By Bob King
As part of Legally Nanny’s continuing Legal Alert series, I wanted to let you know about H.R. 5804, the Taxpayer Responsibility, Accountability and Consistency Act of 2008. This bill, recently introduced in the U.S. House of Representatives, could directly affect your agency’s clients.
H.R. 5804 would significantly increase penalties for employers who misclassify workers as independent contractors instead of correctly classifying them as employees. Additionally, the bill places the burden of proof on the taxpayer to demonstrate that the worker was properly classified. Finally, in addition to increasing the penalties for failing to properly pay employees and provide correct payroll information such as W-2 forms, the legislation also imposes increased penalties for intentionally disregarding the worker’s proper classification.
This bill is directly relevant to your agency’s clients. Under both federal and state law, nannies and other household staff are employees; they are not independent contractors. Yet some clients insist on mischaracterizing nannies and other domestic workers as independent contractors — or simply avoiding the subject altogether — in an effort to avoid paying household employment taxes.
H.R. 5804 heightens the danger to clients mischaracterizing such workers. At Legally Nanny we’ve assisted scores of clients in hiring, employing, and paying nannies, elder care providers, and other household employees legally. We complete all the initial forms and show clients how to pay their employees and their taxes legally, maximize their tax deductions, and spend more time with their families.
Unlike other companies that charge clients ongoing fees for services we can show clients how to do themselves, we charge one flat fee for our service. Additionally, our comprehensive package includes our copyrighted Legally Nanny Hiring & Employment Guide and an employment agreement specifically tailored to each client’s unique household employment situation. Equally important, our one flat fee entitles clients to a full year of our responsive, knowledgeable service, and if the household employee leaves within one year of the client retaining our service, we will re-do all the employee paperwork again for free.
We are the leading law firm representing household employers and domestic employment agencies. As always, if we can assist your agency or your clients with any legal or tax issues, please feel free to contact us.
For more information on legal issues surrounding nannies and other household employment workers, please visit http://www.legallynanny.com.
Bob King has practiced labor & employment law in Orange County, California. He represents household employers, domestic employment agencies, businesses and individuals in a wide variety of legal matters, including defending against claims and litigation from employees and charges and investigations from government agencies.
Bob advises clients on hiring, evaluation, accommodation and termination matters; wage and hour issues; workplace policies, handbooks, agreements and contracts; and resolving client and business disputes. Bob also serves as the General Counsel for the Association of Premier Nanny Agencies, on the Board of Directors for the International Nanny Association, and has served as an expert witness in household employment litigation.