It’s great to have an extra pair of helping hands when the new baby is born, but you shouldn’t put your new family at legal risk.
Lisa Pierson Weinberger, ESQ., celebrity lawyer turned rock star mom and founder of Mom, Esq., offers real reasons on why it’s important to hire a certified staff to ensure smooth sailing ahead!
Let’s get the scary reason out of the way first. Hiring an employee who is not eligible to work in the United States is illegal and failing to pay the appropriate employment taxes constitutes tax fraud. If you’re caught, you could be liable for payment of all back taxes (plus penalties and interest) and you could face federal charges of fraud and tax evasion and civil or criminal penalties including fines and potential imprisonment. Just because “everyone’s doing it” doesn’t mean that there is no exposure.
If you hire household staff that is eligible to work in the United States and pay that person properly, you may be able to save money by putting up to $5,000 of pre-tax dollars each year into a Dependent Care Account. This pre-tax account can then be used to pay your nanny, thereby saving you money!
If you hire legally and withhold taxes as the law requires, you actually end up paying out less each pay period. Let’s take an example: If you pay your nanny $15/hour and she works 40 hours each week, you owe $600/week. However, because you withhold from your employee’s paycheck, you are actually paying out less than that each pay period to your nanny. You are able to then save the withheld amount until your taxes come due, enabling you to potentially earn interest on the withheld amount.
If you hire an individual who is not eligible to work in the United States, that person will not receive access to unemployment and disability insurance, workers compensation, medicare or social security benefits.
If you know that you are breaking the law, you will not have peace of mind about the situation. Particularly when it comes to a nanny, you never want to worry that he or she will be afraid to call the police if there is an emergency with your child or hesitate before taking your child to the ER for fear of being found out.
Prior to founding Mom, Esq., Lisa Pierson Weinberger spent 7 years at the prestigious entertainment law firm of Greenberg Glusker working as an employment lawyer with many of Hollywood’s A-List celebrities. She counseled on matters related to large domestic staffs, advising on the hiring process, background checks, wage issues, counseling, discipline, terminations, and preparing employment applications, offer letters and a variety of agreements including employment, confidentiality, arbitration, severance and release agreements. Weinberger has a B.A. in Psychology, with honors, from Washington University and a J.D. from the UCLA School of Law.