Employment Agreements

From our friends at Breedlove & Associates . . . .

EMPLOYMENT AGREEMENTS

Hiring a nanny can be both exciting and nerve-wracking, especially for ultra-busy, sleep-deprived families. Often, the obsession with finding the perfect caregiver causes families to overlook important employment details.

In this issue of The Legal Review, we put the spotlight on employment agreements and the vital role they play in creating a successful employment relationship.

The Mistake A Virginia family began searching for a nanny to care for their new bundle of joy. After an emotionally-draining 6-week quest to find the ideal nanny, they hastily agreed -- verbally -- on a work schedule and hourly rate. The nanny started work the next day without any kind of written agreement in place.

The Law In some jurisdictions, a basic employment agreement is legally required. Whether required or not, we highly recommend that families use a placement agency or an attorney who can facilitate a comprehensive contract between family and nanny. The discipline of drafting detailed job responsibilities, house rules, emergency procedures, work schedule, vacation/sick time procedures, compensation, pay frequency, communication/review procedures, etc. radically reduces problems and misunderstandings. It also tends to lengthen relationships because it makes the employee feel like a valued professional. Finally, it can be an important and cost-effective means of arbitrating any family/nanny issues.

The Mess Within a few weeks, the honeymoon was over: The family had trouble hiding frustration with the nanny's housekeeping habits. She was tidying up the baby's room and kitchen as well as cleaning toys and baby clothes. But the family had expectations of the nanny doing the family's laundry and light housekeeping. The nanny resented not getting paid for Labor Day. She needed the money and had assumed that she'd get paid for major holidays. When the nanny got her first pay check, she was confused by the tax withholdings. She thought the agreed-upon amount would be her "take-home" pay.

The Outcome The family talked to friends and did some online research into the typical duties of nannies. They quickly realized that nanny job descriptions vary wildly and that they had done a poor job of articulating their desires at the beginning of the search process. Similarly, although the family had done some research on household employer tax and legal obligations, they had not discussed the compensation and benefits offer at the appropriate level of detail for their nanny. Despite the rocky start, the family really liked the way the nanny took care of the baby so they made a considerable effort to keep her. They created an employment agreement and sat down with her to discuss all the "relationship details" they should have discussed a month earlier. Unfortunately, the nanny took another job shortly after their meeting. She did not feel valued or respected and opted for a fresh start with another couple. The family hired their next nanny through one of our agency partners. The agency used a thorough job description process to focus the search on nannies who met the family's expectations. After a comprehensive vetting process, the agency held the family's hand through an employment agreement that left no room for misinterpretation or confusion. It's been almost 18 months and the relationship is going strong.

How the Whole Thing Could Have Been Avoided When searching for household help, busy families are tempted to take short cuts. Aside from being pressed for time, it can feel somewhat awkward to have a formal contractual agreement with someone with whom there is such a personal relationship. However, in our experience, the formal work agreement is the single-best predictor of the long-term success of the relationship. Without one, the relationship almost always seems to be rife with misunderstandings and resentment. With one, the relationship enjoys clear direction and increased professionalism. We encourage families to retain a reputable placement agency that can guide them on employment agreements and other important aspects of due diligence involved with household employment. It dramatically enhances the odds of an endearing and enduring employment relationship.

If you have additional questions about this or any other aspect of household employment tax and labor law, please call 888-BREEDLOVE (888-273-3356) or visit us online. We're here to help. Sincerely, Tom Breedlove Breedlove & Associates, LLC