childcare & domestic staff
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In the Nanny industry, legal pay has always been required, but is often disregarded. While paying under-the-table is perceived to be low-risk in terms of getting caught, the Covid pandemic has brought to light the importance of being paid legally as a nanny.

While it may seem that cash has its advantages, the benefits of legal pay far outweigh cash convenience for nannies. Our friends at INA and GTM, Aunt Ann’s preferred household payroll service, provide the top reasons to help you explain to the family why it is in everyone’s best interests to pay legally:

  • If you had your hours reduced, have been laid off, or missed work due to the coronavirus, and you have been paid legally, you are eligible for state and federal assistance programs to replace lost wages.
  • You are eligible for the expanded unemployment benefits and new paid sick and family leave laws.
  • You are eligible for employer-paid benefits like health insurance and retirement plans.
  • Families can take advantage of tax credits from pandemic-related legislation.
  • If you get hurt on the job, workers’ compensation insurance – which can only be obtained if you’re being paid legally – protects you and the family, and helps pay medical bills and replace lost wages.
  • Employers must report wages and the taxes they withheld for you on their personal income tax return. The IRS may investigate, fine, or penalize families that don’t follow the law.
  • Not paying legally denies funds to your Social Security account, and impedes your ability to obtain credit and loans and show a verifiable income.
  • Families can claim a portion of your wages for the Child and Dependent Care tax credit, along with their employer’s flexible-spending plan (commonly called an FSA) and deduct your salary as a qualifying expense.

When approaching a family about why they should pay on the books, feel free to share the benefits of complying with household employment laws. You can also help them better understand how you can take advantage of the benefits of being paid legally.