How Unemployment Benefits Work for Nannies 
By Tom Breedlove, HomePay by Breedlove
Our consultants at HomePay speak to nannies and families daily about a variety of tax and legal questions – providing expert guidance, adding clarity, alleviating concerns and, hopefully, make lives a little easier.
Unfortunately, not every conversation is a positive one. We heard from a nanny the other day that was let go from her job because the father would be permanently working from home and could assume all the childcare duties. The nanny was wondering if she could get unemployment benefits to help her out financially until she could find another job. It’s a common question we hear from both nannies and families throughout the year, so here’s what you need to know about how unemployment benefits work if you’re let go from your job:
If you earn $1,000 or more in a calendar quarter, the family is required to pay federal and state unemployment insurance taxes. (This threshold is lower in California, New York and Washington, D.C. Also, nannies in Alaska and New Jersey must have state unemployment insurance taxes withheld as part of the payroll process). These taxes accumulate into a state-managed fund and are paid out to workers who qualify for benefits. Generally speaking, if you lose your job due to no fault of your own – like the nanny who called us – and you’ve been paid “on the books,” you’ll qualify for benefits.
The process of receiving unemployment benefits starts with making a claim through your state’s Department of Labor – or equivalent agency. A case worker will review all the details you’ve made in your claim to determine the amount of benefits you’ll receive. They will contact the family to make sure everything in your claim is accurate. If your claim is granted, you can expect to receive around 50% of your regular wages for up to 6 months.
Obviously no one wants to think about being without a job, but it’s important to know that if it happens, you have a safety net in place to support you while you find another one. However, this all assumes you’re being paid on the books. Nannies who are paid under the table (or who allow themselves to be classified as independent contractors) do not qualify for unemployment protection. This is just one more example of how legal pay pays off – and why you shouldn’t think of taxes as a burden, but rather an investment in your financial freedom.
If you have any questions about unemployment, visit www.myhomepay.com or give us a call. We’re here to help
