Reply to Why are nannies treated like both hourly and salaried employees?

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Reply to "Why are nannies treated like both hourly and salaried employees?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Nannies are hourly employees. The IRS has been very clear on this point, and [b]any attempt to salary[/b] or 1099 them is illegal (which doesn't stop people from doing it).

You are not required to provide a nanny with paid vacation days, but that may make you a less attractive employer if others are doing that. Depending on the state, you may be required to provide a nanny with paid sick leave (in California it's required).[/quote]

This is not quite true.  You can give a nanny a salary. But if you were to break the salary down into an hourly rate, the nanny must be making at least minimum wage.  When determining that you are paying at least minimum wage, you also have to calculate the rate over 40 hours at 1.5 times the hourly rate. We used to pay our nanny a $50K salary for a 50 hour work week.  This meant that she was guaranteed to be paid for 50 hours of a work every week (whether she worked that much or not).  If she actually worked more than 50 hours, we would pay for each additional hour.  There were many weeks she was paid for 50 hours but only worked 30-35. She also received 2 weeks paid vacation, 1 week of paid sick leave, and was paid anytime we were off or on vacation.  In total, she easily had 6 weeks of paid leave every year.  She definitely made more from the salary than she would have if I just paid her by actual hours worked. [/quote]
From a tax perspective you are describing an hourly worker. The relevant question is exempt vs. non-exempt. Domestic workers are non-exempt. Whether you guarantee them a specific number of hours is irrelevant. You still need to track the number of hours worked in a single week, and pay overtime if they go over 40. They also have to be paid on a W-2 and not a 1099, because their work can never be categorized as being discretionary enough to be considered an independent contractor.[/quote]

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