable.  They now knew two things, that Allyssa wasn’t getting the job offer and that Internet research would now be part of what they would do on each potential hire.

Your employee might think they are okay because they don’t happen to have a MySpace or FaceBook profile, but don’t forget about the rest of their public image.  A simple search on Google or Yahoo! may reveal things they didn’t even know were there and would prefer to keep private.

• Is their email address suggestive or otherwise unprofessional?

• Does their voice mail greeting have music or anything other than a brief, professional and short voice message?

• If they do have a profile on MySpace or FaceBook, they should make it private by requiring pre-approved viewers to log in.  (This is a simple setting they can do on their account.)  As an employer, you may want to add checking candidates’ online information into your due diligence process, and also ask that all information about your family be kept strictly private by your employee.

Here at Town & Country, we always do an online search of each of our candidates, as well as provide helpful tips and awareness to both our client s and candidates in regards to a candidate’s online public image.

When looking to hire a household employee, it is worth the extra effort to do some research online.  Especially when searching for a job, employees need to take the time to make sure their public image is something they, and the family that they will be working for, can be proud of. 

One of the important conversations that we have with new clients to Town & Country is whether they have thought about how they will handle payroll for their new nanny, housekeeper or other household employee.  We don’t have reliable data on what portion of household employees in this country are paid “off the books” or “under the table,” but we suspect the percentage is pretty high.

So, probably because it’s so common, it may seem as if paying “off the books” is safe – or at least very low risk.  But doing so carries some important risks for the family who is employing someone in their home (and those risks can come to pass in some unexpected ways, and means that the employee could miss out on some important benefits.

First, here’s the basic law.  When a family hires someone to work in their home, they become a household employer.  Household employees include nannies, medical caregivers, housekeepers, gardeners, cooks, personal assistants, household managers, etc.  By law, these individuals cannot be classified as independent contractors (or, at least, the exceptions are very, very few).  As an employer, the household is required by law:

1.    To pay federal and state employer taxes, including Social Security, Medicare, federal and California unemployment insurance.  These are obligations of the employer, and they’re separate from the obligations that the household empoyee has.

2.    To withhold certain taxes from the employee’s wages, and report and remit those amounts to the IRS and California (or other state) tax authorities.  These amounts include the employee’s share of Social Security and Medicare, as well as disability insurance inmost states.  In addition, as employer you are obligated to withhold state and federal income tax on behalf of the employee, but that amount may be zero based on your employee’s W-4 elections.

3.    To carry workers’ compensation insurance.  This is a requirement in California and most other states.  Workers’ compensation insurance is meant to provide certain coverage if an employee suffers a work-related injury.

Payroll services can typically calculate and help a family with the first two items above, or you can calculate and pay those amounts to the appropriate government agencies.  Workers’ compensation for household employees may already be covered under the homeowner’s policy, or is likely available as a relatively low-cost rider.

(One exception to note:  If an individual household employee is paid less than $1700 (2009) in a year, then the household does not have any federal employer tax responsibilities.  You may still have state or other tax obligations.)

For potential employers, there are three main reasons we recommend paying household staff on the books – and many of these reasons apply to employees as well:

Tax Breaks for the Employer:  Household employers are entitled to certain tax breaks if their employee is paid legally.  If you have access to a Flexible Spending Account (or Dependant Care Account) through your own employer, you may use those pre-tax contributions to pay your own household employee’s wages.  If you do not have access to your own FSA, then you may claim the Tax Credit for Child or Dependent Care on your personal income tax return at the end of the year.  The after-tax benefits to you of these breaks can cover all or most of the additional costs otherwise associated with paying an employee “on the books.”  Check with your tax adviser for specifics.

These tax breaks will not be available to households that have not made the appropriate IRS and state tax filings.

Disability, Unemployment and other Important Benefits:  Depending on the state, if a household employee suffers a non-work related injury that prevents them from working, the employee may be eligible to receive financial assistance.  (Work related injuries would be covered by workers’ compensation insurance.)

In general, if a household employee loses their job through no fault of their own, they should be entitled to receive up to six months of unemployment benefits at up to 50% of their salary.

Often, household employees will be eligible for the Earned Income Tax Credit. Employees who are single parents may qualify for this federal tax break, reducing their tax bill by as much as $3,500 per year.  In order to receive this credit, the empoyee must, among other things, have earned some income that has been reported.

Employees paid on the books will receive retirement benefits and basic medical coverage through Social Security and Medicare contributions.  Research shows the average household employee for whom employee payroll taxes have been paid will receive $5 for every $1 they contribute.

People with reported incomes will be establishing a verifiable employment history, which is necessary to qualify for things like car loans, home loans, student loans, credit cards, etc.

Peace of Mind:  This is the important one.  At the start of this post, we said that the risks of non-compliance can come to pass in some unexpected ways.  It is true that IRS has been aggressively pursuing household employers who pay illegally.  It’s also true that in this tough economic environment the IRS is likely going to be stepping up its enforcement activities (and failure to meet these tax obligations is considered tax evasion and can result in expensive back taxes, penalties and interest).

But in our experience, getting audited is not the normal way for families to end up in trouble.  Instead, something happens during the course of the employee’s job that triggers a need for one of the benefits above – and if the employee has been paid off the books, then the needed benefit won’t be there.  The most common scenario by far: The family’s employee loses his or her job and files for unemployment insurance.  The state unemployment agency then checks to make sure that unemployment insurance has been paid, and if it hasn’t (i.e., because you were paying off the books), then the state unemployment agency will start a process that will typically result, in one way or the other, in the family having to make up for the unpaid unemployment insurance premiums, payroll taxes, etc. (plus interest and penalties).  Often, an employee does not realize that unemployment insurance has not been paid where they have been paid off the books. But in this tough economic environment, finding a new job is taking longer than ever, and the chances are good that an employee that has been let go will have to file for unemployment benefits.

In general, a “share care” is any arrangement where two or more families cooperate to hire one nanny to care for the children of all the families.  Typically, a nanny will require only a slightly higher hourly wage for more children.  However, the cooperating families are able to split all the costs among the entire group, so all things being equal, if two families hire a single nanny, the on-going costs to each family can be cut just about in half.

In these uncertain economic times, that makes a lot of sense.  The best child care providers are seasoned, experienced professionals with an established earning history, and a share care holds some potential to allow caring families to stretch their child care budgets.  But these arrangements also present a number of unique issues that the participating families are wise to consider up front.

Over the next several blog entries, we will talk about some of the issues inherent in share care arrangements.  For those who decide the arrangement is right for them, we will try to provide some tips and resources to help you make the arrangement work.

If there is one theme that will come through loud and clear, it is that communication is key – communication among the families, communication with the nanny, communication up front, and communication at every step along the way.  So it’s no surprise that the first key to a successful share care is to make sure that all the participating families are able and comfortable talking through all the issues, some of which may end up being awkward or even contentious.  At Town & Country, we are very happy to work with families who have decided to do a share care to help them find just the right caregiver.  However, we have not been successful trying to match up the participating families – that is, the participating families should organize together first, and start working with an agency or otherwise finding their nanny second.  We suspect that most agencies that are able to successfully find caregivers for share care families take a similar approach.

For Carrie and me, some of the issues we’ll talk about here come from personal experience.  We did a share care for our first nanny, mostly for the cost savings, but also because we partnered with families that were literally “family.”  This meant that our kids spent a good portion of each day with their cousins.  Of course, everything changes, our needs changed, participating families came and went, and we learned a lot in the process.  Hopefully we can share some of our experience with you here.

So with that introduction, to close our first post in this series, here are the main issues that we plan to discuss in upcoming posts:

-The Partnership: Choosing the families in the share care – costs, savings, complexity, how many kids?
-Making the big decisions
-Practical day-to-day issues

• Full and part-time schedules – sharing the costs fairly
• Taxed position or cash?  Some practical considerations
• Whose house?  Where will the Nanny take care of the kids?
• Establishing “Rules of the Road” – driving, mobility, activities and other questions

-Leaving the group, adding new members
-Giving references

Thanks for reading and stay tuned for our next Town & Country Blog entry.

Jens Hillen, Co-President Carrie Hillen, Co-President