Temp nanny and unemployment

[Anonymous]

[posted to the main forum but didn't really get any info so trying again]


Hi, I recently read a thread where someone mentioned they did not have to pay unemployment benefits after firing a nanny for gross misconduct. This made me wonder how unemployment benefits generally work. In particular, we are in need of a temp nanny for 6 months until we send DS to daycare in the fall. Will we need to pay unemployment benefits after the temp contract is over if the nanny can't find a new job? If so, how much would it be?

Also, I read elsewhere that having employees claim uninsurance benefits frequently can increase the employers unemployment insurance premium. Is that correct? How does that work?

To be clear, I support nannies and temp nannies getting unemployment - I am just wondering how it works for the employer. My previous beliefs were that employers contribute towards UI as a percentage of paid salaries, but then when it comes time for an ex-employee to get unemployment benefits, the payments come from the big pot of money that everyone already contributed towards. Is that not the case?

Btw we are in Massachusetts. Thanks!

[Anonymous]

Unemployment gets paid out of the money that was paid in during employment. And, yes, your premium would increase if you were to hire another employee.

[Anonymous]

Yes, you pay unemployment taxes as a percentage of your nanny's gross wages while they are employed by you. Sometimes there's a cap on the wages you need to pay UI tax on called a wage base. Nannies can get unemployment if they are let go through no fault of their own. For example, your kids are now in school and no longer need a nanny. You are moving and need to find a nanny closer to you. Gross misconduct or fireable offenses do not qualify a nanny for unemployment. They could claim it but you could deny it. When a nanny is on unemployment, they are paid out of the state's UI fund that all employers contribute to. I don't think your UI tax will go up much if at all if your nanny claims unemployment. If you're a business with a mass layoff, or continually laying off people, then maybe. But a family with a nanny. Probably not.

[Anonymous]

Ah okay, got it! Thanks for responses. I’m going to guess that the people that say they didn’t “have to pay” means they contested and due to that, the state didn’t pay unemployment, not the individual employer.

[Anonymous]

Anonymous wrote:Ah okay, got it! Thanks for responses. I’m going to guess that the people that say they didn’t “have to pay” means they contested and due to that, the state didn’t pay unemployment, not the individual employer.

“Didn’t have to pay” also refers to the employer not needing to pay a higher rate, either because they won’t have any other employees or because the claim was rejected.

[Anonymous]

Contact MA Dept of Labor for state specific information. It varies state by state. You can deny the claim but the nanny can appeal.
And honestly unless there was something extraordinary involved why would you deny the claim?