5 Things You Should Be Thinking About If You Hire a Nanny in Maryland
Congratulations! Hope you’re ready to embrace your inner “Angela” because look “Who’s The Boss” now! It often makes financial and practical sense to hire a nanny rather than send your littles to daycare. But are you ready for the responsibility of being a boss? Here are five things you should consider when you hire a nanny in Maryland:
Pay/Overtime Laws: For small employers (fewer than 15 employees) in Maryland for 2022, the minimum wage is $12.20 per hour, or $13.50 in Montgomery County. Overtime must be paid for any hours over 40 in one work week at 1.5 times the usual hourly rate. Overtime is a moving target, so you need to check in annually to make sure you’re in compliance. Oh, also, you must provide an itemized pay stub with each check.
Taxes: Should you pay under the table? That’s a big no. It’s tempting, but you are opening yourself up to major liability by trying to fly under the radar. Not only should you withhold income taxes for your employee, you also have tax obligations as an employer. For 2022, the FICA tax rate for employers is 7.65% — 6.2% for Social Security and 1.45% for Medicare.
Workman’s Compensation Insurance: Maryland law requires every employer with one or more employee to carry workman’s comp insurance. This policy provides medical coverage and/or lost wages for workplace injuries and illnesses. Failure to carry a policy makes you susceptible to a fine of up to $10,000 in addition to being on the hook for those expenses. Before you ask, no, your homeowners’ policy does not cover this and an umbrella policy will only kick in if you have the underlying workman’s comp policy in place. Make sure you’re covered!
Set Clear Expectations: In Maryland you must give your employee, at the time of hiring, notice of the rate of pay, regular paydays and leave benefits. In Montgomery County, you must have a written contract and give an opportunity to negotiate. Regardless of which county you are in, it’s always a good idea to have a written contract. This contract should go beyond the basics to clearly set out your expectations and set your relationship up for success. The more specific you can be about your needs and expectations, the more likely they will be met.
Open Lines of Communication: Open lines of communication are essential. This should take several forms. Here are my suggestions as a starting place: daily communications via text message, a shared calendar (i.e. google), quarterly face-to-face check-ins where both employer and employee have a chance to weigh in, and an annual face-to-face review when the contract will be reviewed/revised, including a raise if appropriate.
If all of this sounds like so much work that you need to hire an employee to manage your employee, don’t fret! Outsource. There are lots of great and easy-to-use payroll providers that you can find online to manage regular pay and taxes. If you have questions about your contract, I’m here for you! Schedule a free quick chat to discuss how I can help.
