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Since our inception in 1992, we’ve seen a monumental shift in the way families and
employees view compliance. Once commonly viewed as something only politicians needed
to worry about, it is now widely accepted that paying legally is the right thing
– and the wise thing – to do. Here’s why:
Audit and Lawsuit Prevention. Families who pay legally
do not have to worry about charges of conspiring to commit tax evasion – a serious
felony charge that carries fines up to $250,000, jail time and loss of professional
license – or legal disputes levied by disgruntled former employees. Think of it
as insurance against tax and legal problems.
Tax Breaks. There is a common misperception that “nanny
tax” compliance will be prohibitively expensive. The truth is most families – regardless
of income level – qualify for tax breaks that offset most – if not all – of the
employer tax costs. (See "Dependent
Care Tax Breaks" for more details or visit our
Employer Budget Calculator to get an estimate of your tax breaks).
Professional Benefits. When a family pays legally, the
employee receives important short-term and long-term benefits, such as social security,
Medicare, unemployment, disability, and an ability to obtain loans/credit. These
benefits and protections have a dramatic impact on the perceived professionalism
of the position and, therefore, the quality and duration of the employment relationship.
The Household Employer’s Legal Responsibilities
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