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Both DH and I work FT, about the same hours. Since I started back in Sept 07 we tried a couple of daycare choices, hated them, and now my SIL minds DS while we work. We give her $100 a week <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/blush.gif" style="border:0px solid;" title="blush">, plus gas money and expenses for outings. She lives rent-free with the ILs so her expenses are minimal and she has been willing to do this because 1) she LOVES her nephew and 2) she is not ready to look for other work. She left a rather traumatic stint in the Navy to take care of MIL for 2 years while she (MIL) was gravely ill waiting for a transplant. She has social anxiety and is nannying for us on the cheap to ease back into 'regular' work. I wish we could pay her more, she is great with DS, but she has told us that it is her way of helping us save for a home.<br><br>
My question is really about her wages. It works out to less than $4/hr and we are trying to help her apply for a local program that basically covers preventative health care for working un-insured. She qualifies as far as I can tell, as far as income limits and minimum hrs/wk worked but I was wondering if we (her employers, DH and me) will get in trouble for paying her less than minimum wage. See, I am really quite uninformed about in-home domestic help and would love the advice of someone wiser in this area.<br><br>
Thanks, we really want to do right!
 

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Are you paying her as an employee or under the table? Because if you're not paying her SS and employment taxes, that could be one big problem. Remember all those nanny-gate scandals a few years ago? It's all about the taxes.
 

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<div>Originally Posted by <strong>miss_sonja</strong> <a href="/community/forum/post/10315171"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Are you paying her as an employee or under the table? Because if you're not paying her SS and employment taxes, that could be one big problem. Remember all those nanny-gate scandals a few years ago? It's all about the taxes.</div>
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It's also possible to have your SIL work on contract basis and she would be responsible for doing her own taxes. However, I'm guessing that if you're only paying her $4 p/h that it's all under the table anyway. I don't know if you'd get in trouble or not, but I'd be willing to bet that your local dept. of labor would be able to answer that question for you.
 

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You could get into trouble if you or she is audited and you've not been withholding and she's not been paying SS taxes and/or other applicable local taxes.<br><br>
I'm sure this will be unpopular, but yes, I feel if you can afford to pay more than that and you're happy with the care, you're taking advantage of her. You cite her social anxiety like it's a reason why you can get away with paying her so little because she couldn't get a job anyway. I'm not sure if that's how you meant it to come across.<br><br>
But I would think very carefully about this and at least consider paying her minimum wage. That's the ethical thing to do, IMNSHO. Her living arrangements are really none of your business if they're not with you, and shouldn't factor in to how much you pay her. Nor should her social anxiety.<br><br>
If you can stretch to pay minimum wage, I think that's really what you should be doing. If you wouldn't like the idea of someone paying an undocumented worker half of the minimum wage and under the table and telling them "you should be grateful, you can't get a better job anyway", then think very carefully about essentially doing the same to your SIL even if you're not being mean or your heart is in a good place. If you can't afford to pay her minimum wage for hours worked, then please consider paying her as close to that as possible.<br><br>
ETA:<br><br>
According to <a href="http://www.4nannytaxes.com/news/WageTest.cfm" target="_blank">http://www.4nannytaxes.com/news/WageTest.cfm</a> , if you're paying her $100/mo, that's just $1200 a year, so you don't actually meet the threshold where YOU need to be withholding and submitting taxes for her. So legally, I don't think you have to worry. But ethically (and you did ask about ethics, kind of), I think it's a different story.
 

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If you are paying her less than minimum wage and no taxes, then you are kinda taking advantage of her, imo. I could see paying someone with children to baby sit under the table as they are already staying home and potentially already have insurance (hopefully). But a relative in that situation needs some counseling to help her with her problems and some job training to get her out into society to earn her own way. I might do what you are doing part time while she does something else, like school or job training, but I would not do it full time.<br><br>
She is basically stuck right now. She cannot move out of her mom's place, she has no insurance, she has no way of getting out on her own. That is not helping her at all.<br><br>
And, yes, you should be paying taxes as well.
 

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<div style="text-align:left;">No . Family is there to help. Now if she wants out (don't just ASK her, watch, pay attention, ect) get your dc into a day care. And that's less than what parents at my daycare pay on a monthly basis (100 a week = 400 a month)<br><br>
What I suggest doing is helping her learn to 1) save money (if applicable. it's applicable and needed in my family!) 2) look for and choose another job. She may be using you as a crutch as much as you are using her.<br><br>
Good luck.<br></div>
 

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she doesn't have to pay rent. that is the biggest expense for most people. I think it would work out to minimum wage if you account for the fact that she isn't putting hundreds of dollars per month towards rent.<br><br>
If you *could* pay her more, than that would be nice for her.
 

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Also, cannot you declare childcare on your taxes? Well, you cannot declare it if you are not paying taxes for your childcare provider.<br><br><br><br>
I think..........
 

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I watch my nephew four days a week and it works out to be about $2.50/hour I "make" watching him. I'm not doing it for the money, I'm doing it because he's my nephew. I wouldn't watch just any child for that little money but for family I'll do it.<br>
I don't know anything about taxes or insurance in the States but I really think it's up to your SIL and you/your husband to decide if it's fair or not.
 

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Discussion Starter #10
As far as taxes, I have asked my employer (because we get dependent care taken out pre-tax) and they assured me that she is responsible for filing a tax return as a 'contractor' as I think Rigama mentioned. But as someone else pointed out, she may not make enough to be required to file. Although, Tigerchild, we are paying $100/week, even I agree that $100/month is not adequate in this situation even for family help.<br><br>
As for paying her more, we would like to, but simply cannot right now. If our expenses went up any more it wouldn't make sense for me to work because we would just be breaking even AND I would be away from DS<br><br>
(who just woke up.... more later)
 

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<div>Originally Posted by <strong>majazama</strong> <a href="/community/forum/post/10315506"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">she doesn't have to pay rent. that is the biggest expense for most people. I think it would work out to minimum wage if you account for the fact that she isn't putting hundreds of dollars per month towards rent.<br></div>
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But the OP isn't providing rent. Therefore, that's irrelevant.
 

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<div>Originally Posted by <strong>jenmary</strong> <a href="/community/forum/post/10315591"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">As far as taxes, I have asked my employer (because we get dependent care taken out pre-tax) and they assured me that she is responsible for filing a tax return as a 'contractor' as I think Rigama mentioned. But as someone else pointed out, she may not make enough to be required to file.<br></div>
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Nanny's are not independent contractors. They are considered household employees and you should be paying taxes on them.<br><br><br><a href="http://www.irs.gov/faqs/faq12-6.html" target="_blank">http://www.irs.gov/faqs/faq12-6.html</a>
 

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Discussion Starter #13
Maybe I should add that this is an arrangement that is likely to change in the coming months. My mom is moving into our town in March, and wants to share child-minding duties. I am pregnant and will be taking at least 12 weeks off starting in September, after that DS will be older and hopefully more happy to be in a preschool setting.<br><br>
Before SIL starting minding him FT, we tried out a Montessori 3d/wk program, and SIL offered to mind him FT instead because it was not a happy situation.<br><br>
And as far as helping SIL get help, that is what the preventative health care program is supposed to offer. We are all (DH, me, SIL, I think) preparing our tax returns soon, and just want to do the right thing but are naive about tax rules for home child care.
 

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We only pay our daycare provider $2.50 per hour, per child, and that's her asking rate. Obviously, with the other children she watches, she is making minimum wage, but there's no way I could work if I had to pay someone minimum wage to watch one of my kids.
 

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<div>Originally Posted by <strong>Tigerchild</strong> <a href="/community/forum/post/10315370"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">You could get into trouble if you or she is audited and you've not been withholding and she's not been paying SS taxes and/or other applicable local taxes.<br><br>
I'm sure this will be unpopular, but yes, I feel <b>if you can afford to pay more</b> than that and you're happy with the care, you're taking advantage of her. You cite her social anxiety like it's a reason why you can get away with paying her so little because she couldn't get a job anyway. I'm not sure if that's how you meant it to come across.</div>
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If we could afford to, we would love to pay her more. To pay her minimum wage (what is it now anyway? About $7-8/hr?), my husband or I would have to earn a lot more money than we do. And we are not paying her $100/week because she has SAD, I added that to explain why she might be willing to do what she is doing rather than seek real work in the big outside world.<br><br><div style="margin:20px;margin-top:5px;">
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<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">ETA:<br><br>
According to <a href="http://www.4nannytaxes.com/news/WageTest.cfm" target="_blank">http://www.4nannytaxes.com/news/WageTest.cfm</a> , if you're paying her $100/mo, that's just $1200 a year, so you don't actually meet the threshold where YOU need to be withholding and submitting taxes for her. So legally, I don't think you have to worry. But ethically (and you did ask about ethics, kind of), I think it's a different story.</td>
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I can see why you think I am taking advantage of her. I would not think of paying only $100/month for FT childcare in this country, even within my loving helpful family.
 

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<div>Originally Posted by <strong>A&A</strong> <a href="/community/forum/post/10315606"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">But the OP isn't providing rent. Therefore, that's irrelevant.</div>
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no. It means that her SIL probably has a lot more spending money than someone on minimum wage.
 

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Discussion Starter #18
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<div>Originally Posted by <strong>mamajessica</strong> <a href="/community/forum/post/10315823"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">They are considered Nanny's only if they are working under your roof.</div>
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Huh, now that is interesting. Like if she offers at-home childcare out of her home (DH's parents) then her wages are per child per week, not hourly like if she came here?<br><br>
Thing is, she does both - minds him here, takes him to the ILs when someone there is home to play with. It is really a very casual arrangement, I just want to get her healthcare without getting her or us in trouble.
 

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In my area $100-$150 is pretty standard for an in home care provider?<br><br>
My mom had my brother in an in-home care setting (not a center) and she paid her provider $30 a week for 2 hrs of care a day, works out to $3 an hour. Of course this was 8 years ago.<br><br>
My cousin does in home care and says for full time (8.5-9 hrs a day) she charges $150 a week, that works out to just over $3 an hr. I'm not sure how this works out for taxes and what not though.
 

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Discussion Starter #20
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<div>Originally Posted by <strong>A&A</strong> <a href="/community/forum/post/10315606"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">But the OP isn't providing rent. Therefore, that's irrelevant.</div>
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Well, I cannot take credit for it, but we are blessed with ILs (DH's parents) who live close and are very helpful. I think they would consider letting SIL live rent-free in the same way that SIL considers it acceptable to work for less than she could earn elsewhere. That is, family helping family.
 
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