As the ranks of working mothers-particularly those with young children-continue to swell, many of them agree that one of the prerequisites to their success is not an MBA or an undergraduate degree from a prestigious school, but rather a reliable, efficient nanny or housekeeper. Knowing that there is someone at home whom they can count on to take good care of their youngsters, and sometimes of their home as well, allows them to concentrate on business while they are in the office.
Yet few working relationships are as fraught with uncertainty as that between a working mother and her housekeeper. A housekeeper`s duties are not always clear, and arrangements for such things as sick days and vacations tend to be made on an ad hoc basis, rather than being spelled out in advance.
Often, there is a difference of opinion between employer and employee about whether pay is to be off the books in cash, or legal, with the appropriate taxes withheld. Following are some commonly asked questions and their answers.
Q-I`m planning to sponsor my housekeeper for a green card. Will the new immigration law have any impact?
A-Not really, according to Allen E. Kaye, a New York City immigration lawyer and past president of the American Immigration Lawyers Association. While the law calls for the imposition of possible criminal and civil penalties on anyone who hires immigrants who are not authorized to work in the United States, the legislative history of the statute makes it clear that the regulations are aimed at large employers.
”I seriously doubt the immigration service is ever going to do anything about the employer of a single domestic,” Kaye said.
Q-My housekeeper, who already has her green card, wants to be paid in cash so she does not have to pay income tax on her salary. If I go along with her request am I breaking the law?
A-Yes, you almost certainly are. First, Social Security tax is due if a worker`s earnings exceed $50 in a calendar quarter. This low earnings ceiling, which has not been increased in decades, would probably apply to someone who comes in to clean just once a week, to say nothing of full-time domestic help. The contribution rate for 1987 is 14.3 percent on the worker`s first $43,800 of wages, to be shared equally by employer and employee. If you fail to make the required payments and are caught, you face both penalties and interest. Many household workers object to having Social Security withheld, but they should realize that they may need it in the future.
Q-Are there any other payroll taxes for which I am liable?
A-Yes, federal and state unemployment taxes. Federal unemployment is due when a worker earns more than $1,000 in a calendar quarter. The 1987 tax rate is a maximum of 6.2 percent of the first $7,000 in wages, reduced by a credit for state unemployment insurance paid.
Furthermore, domestic workers employed for at least 40 hours a week must be covered by worker`s compensation, which must be paid by the employer and which can cost $200 to $250 a year.
Q-Isn`t there some financial benefit to paying on the books, such as being able to claim the child care credit for income tax purposes?
A-In theory, yes, but in practice often no. The child care credit, which decreases as family income increases, is often less than the combined payroll taxes the family must pay on behalf of the housekeeper. For families with an adjusted gross income of more than $28,000, the child care credit can be as much as $480 for one child and $960 for two or more.
But the real problem is the increased paperwork that results from paying someone on the books. ”The trouble is that the government doesn`t distinguish between IBM and Mrs. John Doe as employers,” complained a social worker and mother of three who asked not to be identified because she now pays her helper in cash.
She stopped paying by the book, she said, when New York State imposed a $500 penalty on her, claiming that she and her husband had not filed the necessary forms for their housekeeper`s unemployement insurance. The housekeeper had quit a year and a half earlier. The matter was resolved when the couple, who had been unaware of the requirement to continue to file forms for someone they no longer employed, completed the necessary paperwork. ”It was an administrative nightmare,” the woman said.
Q-What is the current salary scale for live-in housekeepers?
A-It can range from a low of $100 or $125 a week for new employees to as much as $350 a week for long-term workers, according to an informal survey of working mothers in Manhattan. What constitutes a normal work week is open to negotiation, depending on a family`s needs and it can range anywhere from 40 to 60 hours a week.
If you are sponsoring someone for a green card, and have begun the process of requesting certification from the United States Labor Department, you must pay the prevailing wage rate for the job. As of Oct. 15, the Labor Department has set the prevailing wage in the New York area for live-in household workers at $5.47 an hour for a 44-hour week, or about $241 a week. The prevailing wage for what the Labor Department calls a ”child monitor” is $5.56 an hour, or about $245 a week.
Bear in mind that with household help, as with any other type of employee, you generally get what you pay for.
”People who have trouble with their household help tend to be cheap,”
said Ann Reese, mother of two preschoolers, assistant treasurer of the ITT Corp. and co-chairwoman of the Working Mothers Committee of the Financial Women`s Association of New York. ”Time and time again, you hear the same thing. They pay someone $150 a week and expect the person to watch two children, clean the house, have dinner waiting and the kids bathed and fed when they get home in the evening and to work one night on the weekend. Then they wonder why people don`t stay.”
Q-What about raises?
A-Again, there is no norm. But discussions with working mothers indicated that if you are satisfied with your helper, some sort of annual increase in line with the inflation rate would seem to be in order. ”When I get a raise, she gets a raise,” said Mrs. Reese of her nanny.
Also, it is appropriate to increase the salary if there are added duties, like the arrival of a new baby or even a new puppy.
Q-How should I handle sick days?
A-There is no standard policy, but if you are pleased with your housekeeper or nanny and she works for you full time, you will probably want to pay her for sick days, within reason.
Determining just what is reasonable can be tricky, however, and the answer often depends upon how long the person has been with you. If she has worked for you for at least a year, you might want to give her five or six paid sick days annually, not to be carried over to the following year. But if she has been with you a few months or less, the answer is less clear cut.
One lawyer and mother of four told of a new live-out housekeeper who was ill for three days during her second week of work, and had to take another day off to care for her own sick child the following week. Employer and employee compromised on half-pay for any sick days.
But the lawyer changed the arrangement after a year, because the housekeeper was absent on the average of once every two weeks or so. Now, the housekeeper is entitled to five paid sick days a year but nothing after that. ”I pointed out that I had to pay someone else to help out when she wasn`t there,” said the lawyer, adding that since the new arrangement went into effect the housekeeper has not called in sick.
Q-What happens if a nanny or housekeeper is ill or absent for an extended period?
A-This occurs more frequently than you might suppose, sometimes when the housekeeper becomes a mother herself. Typically, a housekeeper is not paid for maternity leave, but many try to find a friend or relative to fill in until they are able to return to work.
Such informal networking often occurs for shorter-term disabilities as well. One suburban au pair, sidelined with a two-week bout of pneumonia, said that her friends who were working nearby as au pairs helped out by inviting the children she cared for to their homes for play.
But sometimes an extended absence becomes the last straw and is used as a reason to dismiss a worker with whom the employer is already dissatisfied. Severance pay is a matter of negotiation.
Q-My cleaning person comes once a week. How should I handle sick days, holidays and vacations?
A-Most people generally do not pay a once-a-week cleaning person if he or she calls in sick.
If the regular workday occurs on a holiday, like Christmas, many employers will pay for that day, even though the person is not expected to work, or will try to reschedule work for another day. A Christmas bonus of an extra day`s pay, and a day or two of paid annual vacation are considered normal benefits by many employers.
Q-I am dissatisfied with my household worker and would like to dismiss the person. How much notice should I give?
A-Two weeks` notice is ideal, but when a relationship disintegrates badly the dismissal may take place on the spot. –
