Are There Any Special Laws I Must Follow Regarding How to Pay a Nanny?

Yes. The law sometimes treats nannies or other household employees differently than other conventional employees. This can make it difficult for an employer to know how to pay a nanny. First, you are aware that a nanny is almost always considered an employee and not a contractor under IRS regulations. You must begin withholding and paying taxes on your nanny’s earnings if she makes more than $1,000 in any quarter, or $8,000 in the year 2012.

Federal and State minimum wage laws apply to nannies.

Overtime provisions of 1.5 times regular salary for nannies that work more than 40 hours per week are required under federal and some states laws for all live-out nannies. These federal overtime provisions do not apply to live-in nannies. The federal resource for overtime information is the Department of Labor. More information can be found here. You must also check the laws of the state you reside in. Most states follow the federal provisions but there are exceptions. For example, in California, overtime provisions kick in when an employee works more than 8 hours a day for live-out nannies. And in California, live-in nannies are covered under overtime provisions.

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