April is the peak time of the year for people to talk about taxes and money—whether it’s tax returns, tax refunds, or tax compliance. And if you’re a family with a nanny, housekeeper, senior caregiver, or other household employee, April is a great time to think about how you can stay compliant with the law while also providing a positive working experience for your employee(s).
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Revisit the “tax talk.”
If your employee earns $1,900 or more working for you this year, remind them you’ll be withholding Social Security and Medicare (FICA) taxes from their pay. If you previously withheld federal and state income taxes as well, remind them those will continue to be deducted and that they can adjust their withholdings by giving you an updated W-4 or IT-2104. This is for their benefit because paying taxes builds credit towards retirement and gives them access to unemployment benefits if they are laid off.
Go over the New York wage notice with your employees.
New York employers are required to give their employees a wage notice, not only at the time of hire, but also by February 1 of each year. The notice includes, among other things, your basic information, the employee’s rate of pay (hourly and overtime), and pay frequency. Use the wage notice as an opportunity to discuss a potential raise or just to make sure both you and your employee are on the same page.
Purchase or renew your workers’ compensation and disability insurance policies.
Household employers in New York are required to carry both a workers’ compensation and a disability insurance policy if their employee works 40 or more hours per week or is a live-in employee. These policies assist your employee with medical expenses and lost wages. Workers’ comp kicks in if your employee has a work-related injury or illness, while disability insurance covers the employee for non-work-related reasons (maternity leave, accident, illness, etc.). The simplest option for obtaining coverage is usually to contact the state, as they can set up both policies for you.
The tax and law discussion may not be high on your favorites list, but it will ultimately make life easier for you and for your employee.
Breedlove, vice president of Care.com HomePay, an online service that helps families streamline the process of paying their caregivers, is an expert on federal and state household-employment labor law and taxes.