Do Background Checks on EMPLOYEES before you hire them.
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Calling Mary Poppins.(training, employment, finances,
and background check procedures for hiring nannies)
Author/s: Stephanie Gallagher
It's a lot easier to say "supercalifragilisticexpialidocious" than to find and keep a good nanny.
Marilyn and Taylor Clark did what thousands of working parents do when they need someone to care for their children: They cracked the Yellow Pages, called a nanny agency and waited for qualified, experienced applicants to show up at their door for interviews. And waited ...
Among the applicants sent by the Cleveland agency they called to find a caregiver for Charlie, 8, Cooper, 2, and Caitie, 6 months, were a woman who called off the interview when Marilyn mentioned that she planned to do a background check and another who was hired and fired after only a month when Marilyn learned she had been arrested for petty theft. "I realized that all these agencies are trying to do is push as many women through the system as they can," she says. "They're not listening to what you're looking for as far as personality, character or other things you emphasize."
The agency disagrees with Clark's harsh assessment, but its president concedes that in the low-supply, high-demand world of nanny referrals, applicants are sometimes sent on interviews before their references have been contacted. This firm does criminal checks only after an applicant has been offered a job--a practice that is not uncommon in the industry.
One thing Clark's experience makes clear is that it is essential for parents to be as demanding when choosing a nanny agency as when choosing the nanny herself. Make sure you know exactly what the agency will do for you and whether various checks will be made before or after you interview an applicant.
Regardless of what kind of help you get, the search for a nanny is always complicated by one simple fact: In the virtually unregulated day-care business, anyone can call herself a nanny.
Karen Caruso, owner of Mind Your Business Inc., in Arden N.C., a company that specializes in background checks of child-care workers, reports that 5% of the 2,500 to 3,500 checks her firm completes each year turn up something fraudulent about the applicant--anything from a fake employment history to a phony reference, undisclosed alias or criminal history.
The Clarks solved their problem by turning to the English Nanny & Governess School, in Chagrin Falls, Ohio. Graduates of the school must submit to a psychological assessment, fingerprint clearance from the FBI and a motor-vehicle background check. Most important to Marilyn Clark is that her nanny, Amy Clarke, deliberately chose to be a nanny. "With an agency, the girls come in and say, `I'll either take a job in a bank or as a nanny,' whereas at the nanny school, they've spent their money to attend the school. You're getting candidates who in their hearts believe it's their calling," Clark says.
You also get nannies who are trained in everything from child behavior and development to nutrition, safety, CPR, burn prevention, creative play and tax responsibilities. Such credentials come at a price, of course. The nannies pay $4,900 to attend the school and be certified as professional nannies; the families who hire graduates pay salaries of $400 to $1,000 a week, and almost always provide living quarters for the nanny. (The Clarks pay $450 and their nanny does not live in their home.) In addition, parents pay the school $2,500 in fees and agree to employ either a housekeeper or part-time cleaning service so the nanny isn't stuck with heavy housework. "Our nannies are educators," says Sheilagh Roth, executive director of the school. "They have invested far too much money on their education to become cleaning women."
A caregiver who didn't attend a professional nanny school can cost a family less--but not necessarily a lot less. Nanny agencies around the country generally charge $100 to $200 to help you search for a caregiver, plus another $1,000 to $3,000 if you hire one of their applicants. In most parts of the country, pay is similar for live-in and live-out nannies, averaging $300 to $600 a week or $8 to $14 an hour, depending on where you live.
In parts of the country where demand is particularly high and supply is tight--an increasingly common scenario these days--families are attempting to lure nannies with attractive benefits, such as paid holidays and vacations, medical and dental insurance, health-club memberships, college-tuition assistance, year-end bonuses, retirement plans and even cars.
The cost for health insurance depends on where you live. For a short-term, six-month plan that doesn't cover preexisting conditions, you'll probably pay $50 to $75 a month. A continuing plan that covers preexisting conditions will cost somewhere between $125 and $250 a month. The Clarks get off relatively easy on this point, paying the $70 a month it costs their nanny's husband to add her to his company's health plan.
YOUR RESPONSIBILITIES AS AN EMPLOYER
As if finding the right person were not harrowing enough, once you hire that nanny you're also saddled with a new burden--you're an employer.
And as an employer, you're required to pay social security, medicare and unemployment-insurance taxes. The social security and medicare tax requirement kicks in when your nanny's annual wages exceed $1,100; the federal unemployment tax is owed when you pay more than $1,000 in any calendar quarter. (State requirements vary; check with local tax authorities.) The social security and medicare tax is 15.3% of pay. Payment of the tax is typically split evenly between the parents and the nanny (through payroll deductions), but many parents shoulder the entire burden to give their nanny more take-home pay. Regardless of whether the nanny pays half the tax, the parents are responsible for remitting the entire 15.3% to the IRS, either in quarterly estimated tax payments or as part of the federal income tax withheld from their own paychecks.
Nannies owe income taxes, too, and if you withhold those taxes, you have to get the money to the federal government either through quarterly estimated payments or withholding from your paycheck. All states except California require quarterly payments. If you don't withhold the nanny's taxes, it is up to her to make quarterly estimated tax payments.
Parents employers also have to shell out money for unemployment insurance. At the cost is minimal--top-out at $56 per year per worker--and like social security and medicare it is included in family's federal estimated tax payments or paycheck withholding. State unemployment insurance is typically 2% to 4% of the nanny's salary, up to as much as $250 a year.
For many parents, it's not the difficulty forms or even the amount of tax they have to pay that drives them crazy--it's keeping track of the deadlines. Once you're registered as an employer, most states send you a blank return each quarter for unemployment insurance, but state income-tax withholding is frequently done with coupon books, which means you have to keep track of the due dates. Often, state and federal deadlines do not coincide.
Several nanny-tax services can help (see the box at left for details). But if you want to handle the taxes yourself, contact the IRS at 800-829-3676 to get a federal employer identification number. Ask for Form SS-4 and Publication 926. You'll also need to contact your state tax authorities. If you need help getting started, Home/ Work Solutions (800-626.4829) has a Quick Start guide ($175) that gives you sample completed tax forms, a calendar of due dates for each state and a handbook that explains the process step by step. And you can get an idea of how much to withhold from your nanny's paycheck by checking out the free Nanny Tax Calculator on the Home/Work Solutions Web site (www.4nannytaxes.com/freecalculator.htm).
WORKER'S COMPENSATION. In most states, household employers must buy worker's-compensation coverage. This insurance, which is provided through a state insurance fund or by private insurers, protects you in case your nanny is hurt on the job. For example, if your nanny slips in your kitchen and breaks her leg, worker's comp will not only cover her medical bills, it also compensates her for wages lost due to the injury and protects you from being sued for negligence. Even if it is not required in your state, this insurance is a must for any household employer.
Premiums shouldn't be more than $500 a year--and are often much less. (The Clarks pay about $100 a year for coverage through a state fund.) Check with your insurance agent for rates.
CAR INSURANCE. If your nanny will be driving your children to school or other activities, it's vital that you update your auto insurance. "Almost all policies have an exclusion for using the car for business purposes," notes John Lewis, a Boston lawyer who specializes in personal-injury litigation. The question is whether a nanny who drives your kids to school is driving the car for business purposes. Check with your insurance agent to be sure. You may have to add the nanny to your policy, or you may need to change the coverage to include commercial use of the car.
Don't assume that if your nanny uses her own car you're off the hook. The same rules apply. If the nanny is using her car for work-related business and doesn't have a commercial policy, her insurance may not pay if she gets into an accident. If an accident occurs while she's working as your employee, you could be liable if she is sued, and your insurance will not cover you if the nanny is not on your policy. To be safe, either have the nanny use your car and add her to your policy or purchase additional business and liability coverage for her on her own policy.
KEEPING EVERYBODY HAPPY
It's tempting to assume that once you've hired the right person and dealt with the legal issues, you can rest easy. But few nanny-family relationships run completely smoothly. Because this person is working inside your home and making decisions about the welfare and well-being of your children, there are bound to be conflicts. You're more likely to enjoy a successful relationship if you put your expectations in writing. Top-notch nanny agencies suggest a contract that addresses the following issues:
HOURS. What time does the nanny's work day begin? What time does it end? If the parents get home late, does overtime kick in? If so, at what rate? What rate will the nanny be paid for additional evening or weekend babysitting? How will the nanny keep track of her extra hours? (Suggestion: Keep a calendar in the kitchen to record overtime hours.) If the nanny lives in, will she be expected to return home in the evenings by a certain time?
EMPLOYMENT TERM. What is the length of the contract? (It's usually one year.) How much notice do you expect if the nanny decides to leave? Will severance be paid if the parents decide to let the nanny go before the end of the contract?
PAY. Will the nanny be paid hourly or receive a flat weekly or monthly salary? When is her payday? Will there be a performance review (and when) at which she can negotiate a raise? Will the family withhold income taxes for the nanny? Will she pay her share of social security and medicare taxes, or will the parents assume that burden? Can the nanny expect a bonus? If so, when?
BENEFITS. Will the family provide health insurance? What paid holidays will the nanny receive? How are vacations handled? Will she be paid for sick days? Will she have use of the family car? If not, will the family pay for expenses if she uses her car for family business?
CHILDREN'S SCHEDULES. What are children's wake-up and bed times? When do they take naps? What are the rules regarding visits by children's friends? Will there be a petty-cash fund for incidental expenses related to activities with the children?
HOUSEKEEPING. Who handles light housework for the family--such as doing laundry and washing dishes?
FOOD. Who makes meals and when? Who does the grocery shopping? Can the nanny add foods she likes to the grocery list? If she isn't living in, what food is she entitled to? Will she be invited to eat with the family sometimes, always or rarely?
HOUSE RULES. Does the family prefer a cordial but formal relationship or someone to pal around with? If the nanny lives in, what boundaries should be set with the children to ensure that she has her privacy during her off hours? Is the nanny allowed to have guests during work hours? What about off hours? Is she allowed to make personal calls during work hours? If she lives in, will she have her own phone line? Who will pay for long-distance charges? How should the nanny dress for work?
As detailed as the contract might be, other issues are sure to crop up. It's best to set aside time every week to discuss how things are going.
RELATED ARTICLE: Important Numbers for Household Employers
FOR BACKGROUND CHECKS:
* Mind Your Business Inc. (888-869-2462), or www.mybinc.com). Fee: $200. Includes a seven-year criminal-history search, motor-vehicle-records search, credit history, verification of education, three employment references and a social-security-number trace. Can usually be accomplished within five business days.
* Background Research International (800-419-4194) Fee: $100 to $200 for criminal, references and credit checks. The process takes from three to seven working days.
FOR HEALTH INSURANCE:
* Richard Eisenberg of Eisenberg Associates (800-777-5765) specializes in health insurance and benefits for nannies.
FOR TAX HELP:
* Home/Work Solutions (800-626-4829). For $315 a year, plus a one-time $100 registration fee, Home/Work will register you with the tax authorities, calculate taxes and withholding, and prepare signature-ready tax forms. For $50 a month, Home/ Work will do all of the above plus debit your bank account or credit card and issue weekly paychecks to your nanny.
* Breedlove and Associates (800-723-9961, or www.breedloveinc .com) provides a similar tax-preparation service for $325 a year, and a payroll service for $450 to $600 a year.
PROFESSIONAL NANNY SCHOOLS:
* The English Nanny & Governess School (800-733-1984, or www.nanny-governess.com).
* The American Council of Nanny Schools (517-686-9417) is a coalition of 14 community colleges and professional nanny schools that graduate almost 300 nannies annually. You can call for a list of member schools.
COPYRIGHT 1999 The Kiplinger Washington Editors, Inc.in association with The Gale Group and LookSmart. COPYRIGHT 2000 Gale Group
