GTM Household Help BLOG

Common Questions Regarding W-2s

Tax season is in full-swing and we are answering many questions from our household clients regarding W-2s. As a result, we thought it be beneficial to focus this month’s blog on some of them. Hopefully, after reading our responses, we’ll be able to save you some time and help clarify any of your concerns.

Q: Does my employee receive a 1099 form?
A: No. Household employees are not independent contractors. They receive W-2 forms. View more information on this topic.

Q: What is the deadline for giving the W-2 to my employee?
A: The W-2 form needed to be postmarked by January 31 of this year.

Q: I paid my employee directly for the first 4 months of the year. Are those wages included on the W-2?
A: Yes. You should include all wages (on your own or with the assistance of GTM (or other payroll provider) on one W-2 and not more than one.

Q: My employee was paid a net amount. Why are the wages on the W-2 higher than what I paid her?
A: The W-2 form reports “Gross” wages paid to an employee, not net. Even if you negotiated and agreed upon paying a net wage, your employee’s Social Security, Medicare and possibly Federal and State income taxes are added on top of the net in order to calculate the “Gross” wages that are reported as his/her income.

Q: When do I have to file the W-2 and W-3 with the Social Security administration?
A: If you have a payroll provider, you should first check with them to make sure they are not doing this on your behalf. If you have to do it on your own, the deadline for submitting the forms electronically is 2/29/2012. The deadline for filing a paper copy is 4/2/2012.

Q: What do I do with the Schedule H form?
A. This form is included with your personal income tax return. You should provide a copy to your accountant or should include the information, if filing your own return.

Q: What is reported on a Schedule H form?
A. A Schedule H form reports total gross wages, your employee’s portion and your employer portion of social security and Medicare taxes, your federal unemployment tax, and contributions made to your state for unemployment insurance.

Q: My employee was on disability for a few months. Are those wages included in the W-2 form? 
A: Yes. The disability company should have provided a report of your employees’ income that was paid out to her. You should provide this report to your payroll provider to be included in your employee’s W-2 wages.

 

As always, please contact us anytime at householdpayroll@gtm.com or 888-432-7972 if you have additional questions or would like to learn more about GTM Payroll Services Inc.

 

NY Labor Law Changes Take Effect November 29th

Provisions Under New York’s Domestic Workers’ Bill Of Rights Take Effect November 29^th

Important update for New York Employers regarding changing Labor Laws,
from the nanny payroll tax experts at GTM Payroll Services

Earlier this year, the landmark signing into law of New York’s Domestic Workers’ Bill of Rights, amended the state’s labor law, executive law and workers' compensation law; as they relate to the employment of domestic workers. 

On November 29, six specific provisions under this new law will go into effect.  Of particular importance is the establishment of regulations impacting:

1. Pay Frequency
2. Overtime Compensation
3. Time off (Unpaid and Paid)
4. Insurance
5. Notification to Employees and Record Keeping
6. Protection from Unlawful Discrimination

GTM recommends that all NYS employers review these changes to the labor laws, and take the appropriate action necessary for compliance, by or on November 29, 2010.  Please click here for more detailed information on each of the above provisions and steps that need to be taken. 

GTM will continue to monitor this legislation to provide clients with ongoing support to aid with all of their household employment needs.  Our customer service team is available to answer any questions that clients may have regarding this law.  Simply call (800) 929-9213 or email customerservice@gtm.com.

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At GTM we aim to provide access to the most comprehensive services & solutions available with better advice, better service and better value...for an easier life!  With nearly 20 years of advocacy for the professionalism of the household employment industry, New York-based GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as "nannytax", labor compliance, human resources help, workers' compensation and health insurance needs.  Additionally, Guy Maddalone's How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.  

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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative.  Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.

Important Update for NYS Household Employers ~ NYS Domestic Workers' Bill of Rights Signed Into Law

On Tuesday, August 31 2010, NYS Governor Paterson signed the Domestic Workers Bill of Rights into law, which takes effect November 29, 2010.  The signing of the new law was to amend the labor law, the executive law and the workers' compensation law, in relation to establishing regulations regarding employment of domestic workers including hours of labor, wages and employment contracts.
 
The Domestic Workers Bill of Rights had many amendments, thus leaving out some proposed items passed by the Assembly as well as items that were passed separately by the Senate earlier this year. 

The final Domestic Workers Bill of Rights that was signed into law now establishes the following effective 11/29/10:

Labor Standards:

1. One day of rest every calendar week, waivable by the worker with pay for that day at the overtime rate of 1 and a 1/2 times their regular hourly rate. The day of rest will, whenever possible, coincide with the traditional day of religious worship.
2. After 1 year of work with the same employer, 3 days of rest per year at the regular rate of compensation.
3. It will be an unlawful discriminatory practice for any domestic employer to:

a)    engage in unwelcome sexual advances, requests for sexual favors or other verbal or physical conduct of a sexual nature to a domestic worker when:

i.    submission to such conduct is made a term or condition of the worker's employment;

ii.    submission to or rejection of such conduct by a worker is used as the basis for employment decisions; or

iii.    such conduct has the purpose or effect of unreasonably interfering with a worker's job performance by creating an intimidating, hostile or offensive working environment; or subject a domestic worker to harassment based on gender, race, religion or national origin, where such harassment has the effect of unreasonably interfering with work performance by creating a hostile working environment.

Wage and Hour

1. Consistent with the current law, Overtime pay after 40 hours of work per week for domestic workers who do not live with their employers.  And overtime pay after 44 hours of work per week for live-in domestic workers at a rate of 1 and a ½ times their regular hourly rate.  
2. Department of Labor is given wage and hour enforcement powers for domestic workers.

Insurance

a)    Disability Insurance to part time domestic workers. *  

*According to the ACTs summary provisions' Disability Insurance was listed as it would be required for Part time domestic workers.  However when GTM contacted the NYS Workers Compensation Board, who enforces disability and workers' compensation insurance requirements, they said the law had not actually changed and it is still a 40 hour minimum before domestic employers are required to have disability and workers compensation insurance.  We will continue to monitor this to see if that opinion changes.

GTM recommends that all NYS employers review these changes and make changes to their current employment agreements and handbooks by or on November 29, 2010.

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At GTM we aim to provide access to the most comprehensive services & solutions available with better advice, better service and better value...for an easier life!  With nearly 20 years of advocacy for the professionalism of the household employment industry, New York based, GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as "nannytax", labor compliance, human resources help, workers' compensation and health insurance needs.  Additionally, Guy Maddalone's How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.  

GTM will continue to monitor this landmark legislation to provide ongoing support to aid you with all of your household employment needs.

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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative.  Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.

New York State Senate Passed The Domestic Workers Bill Of Rights

FOR IMMEDIATE RELEASE GTM Poised To Aid Domestic Staffing Agencies & Household Employers   JUNE 3, 2010– (Albany, NY) – Earlier this week, the New York State Senate passed the Domestic Workers Bill of Rights (S2311D) making New York the first state in the nation to move forward with new standards of worker protections for more than 200,000 employees in New York’s household employment industry.   A long-time advocate for the advancement and professionalism of the household employment industry, GTM recently highlighted Senator Savino, the first Senate Sponsor of the legislation, who stated, “They (domestic workers) are our companions to the elderly, housekeepers, and nannies and provide crucial services to those who employ them.  They should be afforded the same rights, respect, and dignity as the rest of workforce in our State.”   Every year, thousands of new families enter the market and take advice from ill informed friends and colleagues who believe you don’t have to pay taxes on workers or abide by labor standards.  This belief and consequential actions are of detriment to those working in households, who are all left penalized by lack of work history and benefits.  As noted in the Senate debate, hundreds of thousands of New Yorkers are able to do their own jobs and keep their families functioning only because they rely on the labor of nannies and caregivers.   GTM Founder and CEO, Guy Maddalone said, “After years of the industry promoting best practices and still only seeing a small percentage of compliance, it appears New York has now decided to take more extreme measures.”  He further stated, “It will be interesting to see how these new measures will impact tax and labor compliance.”   With nearly 20 years of advocacy for the professionalism of the household employment industry, New York based, GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as “nannytax”, labor compliance, human resources help, workers’ compensation and health insurance needs.  Additionally, Guy Maddalone’s How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.    More information on this important legislation can be found on the New York State Senate website (www.nysenate.gov).  For more information on our tax, payroll, HR and insurance services, visit the household employment experts at GTM.com.

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GTM’s expertise in the household employment and business services arenas enable us to offer the information, services, tools and resources our clients need. For a FREE – No Obligation Consultation for your household or business, contact GTM at 800.929.9213today!  Or chat LIVE with one of GTM’s professional Tax & Payroll Specialists at www.GTM.com.

At GTM we aim to provide access to the most comprehensive employee benefit plans & solutions available with better advice, better service and better value...for an easier life!

Top 5 Reasons For Paying The “Nanny Tax”

 Top 5 Reasons For Paying The “Nanny Tax”

5. Establishing a legally compliant and professional arrangement with your household employee benefits both of you.

a.     Appropriate payments to household employees, including those to a person who cleans your house, might qualify for the child-care credit. That’s a dollar for dollar credit if you qualify.

b.     It helps your employee establish work history, credit, U.S. citizenship, and other benefits. A legal employee can take advantage of Social Security and Medicare benefits, and may be eligible for unemployment compensation and the Federal Earned Income Credit.

4. Not reporting payments to household employees could cost you big bucks in terms of penalties and interest should you get caught.
   
   
   1. Employers who do not pay legally risk the chance of an audit, which can be costly and very time-consuming. There is no standard penalty. Penalties are determined by the IRS based on its analysis and the severity of each case.

3. Not paying social security taxes, assisting with withholding, or meeting state requirements for workers’ compensation and health insurance (as applicable) isn't just cutting through administrative hassles, it's illegal!
   
   
   1. Every fiscal quarter of sitting, housecleaning, nanny-ing, personal assistant-ing, or under-the-table anything - doesn't count toward the employee’s Social Security benefits unless the Nanny Tax has been paid.   

2. Opening the door to other legal issues, avoidance of “paying on the books” could result not only in IRS penalties, but state issues should your employee or former employee ever file for disability benefits.
   
   
   1. The best route is to make payroll taxes a condition of employment.

1. If you ever run or are appointed to political office, you can unequivocally state with a clear conscience that you legally abide by, and are compliant with, the Nanny Tax....
   
   “Next Question Senator?”

  

For more information, consult IRS publication 926 (available online at www.GTM.com), or for a FREE – No Obligation Tax Consultation, contact GTM at 800.929.9213 today! Or chat LIVE with one of GTM’s Tax & Payroll Specialists at www.GTM.com.

Children Age: The Changing Role of Your Nanny

A client recently submitted a question about the changing duties that a nanny will perform as the children get older, and how to address them. A great question. Obviously, when you have a young child, an infant or a toddler, the nanny will need to concentrate their time and attention on the child, their physical needs and interacting with them.  But as children age and become more independent, the duties of the nanny need to change as well.  The child no longer needs constant watching and care, but they will also still have their moments when they will need to come first. One way to deal with this transition is to sit your nanny down and discuss the changing needs of the family and child.  If you need to shift the work to more household chores, you should discuss this with the nanny and see how amenable she is to the change.  There may be a few chores that she feels comfortable doing, and a few that she does not.  Discuss the issue together and come to a mutual agreement of what is acceptable.  Then you can sit down and write a new job description.  Talking things over and understanding what is acceptable to both parties can help you to retain that valued employee.  And always stress that the children are still the primary responsibility and that if the housework needs to be left for a day due to the children’s needs, so be it.  However, it is also important to remember that as the families need changes, perhaps the nanny may also need to be changed.  The person who is wonderful with an infant may not be the right person for a toddler.  The nanny who took such incredible care of your first child may not be the right fit for your second, or to look after two children at once.  There are times when a change in nanny is the best way to get the right help for your family. For more information on household HR, nanny taxes and hiring and retaining your household help, visit the Household Employment Experts at www.gtm.com.  And if you have a question, please feel free to leave a comment.

Human Resource Documents for the Housheold Employer

I was talking with a woman the other day who said that she was looking for advice on dealing with her maid.  Apparently she was dissatisfied with the level of service that she was receiving, and was looking for help on how to better the employer/employee relationship.  She had been looking through our web-site and decided to purchase our book for more information. This is a difficult situation to be in.  She liked her employee, but felt that she did not accomplish enough and was doing some unacceptable things while on the job.  The best way to avoid getting yourself into a similar situation is to be up front and communicate regularly with your employee, and an essential first step is a job description, a work agreement and an employee handbook.  These three pieces of HR material will lay the ground work for your employee, detailing for them exactly what their job is, what is not acceptable and what the consequences for ignoring these rules can be.  This is your house, your family and safety, and you have the right and the obligation to let this employee know up front what is acceptable and what is not.  Then, when a situation arises, you can bring out your copy of the handbook, which they have received and agreed to in writing, and you can refer to the area that covers the action involved.  Ideally, there will be no conflict simply because you took the time to spell things out ahead of time.  Along with this, you need to be sure to communicate with your employee on a regular basis, allowing them the opportunity to discuss any problem or issue that they might have.  In this way, if there is an area of the handbook that needs changing, updating, or that is unreasonable, your employee can express their opinions before a problem develops.  And you can address the issues that concern you before they get out of hand.  The longer a situation is allowed to go on unresolved, the harder it will eventually be to resolve.  For more information on household HR, and on how to go about creating these employee documents, visit the experts at www.gtm.com.

Positive work environments promote productivity

Negativity in the workplace can lead to less productivity, an unhappy environment and discipline/behavioral problems issues with your employees.  While these are important for every employer, it can be particularly important for the household employer, where the unhappy environment is your home and the discipline/behavioral issues could involve your family and their safety. As the employer, it is part of your job to maintain a positive work environment in which your employee can feel confident in their abilities and job security, and you can feel confident knowing that you are doing your best to ensure a quality atmosphere.  The five main reasons for negativity in the work place are:

1)      Excessive workload

2)      Concerns about management abilities

3)      Worry about job and retirement security

4)       Lack of challenge or outright boredom on the job

5)      Perceived lack of recognition, both in pay and other forms.

In order to combat negativity, you must face it head on, dealing with it immediately. Here are a few suggestions:

1)      Be Positive Yourself. Respond realistically to any issues that arise, but be sure to point out the positive in the situation. Save the criticism for the right time. How you look at things will dictate how your staff sees them.

2)      Don’t Put Off Dealing With The Issues. It is always better to face any issue immediately and follow-up as necessary, making adjustments as needed.

3)      Let Your Employees Know That You Appreciate Their Work! Acknowledging the successes both small and large will encourage a positive attitude.

4)      Point Out the Negative Attitude. Sometimes people do not realize that they are projecting negativity, and letting them know may help to solve the problem.

5)      Make A Change: If the negativity continues and is effecting your home and life, you may need to realize that this is not the right employee for you and your family. 

For more information on hiring and retaining quality household help, visit the experts at www.gtm.com.

Internet, Your Nanny, Your Child and You

There are a lot of wonderful things that we can access on the Internet for our children.  Many sites have valuable information, great games that encourage science and math, and beautiful pictures that will leave your children wanting to learn more.  There are groups that share their stories and ideas, and lots of sites that you and your nanny can go to for ideas on entertaining and educating the kids.  Many people though, myself included, worry about the content that our children can access far too easily. However, as with anything else, it is all in how you use and monitor Internet access.  Let your nanny know up front if your children are allowed to access any sites.  There may be some places that you find that your children enjoy that you will allow your nanny to access with them.  Also, your nanny may have found sites that they would like to share with the children.  As always, let her know that she can approach you with her ideas and that you will look at the site first for approval. Having an Internet policy established and in the employee handbook will let your nanny know ahead of time what your expectations are, and will give you peace of mind knowing that she is aware of your families rules.  For more information on employee handbooks, establishing policy and communicating with your household staff, contact the household employment experts at www.gtmassociates.com.  And if you have any ideas, comments or concerns you would like to share, please leave your comments with us.

It's Valentines Day Mom and Dad!

It’s Valentines Day.  While we often remember to do things for the kids on this day, what about Mom and Dad?  Taking time for yourselves as a couple is a very important way to relax, stay close, and show your children the importance and strength of your relationship.  For evenings like this, talk to your caregiver in advance to see if they are available.  But remember, this is a special day for them as well.  Be sure to have backup caregivers for those special occasions when Mom and Dad need time, and a date.  Enjoy yourself, and have a happy Valentines Day.  For more information on human resources and your nanny, or for any household help information, visit the household employment experts at www.gtmassociates.com.