Did you get a Workers’ Comp Notice of Penalty?
Here’s what you should know.
The pandemic shone a spotlight on the domestic workforce in a way not seen in decades. When the country shut down in 2020 and families were made to stay home, it made the nanny profession a precarious one. As essential workers, many nannies continued to show up in person for their employers every day, providing invaluable help and stability at a time when both were in short supply. At the same time, countless caregivers lost their jobs overnight and turned to filing for unemployment in order to make it through.
Now, as government agencies are working through the bureaucracy of 2020 and the first half of 2021, it’s a scramble to keep up. We have fielded many calls from families receiving confusing Worker’s Compensation notices as the agencies work through unemployment claims and verifying employment.
What is the Workers’ Compensation Notice of Penalty?
When filing for unemployment, a laid-off worker will need to report their place of employment. This means that nannies were asked to verify their employment, and it’s possible that your family was mentioned as an employer. In New York, all employers are legally required to obtain workers’ compensation insurance for full-time employees (40 hours per week or more and/or if they live in the home), in the case their employees are injured on the job.
When verifying place of employment, the government is also confirming that those employers had workers’ compensation insurance in place. If you are the person employing your nanny, this means they will be verifying that you had a valid workers’ compensation insurance in place at the time of your nanny’s employment. If the agency does not find this, they will send you a notice, most likely entitled ”Notice of Penalty Pursuant to Section 52(c) of the workers’ compensation law”.
Why am I getting this penalty?
Many parents have reached out to us, frustrated by and worried about these penalty notices, when they were not aware they needed to pay into workers’ compensation insurance. The problem with these notices is that they are being distributed without government agencies first confirming whether or not a family is required to have workers’ compensation insurance for their caregivers. This means that many families who do not need to pay workers’ comp are getting penalty notices. Furthermore, it is up to these families to contest the penalty to get it rescinded.
If your nanny or babysitter worked less than 40 hours per week, you may have still received the penalty notice, even though you are not legally required to carry worker’s compensation insurance. On the other hand, if your nanny or babysitter was employed by an agency, such as Smart Sitting, you do not need to set up workers’ compensation insurance because we have done this on our end. If your caregiver was working for you as a part of a corporate sponsored backup child care program, you are also not responsible for carrying worker’s compensation insurance. Even still, you most likely have received the penalty notice. In fact, some families who are required to have workers’ compensation insurance and actually do so, are still getting these notices, making the situation even more confusing and frustrating.
So what do I do about the workers’ comp penalty?
Families have asked us what causes these workers’ compensation penalty notices to go out to certain families, and the truth is that the process isn’t transparent. We do not know why some families are getting the notices, nor why the government isn’t first confirming details before sending them out. The important thing to know is that if your nanny was employed for less than 40 hours per week, you do not need to worry. If you had a 40 hour per week nanny and paid legally and on payroll, it is highly likely that your payroll provider ensured your workers compensation compliance and that you are also receiving this message in error.
It will require a bit of paperwork, but it is easily fixed. Families who are receiving these notices that do NOT need a policy can reply stating that their employee works less than the 40 hours, and does not live in the home, and the issue should be resolved.
If you worked with a nanny tax agency, such as our partners at Home Pay, they will be able to help you with the paperwork you need. If the nanny or sitter is actually employed by us here at Smart Sitting, we are equally happy to provide you with that paperwork, and you will be in the clear.
Do you still have questions? Need help? Please feel free to reach out to us at here at SmartSitting at 646-396-0230 or team@smartsitting.com. One of our team members will be happy to help you get the information you need and put you at ease. For regular, important information about nanny employment, please subscribe to our newsletter.