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How to Talk to Your Employer About Being Paid Legally

Following the COVID-19 pandemic, the importance of legal pay for nannies has never been clearer.

We understand you may encounter a family that wants to pay you “under the table.” There are several reasons a family would consider this. They may not recognize what their legal obligations are, or they might feel they would save money by not paying legally. They may not be aware of the tax savings they would be eligible for, or they might just not understand the benefits of legal pay for nannies.

Schedule time with your family to share that being a nanny is your chosen career and if they do not pay you legally, you’ll be denied benefits and protections that employees in other professions receive.

Here are some reasons to help you explain to a family how you benefit when they pay you legally:

  • You are eligible for unemployment benefits and paid sick and family leave benefits.
  • Not paying legally denies funds to your Social Security account and impedes your ability to obtain credit and loans and show a verifiable income.
  • If the family chooses to offer benefits like health insurance and retirement plans, you are only
    eligible if you are being paid legally.
  • If you get hurt on the job, workers’ compensation insurance – which can only be obtained if you’re being paid legally – protects you and your family, helps pay medical bills, and replaces lost wages.

You can also share how paying legally benefits the family and what the risks are if they don’t:

  • Your family can take advantage of tax credits, including recent ones from pandemic-related legislation.
  • Families can claim a portion of your wages for the Child and Dependent Care tax credit, along with their employer’s flexible-spending plan (commonly called an FSA) and deduct your salary as a qualifying expense.
  • Employers must report wages and the taxes they withheld for you on their personal income tax return. The IRS may investigate, fine, or penalize families that don’t follow the law.

When approaching a family about why they should pay on the books, you can use GTM as a resource and alleviate your responsibility. Feel free to share the Benefits of Domestic Employment Law Compliance so your family understands how they benefit from paying legally, as well as our Benefits of Being Paid Legally so they realize the benefits you receive.

Since 1991, GTM Payroll Services has been working with nanny agencies and their families to give them the best value when it comes to payroll and taxes. Our process improvements and efficiencies have kept costs down, and we are committed to keeping our clients ecstatic. In addition, GTM is the only household payroll provider that offers in-house workers’ compensation. This saves families time and effort in securing coverage and handling audits and claims.

If you’re a nanny that knows a family that could use GTM’s nanny tax and payroll service, send them our way. If they sign up with us, you’ll get a $75 Amazon gift card! Just fill out this form. Visit us at GTM.com/household, or call (800) 929-9213 to learn more about our nanny payroll and tax services.


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