Once we’ve found the perfect Newborn Care Specialist (also known as Baby Nurse or Newborn Specialist) for our client’s newborn, the next question is often- “How do I pay our Newborn Care Specialist?” Although employee pay and the negotiations of the matter are between the household Employer and Employee (not Neverland Nannies), we are often asked for our guidance on this issue. It can be difficult to figure out whether or not the Newborn Care Specialist should be put on a payroll and given a W-2 or paid as an Independent Contractor. Many families don’t want to go through the hassle of obtaining a Federal Tax I.D. number and then going through the issues of Federal Withholdings, etc. To clear all this up once and for all we spoke with a tax expert, Tom Breedlove of Breedlove and Associates, (breedlove.com) whom we always direct our clients to for tax and payroll-related issues, and this is what he had to say:
“We believe that a family could successfully argue that a Baby Nurse should be classified as an independent contractor rather than as an employee. Our logic is that Baby Nurses:
- Have a specialized expertise and do not take direction from the family on how to perform their duty;
- Bring their own tools and equipment;
- Offer their services to the general public;
- Work for a finite period of time (i.e. 2-12 weeks).”
As long as all four of these conditions are met and the Baby Nurse pays her portion of the payroll taxes, Breedlove believes the IRS won’t pursue any action against the employer. If, however, the Newborn Care Specialist does not pay her share of Social Security and Medicare to the IRS, they may come to the family (employer) first. It will be up to the family to make the argument stated above. According to Breedlove:
“This is a complex and, frankly, outdated part of the tax code. The statutes were created in the 1930’s, long before anyone had ever heard of a Baby Nurse and there has not been any case law to establish precedent.”
Another factor to consider is that most of the time, a Newborn Care Specialist will work more than 40-hours per week, so if the family is treating the Newborn Care Specialist as an independent contractor, overtime will not be a factor and the Newborn Care Specialist will just bill the employer for the number of hours of work.
Ultimately, the employer should always consult his/her own tax preparer or attorney to be sure that all tax codes are being followed. Neverland Nannies will always be here to guide you through the process of finding and hiring a Newborn Care Specialist; we make it a pleasant and effortless process!