Hiring someone to look after your kids, do the cleaning, or take care of an aging relative gives you freedom and peace of mind, but the intimate nature of the relationship can make things tricky. Here, a concise guide to getting it right.
Lay a Strong Foundation.
Whether you hired someone this year or five years ago, creating a work agreement together sets the stage for a respectful partnership, says Ilana Berger, executive director of Hand in Hand, the Domestic Employers Network (domesticemployers.org), a national group of people who employ nannies, housecleaners, and home attendants. The agreement should cover expectations and how you’ll handle things such as sick days, time off, payment, and benefits. Contractsfornannies.com makes the agreement process easy and offers a free template.
Determine a Fair Wage.
There are no set wages for domestic workers, but Berger says the number should take into account the cost of living in your area (for exact figures, check out livingwage.mit.edu). On average, housecleaners, who work relatively short hours and travel more between jobs, should be paid at least $20 an hour; caregivers should get at least $15 an hour. If responsibilities change—you have another child, say, or ask your caregiver to start cooking dinner once a week—the wage should be updated to reflect that. A year-end bonus (usually one to two weeks’ pay) should be covered in your work agreement and reported as taxable income.
Pay on the Books.
When you pay legally—meaning you withhold and pay taxes on your employee’s wages—your trusted nanny or cleaner may be able to get benefits she can’t get any other way, including Social Security, Medicare, unemployment, and disability. Paying legally also qualifies you for tax breaks, including the Dependent Care Account, which is like a flexible spending account for childcare, and the Child and Dependent Care tax credit, which can save most people $600 with one child and $1,200 with two or more.
Factor in Taxes.
You’re responsible for paying federal unemployment tax if you pay workers $1,000 or more per calendar quarter. If you’re paying workers $2,000 or more for the year, then you need to withhold and pay Social Security and Medicare taxes. Sorting through tax rules and abiding by state regulations can be challenging. Consider a payroll and tax service that offers consultations and resources, like HomePay or HomeWork Solutions.
Do Regular Check-Ins.
Domestic work is fraught. “You’re hiring someone to take care of the people you love the most in the place you love the most,” says Berger. “A lot of it is figured out as you go, which is why we recommend regular check-ins, weekly or monthly.” Also key: addressing concerns as they arise, before they boil over, and periodically revising your work agreement together so you’re sure you, your partner (if you have one), and your employee are on the same page. Just keep work conversations with your nanny away from little ears.