Paychex Payroll Services: Sign up Today!

Thinking About Hiring an Employee?

For many family child care providers, the thought of hiring an employee can be frightening or overwhelming. I know it was for me! Being an employer comes with a lot responsibilities; especially if you do it legally. The process of actually hiring your assistant can be confusing. This, along with the ongoing paperwork and supervising duties make a lot of providers wonder if it's really worth it to hire an employee.

Unfortunately, some providers decide to go ahead and hire someone, but do it 'under the table', without following the required policies and procedures, including wage and labor laws. They think this will save them time, money, paperwork and hassle. In reality though, hiring an employee 'under the table' can cost a provider way more than doing it the legal way. Hopefully, this information will help you to see the benefits of hiring legally, and also help you through the process.

When hiring an assistant, remember to ask for, and check references and verify professional and educational credentials. I would also recommend observing how a potential employee interacts with the children in your program and that you have a probation period. You should have a written job description and policies. It is as important for you to be as clear with your employee about what your expectations are as it is with your parents.

There are two areas that you need to make sure you are legally compliant in; they are wage and labor laws, and your state's licensing regulations. First, I will go over some of the issues that relate to everyone, but, because a lot of these issues differ state to state, you will need to be sure to look up the requirements for your particular state. I will try to provide the resources here for you to do that. To be sure that you are complying with your state regulations, check with your local licensing or registration office.

Clicking on the links below will take you directly to a specific topic.

Equal Employment Opportunity Law
The Fair Labor Standards Act
Minimum Wage
The Family and Medical Leave Act
State Labor Offices
About Payroll Services
Apply for an Employer ID Number
Employee Forms - W-9, W-4 and I-9
Worker's Compensation
A Word About 1099's

There are a number of federal laws that employers must follow when hiring employees. Equal employment opportunity (EEO) laws prohibit discrimination on the basis of race, color, religion, sex, age, national origin, or status as an individual with a disability or protected veteran.

The Fair Labor Standards Act (FLSA) covers federal minimum wage provisions. The federal minimum wage is currently $7.25 per hour. However, Many states (and some municipalities) also have minimum wage laws. Some state laws provide greater employee protections; employers must comply with both.

Click here for Minimum Wage Laws by states as of January 1, 2011

Federal Minimum Wage Poster

Federal Minimum Wage Poster (Spainsh)
Also from The Fair Labor Standards Act (FLSA): Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days.

The US Department of Labor provides FLSA fact sheets for many industries. Here is the one for child care programs. Please note that it states that if you are a family child care program and you hire an assistant, you are covered under this category.Daycare Centers and Preschools Under the Fair Labor Standards Act

The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

Twelve workweeks of leave in a 12-month period for:

* the birth of a child and to care for the newborn child within one year of birth;

* the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;

*to care for the employee’s spouse, child, or parent who has a serious health condition;

*a serious health condition that makes the employee unable to perform the essential functions of his or her job;

*any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or

* Twenty-six workweeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness who is the spouse, son, daughter, parent, or next of kin to the employee (military caregiver leave.

To find out state labor laws in your state, click here for a list of State Labor Offices.

You may choose to do your own payroll using accounting software, or hire a payroll service.

If you already have a relationship with an accountant, he or she may also do payroll, just ask. The cost of a payroll service can vary as does what they offer. I highly recommend using a payroll service such as Paychex because they, not only are very helpful in getting you set up, but they also electronically submit your payroll taxes, complete your quarterly reports, complete and file W-2s at the end of the year and can also provide you with other services such as Worker's Compensation Insurance.

Some of the steps and/or forms you will need to complete during the hiring process are: * Apply for an Employer ID Number (EIN): I truly hope that you already have one of these (you don't need to be an employer to get one.) Click here for more information). To apply for an EIN, Go to the IRS website. It takes just a couple of minutes.

* Have your employee fill out the following forms:

Form W-9 - Request for Taxpayer Identification Number and Certification

Form W-4 - Employee's Withholding Allowance Certificate

Form I-9 - Employment Eligibility Verification

* Purchase Worker's Compensation - Most employers are required by law to have workers' compensation insurance, even if they have only one employee (This may vary by state, so make sure you look up your state's laws). If your employees get hurt or sick because of work, you are required to pay for workers' compensation benefits. Workers' comp insurance provides six basic benefits: medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits or vocational rehabilitation and death benefits.

File 941 quarterly - Some payroll services will do this for you.

A word about 1099 Misc. and hiring an assistant:

An assistant is an employee, not a contractor, and therefore cannot be paid on 1099 Misc. Click here for more information.

Substitutes - A substitute can be paid on a 1099 ONLY IF the person is a true independent contractor who advertises to the public, gives you a tax id number, provides services to multiple child care providers, and has a business contract for you to sign. You should also receive an invoice or bill.

Return from Hiring an Employee to Family Child Care Business Planning