Child care: Hiring--and keeping--someone who'll do it right
Hiringand keepingsomeone who'll do it right
Here's what you need to know about recruiting, monitoring, paying, and living with a nanny or au pair.
By Susan Harrington Preston
A bullet-pocked car with a blown-out back window is not what you want to picture when you think of your children's nanny. Yet that's the memory that lingers with Randy V. Heysek, a Lakeland, FL, radiation oncologist whose full-time babysitter disappeared a few years ago. Weeks later, after Heysek and his wife got an impoundment notice from a sheriff (Heysek's name was on the car lien), they learned that the sitter had used her car in a series of thefts that ended with an onlooker firing a shotgun as she and her boyfriend fled.
If Heysek's story doesn't put the fear of God into you, it should. He'd done everything right when he hired the nanny. He hadn't relied on the employment agency that had referred her; he'd paid for his own background checks. But the private investigator he'd hired had turned up nothing to suggest the nanny would so flagrantly flout the law.
Perhaps your nanny isn't a Bonnie seeking her Clyde, but how do you know she won't become an abusive troll when she's alone with your kids? To minimize that possibility, you must not only hire well, but supervise appropriately. This article will tell you how to do both. It will tell you, too, what a good nanny will cost you in salary, benefits, and living quarters, so you can be sure to pay enough to keep her.
Where to find the right child care employee
For full-time child care, you have two options: nannies, who are either US citizens or residents with green cards; or au pairs, who come to the US temporarily under student visas. Unless you find a good prospect through a recommendation from a friend, you'll go through an employment agency to recruit either.
An agency will screen employees, but the quality and thoroughness of the screening ranges widely. "We talk to former employers, check for a valid driver's license, and do criminal background checks," says Keith Greenhouse, owner of Pavillion employment agency in New York City, which places nannies through a subsidiary, The Nanny Authority (www.nannyauthority.com ).
An agency's liability is limited. "They're basically responsible for doing what they say they've done," says Becky Kavanaugh, president of the International Nanny Association (www.nanny.org ), based in Collingswood, NJ. "They may do a criminal records check in the state she says she's lived in for the last 10 years, for instance, but that person may have a record from another state."
One way to fill in the background picture is to hire from a child care training program, such as one offered by a community college, if the program also involves background screening. The Mercedes of such programs is the English Nanny & Governess School (www.nanny-governess.com ) of Chagrin Falls, OH. Its full-time, three-month curriculum is unique in the United States in that it requires students to live on campus. The advantage of live-in schooling for live-in nannies, of course, is that a prospect is less likely to surprise you with a hidden personality problem once she's hired.
The placement fee for hiring a graduate of the program, though, is 20 percent of the nanny's annual salary. The Nanny Authority's fees range from $2,700 to six weeks' salary, depending on the nanny's pay. "I haven't seen a fee below $1,000," says Kavanaugh.
Alternatively, you can do your own background work. On the Web, you can order criminal background checks for $20 to $100, depending on how many states are involved, as well as driver's license checksthe latter not only to verify ID, but to check for a pattern of violations that implies irresponsibility.
A few private investigators, such as Michael D. Rothman of New York City, offer background checks specifically for nannies. Rothman researches prior addresses and performs criminal checks in those states, checks the prospect's driver's license, and verifies her Social Security number. "For a couple of hundred dollars, we're doing a very, very basic check," he cautions.
Whether or not you pay a professional to do a background check, however, it's important that you at least phone some of the nanny's references. "Ask each one different questions," advises Kavanaugh. And pay careful attention to your own interview with the nanny, which is the most important screening of all. The box below suggests questions to ask.
Au pairsworking students from foreign lands
Au pairs come to this country under the auspices of the State Department. The au pair program, described on the department's Web site (exchanges.state.gov), allows young high school graduates to stay for one year, during which they must earn six credit units at a post-secondary school.
Eight agencies around the country place au pairs, and roughly 12,000 work in the United States in any given year. Host families must treat the au pair as part of the family, and they, too, must pass a background check.
The State Department requires au pair candidates to be 18 to 26 years old and "proficient" in spoken English. It also requires agencies to verify the au pair's education, get three nonfamily personal and employment references, run a criminal background check, and administer a personality profile test.
Screening out bad apples is tougher with au pairs than with nannies, no matter how well an agency performs background checks. You can't easily follow up with your own reference checks. Your interview with the au pair must be conducted by telephone, too.
Slipups do occurand not always on the au pair side. "We picked up our first au pair three months early, because her original host family expected her to share a bedroom with their three sons," says internist Gregory A. Hood of Coronado, CA.
Hood and his wife turned to au pairs when their search for a US nanny came up dry. "We interviewed dozens of candidates," he says. "They all seemed a little dull." Hood's advice on living with au pairs appears below.
Monitoring your nanny or au pair
Once you've picked a nanny or au pair, you can't just sit back and relax; Heysek isn't alone in seeing a Nanny Jekyll turn into a Nanny Hyde over the course of employment. "One of our au pairs did a fabulous job at first," says Hood. "Then we got into problems with curfew, lying, and smoking."
One way to track your employee's behavior and attitudes is simply to keep your eyes open. Come home for unscheduled visits and see whether she's playing or reading with the children, rather than talking on the phone or watching TV. Phone home frequently to ask how things are going; that way, she'll be aware that you're paying attention. The English Nanny & Governess School even requires parents to agree that they'll have weekly meetings with the employee.
You can also go the electronic route, with miniature cameras hidden in radios, wall clocks, smoke detectors, mock ceiling sprinklers, and working stereo speakers. With a live feed, you can see what's happening at home via a phone link to your office computer. Infrared systems even let you record in the dark.
You're not obligated to tell the nanny or au pair that you're videotaping her, but you can't tape her absolutely anywhere in your home. "Privacy laws apply when you create an expectation of privacy," says investigator Michael Rothman, who's also an attorney. "In a workplace, she doesn't have an expectation of privacy. In her own room, she does."
The chief problem with taping someone secretly is its effect on your relationship. "I know one nanny who found out in a salary review that she'd been taped," says International Nanny Association president Kavanaugh, herself a nanny. "The family thought she was wonderful, but she was so shocked that she ended up quitting. Her trust had been violated."
What child care help will cost you
Au pairs are usually the cheapest live-in child care alternative. In exchange for up to 45 hours of work a week, host families provide them with a private room, board, a minimum payment of about $140 a week, and up to $500 for educational expenses over a year's time, as well as various other benefits that are generally similar to the terms of employment for a nanny. The State Department estimates that the annual cost to the host family is about $13,000, including placement fees to the au pair agency.
By contrast, live-in nannies generally earn $350 to $750 a week, according to Kavanaugh. Todd Maddalone of GTM Associates, a payroll service in Albany, NY, says his clients pay up to about $850 a week. On the high end, the English Nanny & Governess School recommends a range of $450 to $1,000. The Nanny Authority recommends $300 to $1,400.
A live-in nanny, like an au pair, needs her own bedroom and telephone and, ideally, her own bathroom. When she's on duty, she should be able to eat meals with you, attend family outings, and participate in family holidays. It's appropriate to give her modest birthday and holiday gifts as well.
Sick leave, holiday pay, and vacation time are common benefits. Of course, if a nanny or au pair goes on vacation with you and helps with the kids, that doesn't count as time off.
Another common benefit is medical insurance. No national association offers a group health policy for nannies, according to insurance agents Richard A. Eisenberg of Newton Centre, MA, and Paul Gravel of Edison, NJ. "The different state insurance laws work against that," says Gravel.
Eisenberg says that most nanny policies he writes are "temporary," which typically means they last six months, with no guarantee of renewal. "That's mostly for employers who are hiring a nanny who's 18 or 19 years of age, and they want to keep the benefit costs down until they're sure the nanny's going to work out," he says. The more expensive alternative is a permanent policy, in which renewal is guaranteed regardless of the insured's state of health. "For older nannies, we'd recommend permanent insurance from the start," says Eisenberg. Gravel agrees. "Otherwise, you get into pre-existing conditions when you renew," he says.
For individual policies, HMOs and PPOs are standard. Premiums vary, based on location as well as coverage. In Texas, a permanent PPO policy with a premium of $120 a month "covers doctors' visits with a copayment and major items with a $500 deductible," says Stephanie Breedlove, whose Austin-based payroll firm also provides insurance services. Elsewhere, monthly premiums range from $200 in states with relatively modest costs of living to as much as $300 on the Eastern seaboard's metropolitan corridor. Gravel puts the monthly cost for a permanent HMO policy at about $200 to $300 for the East Coast. "You can sometimes get an indemnity plan," he adds. The cost would be $400 to $500 per month, with a deductible typically in the $1,000 range.
Au pairs may get basic insurance through their placement agencies, but the agency isn't legally obligated to provide ityou are. Minimum coverage is $50,000 per illness or accident, with no more than a $500 deductible. (The requirements are spelled out on the State Department's Web site and in the October 9, 1999, Federal Register.)
What to expect of your employee
Live-in employees are exempt from the overtime requirements of the Fair Labor Standards Act, which otherwise requires overtime pay if an employee works more than 40 hours a week.
Freedom from the time clock doesn't mean, however, that a live-in employee is on call 24 hours a day. The law says an employee is off duty only when she is free of her job responsibilities. If the nanny or au pair is expected to get up if the baby cries, she's on duty.
When you hire, you should discuss work hours up front, and if you expect to ask the employee to work unscheduled long days sometimes, make sure she understands and agrees to do so. In any case, au pairs can't be asked to work more than 10 hours a day.
As for housework, most experts advise against asking a nanny or au pair to do cleaning other than what's directly involved with child care, such as putting away toys and clothes and washing the children's laundry. Otherwise, "you may unwittingly pressure your employee into ignoring your child," writes Cheryl Mendelson, author of the 1999 book Home Comforts, a compendium of advice on housekeeping that also addresses domestic help.
It's reasonable to ask a nanny or au pair supervising an older child to do light houseworkto wash dishes, make beds, tidy up, and dust. Just don't expect one to take a maid's role.
By Gregory A. Hood, MD
Mary Poppins has probably done more damage to in-home child care than anyone realizes. When parents hear a charming accent from a prospective au pair, they turn their brains off and offer a job right away. But remember, Mary Poppins stayed with the Banks family for only a few days.
It's true that many au pairs do a great job, but it's not true that they all come to this country because of their love for children. Some come for the glamour of America, and their interest quickly shifts away from the kids. Others come to escape a totalitarian state, rising crime in their homeland, a bad family situation, or personal torment.
We've had five au pairs since our oldest daughter was born, and we've learned that you can't entirely predict what an au pair knows about customs in the States. And in any case, these are young people themselves. Our words of advice:
Do give her a big greeting at the airport. She'll be nervous, and she'll want to know that her arrival is special to you. At home, give her a few days to get settled and recover from jet lag. And consider a modest welcoming present. We bought all our au pairs a dual-language dictionary.
Don't nitpick. Au pairs are very brave to come half-way around the world. Give yours some credit.
Do set limits and regulations, including a curfew on work nights. Although doing so from Day One may seem harsh, it's much better than trying to rein in an 18-year-old once she's staying out late. She should be able to have friends visit, provided she doesn't disrupt the household or violate your family's standards in the processfor instance, by having her boyfriend stay overnight.
Do set expectations for the upkeep of the au pair's and kids' rooms. Otherwise, you may find yourself throwing out sheets that haven't been washed in a year.
Do show her how to use the air conditioner and heating system. Our energy bill dropped almost by half after one au pair left. It turned out she was running the furnace with the windows open.
Don't assume that she knows how to work the appliances. Show her how, more than once. We had one au pair from Sweden who didn't know to change the vacuum-cleaner bag. We wound up throwing away the vacuum. Another dyed our oldest daughter's white clothing pink by washing a bright red outfit along with the rest of the laundry.
Do specify limits on your au pair's phone and computer use. Although e-mail is helpful for au pairswe had a couple who spent a small fortune on phone calls to their home countriesit's also possible that a naive young nanny will make a date with someone she met in an online chat room.
Don't allow her to make personal calls or have friends over when she's on duty.
Do meet regularly with her to talk about what she is and isn't happy about, as well as what you're happy and not happy about.
Do specify limits on TV use during the day, including cable channels and total time on. There are no Barney or Teletubbies broadcast into our housenor topless women, a common sight on European television.
Do help the au pair plan activities and outings for the kids, such as going to museums and parks. We've found it helpful to set up projects, such as creative endeavors for upcoming holidays or making birthday cards for family and events.
Don't presume that your au pair understands American customs. In some European countries, it's not uncommon to see a dozen or more children in strollers left unattended outside a store or cafe while the moms chat inside. A few years ago, a mother from Denmark was arrested in Manhattan for doing just that; she was charged with endangering the welfare of a child.
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Tax and insurance issues
Because domestic employees rarely qualify as independent contractors, its your responsibility, not theirs, to deduct taxes from their pay and comply with tax and labor laws. You also need to consider insurance issues.How to give Uncle Sam his share
The IRS doesnt have to be in a vigilante mood to find out that youre violating tax law. One payroll service, Breedlove and Associates of Austin, TX, reports that a nanny whod been paid under the table for two years filed for unemployment benefits after she was laid off. The family paid back taxes, penalties, and thousands of dollars in interest.
This year, youre responsible for employment taxes if you pay, or think youll pay, $1,200 or more in wages. You report the tax on Schedule H of your Form 1040. If you dont, or if you underreport, you could face a penalty later.
Soloists get a break: In the IRS eyes, if youre a sole proprietor, you are your business. You can pay the employment taxes quarterly through your practice. For more information, get IRS Publication 15, Circular E, Employers Tax Guide. (All the publications and forms are available on the IRS Web site at www.irs.gov .)
Domestic employers tax obligations are spelled out in IRS Publication 926, Household Employers Tax Guide. A brief summary:
Social Security and Medicare. Social Security tax totals 12.4 percent of cash wages; Medicare tax, 2.9 percent. You can pay them both, withhold them from the employees paycheck, or split the bill with the employee. However you handle it, youre responsible for making sure the government gets the money.
"Cash wages" include tips, paid vacation, sick days, and some states disability premiums, but not room, board, or clothing. Nor do they include work-related transit passes (up to $65 per month) or parking fees (up to $175 per month) that you pay for the employee.
Unemployment tax. You must pay unemployment taxfederal, state, or both; you cant deduct it from the employees paycheck. The federal tax is 6.2 percent of the first $7,000 of wages, but if you pay state unemployment tax, you may be able to get a credit that reduces the federal tax to 0.8 percent.
Federal income tax. Paying federal income tax is the employees responsibility; you dont have to withhold the money. You can also pay the employees federal income tax yourself, as part of the compensation package. If you do, though, you have to include the taxes in the employees cash wages for the purpose of figuring Medicare, Social Security, and federal unemployment tax.
Earned income credit. If you agree to withhold income tax but find none is owed, you must notify the employee about the Earned Income Credit (EIC). You should tell the employee anyway if you pay her less than $31,152, because she may be able to get some money back from the IRS. You may have to advance part of that money, but only if the employee gives you a Form W-5, Earned Income Credit Advance. IRS Publication 15 provides details.How payroll services can help
You can sidestep the paper chase by contracting with a payroll and/or tax service. Such services can be big timesavers; the IRS estimates that Schedule H alone can take almost three hours to complete. Minimum fees for payroll and taxes together vary from $528 to $730 a year.
National firms that specialize in domestic employees include GTM Associates of Albany, NY; Home/Work Solutions of Sterling, VA; and Breedlove and Associates of Austin, TX. A tax-only service, NannyTax, is based in New York City.
GTM (www.gtmassociates.com ), which specializes in payroll, charges a $75 one-time fee, plus $477 a year for quarterly tax forms and paychecks. Schedule H and W-2 forms cost $45 more. Theres no extra charge if you change employees.
Home/Work Solutions (www.4nannytaxes.com ), which specializes in taxes, charges a one-time fee of $100, plus $80 for adding or changing employees. With electronic transfers, weekly paychecks cost $35 a month. Tax service costs an additional $390 a year; the two together cost $730.
Breedlove and Associates (www.breedloveinc.com ) has the simplest fee structure: For taxes and electronic-transfer payroll together, theres a one-time fee of $75, plus $600 a year for weekly pay records. Employee turnover incurs no additional charge.What about insurance?
A standard HO-3 homeowners policy covers routine liability problems for nannies and other domestic employees. Besides theft and damage, it insures against minor medical mishaps, such as a cut that requires a trip to the emergency room.
Still, when you hire someone, says Jeanne Salvatore of the Insurance Information Institute in New York City, consult with your insurance agent. Your coverage might not be appropriate, particularly because insurance laws and regulations vary by state. Basic information, state insurance office phone numbers, and links are available on the institutes Web site at www.iii.org/individuals/other_stuff/household_help.html .
Upon hiring a nanny or au pair, you should at least consider the following insurance types:
Workers compensation. You should get this insurance even in states that dont require you to. "That way, if the nanny or au pair is injured, you cant be sued for the cost of medical care," says GTMs Todd Maddalone. You can buy a workers comp policy through your insurance agent. The cost is "in the hundreds per year," says Salvatore.
Auto insurance. If your employee will be driving your car, check to make sure your policy will cover her; if shell be driving her own car, make sure her coverage is as extensive as your own.
Umbrella policy. "Doctors are perceived as having deep pockets, whether they do or not," says Salvatore. "An umbrella policy costs about $200, and it typically increases your liability coverage by $1 million on both your house and car." Its a good idea for all doctors, but particularly for those who employ domestic help.
A Medical Economics Web Exclusive:
Before you hire
An employment checklist
File IRS form SS-4 to get an Employer Identification Number to use on tax forms.
Find out whether your state requires you to pay unemployment tax.
Talk to your insurance agent about coverage, including workers compensation insurance.When you hire
Verify the employees Social Security number by phoning the Social Security Administration at 800-772-6270.
Fill out an I-9 form, available on the Immigration and Naturalization Services Web site at www.ins.usdoj.gov/graphics/formsfee/forms/i-9.htm . The form lists documents that you can accept as proof that the employee is eligible to work in the United States. (You must verify, by signing a certification on the form, that the documents "appear to be genuine.") File the form in your records.
Have the employee fill out a Form W-4, Employees Withholding Allowance Certificate, if youve agreed to withhold federal income tax.
Submit documents for your states "new hire registration" program. These programs help the states track down ex-spouses whove been dodging child support payments. The payroll firm Home/Work Solutions provides useful state contact information and some Web links on its Web site at www.4nannytaxes.com/newhire.htm .Quarterly and yearly
Each quarter, pay three months worth of Medicare, Social Security, and income tax to the US Treasury, reporting them on a voucher from IRS Form 1040-ES.
By the end of January, fill out IRS Form W-2, Wage and Tax Statement, and give your employee copies B, C, and 2.
If the employee has applied for a Social Security number but hasnt gotten it when you file the W-2, write "applied for" where the Social Security number usually goes. Later, when you get the number, notify the IRS by filing Form W-2c.
By the end of February, fill out IRS Form W-3, Transmittal of Wage and Tax Statements, and send it, along with copy A of Form W-2, to the Social Security Administration. You get an extra month if you file electronically.
On tax-filing day, file Schedule H, Household Employment Taxes, along with your Form 1040.When employment ends
Either give the employee her final W-2 Form when she leaves or send it to her in January of the following year. If the employee requests the form immediately, you have 30 days to comply, starting from the date of the request or the last paycheck, whichever is later.
If you lay off or fire the employee for any reason other than misconduct, make sure she knows that she may be eligible for unemployment insurance payments.
Keep employment and tax records for at least four years after you pay or report the taxes (whichever is later).
Sue Preston. Child care: Hiring--and keeping--someone who'll do it right. Medical Economics 2000;23.