Please note: this blogpost covers domestic employees in New York State. It is intended to educate nannies and housekeepers on the benefits of accepting legally paid salaries; it is not to replace the advice of a lawyer, as the laws that are constantly changing. Please consult a reputable payroll company such as HomeWork Solutions for more information on your specific state's domestic employment laws and procedures.
We here at KITH & KIN often hear candidates state that they only want to be paid in cash, despite being able to accept legal pay, for many understandable reasons. While admittedly, it is the norm for many domestic workers to be paid illegally in cash (an estimated 75%!), there are a myriad of benefits and protections household employees lose out on by being paid in cash, and when accepting cash only for a nanny job, you are also assuming all risks for you and your family's future financial and health situation, especially should you find yourself out of work for a period of time -- a heavy and costly burden to bear!
With the advent of laws like Lulu and Leo's Law and many advocacy groups like the NDWA calling for better protections for both families and workers, the trend will be for more and more domestic workers to be paid in a legal manner. For this reason, we have compiled the benefits of legal pay. Here are our top 10 reasons why nannies and housekeepers should insist on being paid "on the books" right now.
1. "Professional pay" translates to "professional treatment", and further legitimizes your work as a professional career.
When you insist on being paid legally, this demonstrates to a family that you take your job seriously as a professional who needs to be compensated fairly and legally for your work. It shows that you are committed to your work supporting them, and that you are also relying on them to support you as you make a long-term living, just as you would in any other field.
When your employer agrees to pay legally, they are demonstrating their belief that you deserve legal protections and benefits, just as they receive in their work, too! Even though they may be offering a lot of great benefits like guaranteed minimum hours and paid time-off, they also believe that ethically, you deserve an extra level of protection as individual and professional.
2. You have secure income available, even if laid off.
Let’s say that on Sunday night, you get a text from your boss that tomorrow, you are no longer needed because a spot opened at daycare, and their child starts the next morning. Now, most parents would not leave you high and dry without notice, (especially if you have a solid work agreement in place before the job commences!), however you may never know your employer's private financial situation or debts. They may appear to have it all, and then the economy crashes overnight, or they find out they have lost every penny to a Ponzi scheme, and now they find themselves unable to pay you the $2500 buffer you were relying on. Stranger things have happened; you need to be protected from situations that are outside of your control.
While domestic employees in New York are hired “at-will”, meaning you may be terminated without notice or reason at any time, unemployment is there to provide you with a financial buffer while you search for a new job. If you’re laid off due to no fault of your own, and you are able to work in some industry, you are eligible - even in some instances of justifiable firing, you may still be eligible. This is only available to people who are paid legally in their most recent long-term position.
3. Medical costs or loss of income covered via Workmans Compensation if you’re injured on the job (State-by-State).
Even if you are outside of NYS, should you have an injury that leads to a long leave from work, you may be eligible to receive Disability coverage from the government as well. This would cover part of your income, and make sure that you are not in an even larger financial bind. If you are out of work because of an injury, but don't have traceable or substantial income reported, the income coverage would be significantly lowered, if available at all.
4. You are eligible for Paid Family-Leave.
The details and benefits will upgrade year to year, but beginning in 2019, you would be eligible for 10 weeks paid leave per year, up to 55% of your weekly salary, with a maximum of roughly $746/week; By 2021, 67% of your salary may be covered for up to 12 weeks. This is separate from FMLA, and is specific to New York State. For more information, click here.
5. Protection in the event you, or your bosses, get audited by the government.
Any employer who chooses to pay their employee 'under the table' runs the risk of being audited, particularly if all parents are working full-time, and they can't prove payments made for childcare. An audit will have their finances called into question by the government, and if your employer is audited, you too may be at risk for your portion of employment taxes. If your employer doesn't remit taxes on your behalf, you may be asked to account for those taxes by the government. While it is not the law that the employers withhold your portion of taxes in New York for you (you must request that they do this, and the majority do when using a payroll service), it is the law that you pay your portion. If it is not withheld, we recommend setting aside a conservative percentage based on your state in a separate savings account so you have enough to pay at the end of the year.
If you or your employers were to be audited, the government makes a habit of looking back several years, meaning you could be set up on a hefty payment plan to hand over whatever amount you would have owed in taxes from previous years.
6. Provides verifiable, traceable income to rent or buy a home, car or other big-ticket purchases.
Should the day come when you want to make a big "life-investment", be it purchasing a new home or car, or even renting a new apartment, you will often be required to provide proof of income; not just for present time, but also from the past two years! Lenders want to make sure you are a consistent earner and responsible spender, and you will need a paper trail to prove your track-record of financial credibility. Cash-employees will often have a difficult (likely impossible) time providing legitimate proof of income that would hold up to scrutiny. This can be a real hold-up, and potential block, if you are in the throes of purchasing a home.
Not buying a car, home, or renting an apartment now? Think two or three years ahead. Even if your credit is terrible, First Time Homebuyer Loans make this dream possible for more people, so as home prices continue to rise, now is a great time to get on the books and start accepting legal pay!
7. Easier mental leap to start your career with legal pay now, rather than years in.
Take it from us, the people who interview many qualified, career candidates who have been paid cash for years: it is very challenging for nannies and housekeeper to leap from a high dollar cash take-home salary per week to a far lower net wage. When you are not used to this, it will require a large lifestyle adjustment for yourself and family, when that time comes.
Talking to your employer about transitioning from a cash-salary, to an "on the books" salary is going to take a big shift. Essentially your employer will have to make a drastic increase in your pre-taxed (gross) pay-rate in order for you to be taking home the same amount as you were before, and it's possible that financially, they simply cannot swing it, as they will be paying 12-25% more than they are used to, depending on where you live.
If your employer isn't able to increase your rate enough for you to be taking home a net-salary that is comparable to your cash salary, meet in the middle! Start by taking a lower take-home wage, knowing that they are giving you a gross-wage raise. That being said, employees who are paid on the books, will also be eligible for a tax-return at the end of the fiscal year where you would get a portion of that back, so don't be too demanding of your employers if you really love your job in all other aspects.
8. You’re building your Social Security fund, and making sure you’re eligible for disability benefits, too.
The amount of taxable income which you report to the government each year makes up your 'covered income' and directly affects the amount of money you may receive each month when you retire. In other words, if you pay in for 45 years instead of 10, you will have far more to retire on. Therefore, for your future, it's better to start paying income taxes sooner rather than later!
9. Helps better protect you from “bad-apple” bosses.
Finding a boss who is willing to pay you on-the-books, means that your boss is more likely to view you as an employee with certain inalienable rights. A working agreement that is based on a clear contract and a taxed salary can protect you from various instances of employee discrimination, wrongful termination, harassment in the workplace, withholding of overtime, and various other workplace injustices.
Many employers who pay cash may hesitate to put anything in writing to avoid a paper trail of employment in the event they were to be audited -- this translates to no work agreement for you or contract for you to fall back on or reference.
10. Plainly, it’s the right thing to do!
Last of all, paying your taxes is the right thing to do! The money you pay in taxes goes to many places. In addition to paying the salaries of government workers, your tax dollars also help to support common resources that we all utilize, such as safe and well-maintained roads, police and fire departments, post-offices, public libraries and parks, as well as caring for your fellow neighbors and children who presently may not be able to care for themselves.
In conclusion, starting a job with mutual professional respect is the best foot to start on. By you and your employer insisting to operate according to the law affirms that this is a true, professional career, with the commitment to integrity and respect toward both parties.
But aren't nannies 1099 workers? On the family/employer side of things, there is sometimes confusion about the classification of domestic employees and who is responsible for their taxes. However, make no mistake: by law, nannies and housekeepers are classified as household employees of the family, unless they are hired through a company who is paying them as an employee; nannies and housekeepers are not contractors. Families must provide you a W-2 at the end of the year.
Have a question about being paid or hiring "on-the-books" versus in cash? Send us an email and we will do our best to direct you to where you may find your answer.
Earlier this summer, New York Senator Andrew Lanza and Assemblyman Steve Otis together announced a new piece of legislature which could have a profound effect on the childcare industry. The bill which they have proposed to Governor Cuomo essentially serves to criminalize the misrepresentation of a caregiver's qualifications or experience. If this bill is passed into law, not only will it provide much more concrete reassurance for parents who are seeking qualified childcare, it will also serve to legitimize the job market for nannies themselves who could have a greater precedent to demand better working rights as domestic employees.
This new passage of legislation will hold legally accountable anyone who is applying for an in-home childcare position, or providing a reference on behalf of the individual being considered. In either instance, an individual who is found to have provided a false written statement in support of oneself, or another person, for purposes of securing employment as a caregiver to children in the home, could now be found guilty of a Class A Misdemeanor and face up to 6 months imprisonment. The bill would target those who make false statements about the applicant’s background related to their ability to safely provide care.
To many, the introduction of such a bill might seem extraneous, something of a given. Unfortunately, this is far from the case. The supplying of false references, and mis-information by nanny candidates is rampant, common practice by applicants who lack actual experience or qualification in the field. For busy parents who do not have the time or resources to conduct thorough background checks and employment verification, these discrepancies fall quietly through the cracks. What is further, however, is that up until this point, there is no legal ramification holding nanny candidates, or fictitious references, accountable for providing false information in pursuit of employment.
Essentially, right now a nanny who you have hired based on false information, cannot be held accountable for misrepresenting their qualifications in a court of law. The consequences of these distortions of the truth become tragic when, as in the epithetic case of Lulu and Leo Krim, parents hire an unqualified and improperly vetted nanny based on false accounts of experience by the candidate and others. It is the Krim parents themselves who have worked tirelessly in the years since the deaths of their two young children to bring this new piece of legislation into reality. The 2012 murder of their children Lulu and Leo Krim at the hands of their caregiver who had no previous experience caring for children highlighted the need for greater scrutiny of those who seek these positions.
Assemblyman Otis, stated, "With this legislation, New York law will be clear that misrepresentation of qualifications for caregivers for children is against the law. With accurate information, the safety of families and children will be safeguarded.” Future parents can rest a little easier, when leaving their child in the hands of a hired caretaker, that the individual is who they say they are, and actually has the experience stated on their resume.
Additionally, this new bill provides that “caregiver” be defined as someone hired to provide fifteen or more hours of care per week in the home of such children or in the home of the caregiver, with the exception of those entities licensed under the social services law. For nannies, the definitional provisions of this new bill could actually be a professional asset. By giving a clear and explicit interpretation to the definition of domestic work, this law could lay a foundation for future legislation regarding caregiver and other in-home roles. Until 2010, when New York became the first state to enact a Domestic Workers Bill of Rights, domestic workers existed largely starved of any state-sanctioned workers rights. Even now, the rights for in-home employees are much less comprehensive than for workers of most other sectors. While Lulu and Leo's Law, on the one hand, aims to increase accountability by domestic workers by obliging them to provide factual resumes and references, this increased legitimacy for domestic workers will, in turn, give a greater precedent for these workers to demand certain legal rights from their employers and from the law. Every step to legitimize the scope of domestic work, is a step in the right direction!
Unfamiliar with Lulu and Leo's story? Read up on their organization here.
Are you a nanny here in NYC and wondering how the enactment of Lulu and Leo's law will affect you? Get in touch with us and ask us any questions and we're happy to try and answer them!
Are you ready to redo your professional nanny resume, and make sure its up to par? Check out our previous blog-post on How to Write a Nanny Resume Like a Champ
Last month, our founder, Christa, sat down for a conversation with the founder of the Prenatal Yoga Center, Deb Flashenberg, on her podcast Yoga | Birth | Babies. The episode is called NANNY 101. Shared within it are tips and tricks for hiring and employing a nanny or babysitter, whether temporarily or long-term. It's completely appropriate and helpful for nannies, too!
Have a listen here and catch some helpful gems!
Are you overwhelmed by the thought of how to hire a nanny in NYC?
Have you started the nanny search on your own, but need to run a nanny background check?
We are here to help you.
Send us an email and tell us about your family's needs - we'd love to help you hire a nanny in NYC, or help you vet your own candidates properly!
Finding a new nanny job in NYC can be a daunting endeavor. There will be a lot of highly experienced, ready-for-anything nannies vying for that amazing position. When you’re up against dozens of other competent nanny candidates, families and agencies will often not even consider candidates who don’t have a professional nanny resume. Having a polished, professional nanny resume is the very best way to ensure that you will get your foot in the door past that first hurdle, and onto an interview.
When working with kids, it’s okay to have a little more fun on your resume than you might in other job fields - but you want to make sure that you’re still keeping it professional and always including a few key pieces of information.
Search our archives for previous topics!
Copyright, Kith and Kin NYC LLC, 2018. Licensed and bonded by the NY State Department of Consumer Affairs, License #2038511-DCA. Kith & Kin Household Staffing Agency seeks to pair exceptional caregivers with vibrant families. Candidates who are legally authorized to work in the United States, and meet our requirements are encouraged to send us your résumé if you are seeking a position as a Nanny, Manny, Housekeeper, Governess, Mother's Helper, or a Baby Nurse / Newborn Care Specialist in New York City, New York State, New Jersey, or Connecticut. Kith & Kin Household Staffing Agency does not discriminate on the basis of race, creed, color, ethnicity, national origin, religion, sex, sexual orientation, gender expression, age, height, weight, physical disabilities, veteran status, and marital status. We are a nanny agency in NYC that services the metro area.
Hours are by appointment only. Address: 195 Montague Street, Brooklyn, NY 11201 and 450 Lexington Ave, New York, NY 10017 We make house calls! Call us at 929-445-2016. Unfortunately, due to the high volume of interest, no calls regarding available jobs are accepted. Please check our job board here.