Hiring a Nanny: How to Get All Your Legal Ducks in a Row

this post answers the following questions
1. Is it difficult to hire a nanny?
2. Are there any necessary things I have to do before I can hire a nanny?
3. How will I know if the nanny I’m considering hiring can legally work?
4. Why is it important to report the information of my nanny?
5. Do I need a payroll system for my nanny that complies with current state and federal labor laws?

Since a nanny is much more than someone who comes over to watch your kids for a few hours on a Friday night, many parents find the process of hiring one to be overwhelming. If you’re thinking about hiring a nanny, the good news is the hiring process doesn’t have to be so difficult.

By knowing in advance exactly what you need to do, you won’t have to worry about encountering any surprises that end up costing you time or money. When it comes to all the legal aspects of hiring a nanny, here’s how to get all of your ducks in a row:

  1. You will need to have a federal and a state employer identification number. File for these numbers before you begin to hire. Your State Department of Labor or Employment will handle the license. To apply for your federal identification number, complete an Internal Revenue Service form SS-4.
  2. Ask for verification that the person you’re considering hiring can legally work in the United States. Complete an Employment Eligibility Verification Form I-9 to verify that your potential nanny can work in the country legally. This can be easily obtained online from several different sources, including the Department of Homeland Security and the Office of U.S. Citizenship & Immigration Services.
  3. Report to the state government with the information on the person you have hired. Once you ultimately find and hire your perfect nanny, this report must be completed and sent to your state agency within the time it specifies. The procedure for reporting and the time frame varies from state to state, so check your state’s website for the specifics.
  4. You will need a payroll system that complies with current State and Federal labor laws. At the very least, nannies who don’t live with you must earn minimum wage for every hour of work. In a few states, such as Massachusetts, employees may be entitled to overtime pay. As an employer, you must pay Federal Unemployment tax, Medicare and Social Security. These are sometimes called the “Nanny Tax.” Additionally, employers in some states may have to pay worker’s compensation, disability and state unemployment insurance. Many employers of nannies will withhold the portion of taxes the nanny is required to pay so that she will not have to pay quarterly. In this case, the employee will need to complete the Employee’s Withholding Allowance Certificate (Form W-4). If the entire process seems overwhelming, consider hiring a payroll service provider to handle this for you. And even if you do take care of it on your own, it’s a good idea to at least run everything past your accountant so they can check for any mistakes or problems.
  5. You are responsible for filing at the end of each year

The nanny must have her W-2 form by January 31st. You need to file the W-2 form and a W-3 form with the Social Security Administration by the 28th of February each year.

One last thing to keep in mind is that a nanny is an employee, and must be classified as such and not an independent contractor.

While this sounds like a lot of work, you have to remember that hiring a nanny is an investment in your family. By doing it properly the first time around, you’ll be able to reap the benefits for years to come without encountering any stressful issues!

John Winthorp is a writer for www.nanny.net. John writes tips and advice for nannies

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