Many employers misclassify staff mistakenly or misclassify staff in order to reduce taxes, insurance costs, and record-keeping responsibilities. Yet, this can be a costly error.<\/span><\/p>\n Due to the complexities of a provider’s responsibilities as an employer, he\/she may want to consider using a payroll service, which will perform the accounting, payments, and reporting. Some banks offer the service with their business accounts.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=””][vc_column][vc_tta_accordion active_section=”0″ collapsible_all=”true”][vc_tta_section title=”Employer Responsibilities ” tab_id=”1447811802597-64cd77d8-aa8b”][vc_column_text]In an effort to ensure a healthy and safe environment for children in childcare, THe New York State Office of Children and Family Services (OCFS) developed regulations limiting the number of children in attendance per adult present. \u00a0OCFS\u00a0mandates one caregiver for every two children in attendance under the age of two years.<\/span><\/p>\n The regulations regarding the child to staff ratios and infant to staff ratios may mandate that a family child care provider has an assistant.<\/span><\/p>\n This person would most appropriately be classified as an employee, regardless of the number of hours worked or amount compensated. See \u201c<\/span>Can I Classify Assistants or Substitutes as Independent Contractors?<\/span><\/a>\u201d<\/span><\/p>\n There is a host of responsibilities as an employer. A provider may want to consider using a payroll service or opening a small business checking account with payroll service to assist with the complexities of calculating, reporting withholding and payroll taxes.\u00a0<\/span><\/p>\n Verify work eligibility – The employer must verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Employment Eligibility Verification (Form I-9). The I-9 is not filed with United State Citizenship and Immigration Services (USCIS) or U.S. Immigration and Customs Enforcement (ICE). The form must be retained and stored by the employer for up to for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials from the Department of Homeland Security, Department of Labor, or Department of Justice.<\/span><\/p>\n Persons authorized to work in the United States are:<\/span><\/p>\n A childcare provider must report newly hired or rehired employees who will be employed in New York State within 20 calendar days from the hiring date. He\/she cannot submit a report without an employee’s Social Security Number (SSN).<\/span><\/p>\n This can be done online at\u00a0<\/span>www.nynewhire.com<\/span><\/a>\u00a0or; via mail by sending a copy of the employee’s\u00a0<\/span>Employee’s Withholding Allowance Certificate (Form W-4)<\/span><\/a>\u00a0or\u00a0<\/span>Employee\u2019s Withholding Allowance Certificate (Form IT-2104)<\/span><\/a>\u00a0– to:<\/span><\/p>\n New York State Dept of Taxation and Finance<\/span> The W-4 is used as a basis for calculating of the correct withholding of federal income tax from an employee\u2019s pay.<\/span><\/p>\n Some taxes are paid by both the employer and employee, while others are paid solely by the employer or the employee.<\/span><\/p>\n <\/p>\n Although the withholding tax is paid solely by the employee, it is up to the employer to calculate the correct amount to be withheld and for transfer funds and make payments. Please see below for instructions on how to make payments.<\/span><\/p>\n There are several ways to figure income tax withholding (Wage Bracket Method, Percentage Method, or Alternative Methods.) Each requires the employee\u2019s W-4 and use of tables in Publication 15 (Circular E), Employer’s Tax Guide.<\/span><\/p>\n Both the employer and the employee pay 6.2% of wages toward Social Security. The Social Security Wage Base (SSWB) limit (the amount of wages submect to taxes in a gien time period) is $118,500, beyond this amount both employer and employee need not collect Social Security tax. The information provided on Form W-4 does not change the amount of Social Security taxes.<\/span><\/p>\n Medicare tax is 1.45% each for the employer and the employee. There is no wage limit for Medicare taxes so all wages are subject to withholding. The information provided on Form W-4 does not change the amount of Social Security taxes.<\/span><\/p>\n The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. Employees do not pay federal unemployment taxes.<\/span><\/p>\n The FUTA tax is 6.2% on the first $7,000 paid to each employee during a calendar year after subtracting any payments exempt from FUTA tax.<\/span><\/p>\n The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding, social security and Medicare taxes, but not to FUTA tax.<\/span><\/p>\n Payment for the services of a child under age 21 who works for his or her parents, whether or not in a trade or business, are not subject to FUTA.<\/span><\/p>\n Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. The employer is the first subject to the state tax. Then the tax becomes a credit against federal tax.<\/span><\/p>\n Note: Payroll taxes (social security, Medicare, federal unemployment tax, and state unemployment tax) are deductible business expenses. Learn more about taxes\u00a0<\/span><\/i>here.<\/span><\/i><\/a><\/p>\n The Employer’s Quarterly Federal Tax Return (Form 941)<\/span><\/a>\u00a0quarterly withhold income taxes, social security tax, or Medicare tax from employee’s paychecks. THe form is due on the following dates: April 30, July 31, October 31, and January 31.<\/span><\/p>\n Report the following amounts.<\/span><\/p>\n The due date for filing\u00a0<\/span>Form 940<\/span><\/a>\u00a0for 2016 is January 3, 2017. However, if a provider deposited all FUTA tax when it was due, he\/she may file Form 940 by February 10, 2017.<\/span><\/p>\n Form 944 is for employers whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less for the year.<\/span><\/p>\n Employers in New York State must electronically submit a Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return (Form NYS-45).\u00a0<\/span>File the NYS-45 online<\/span><\/a>. For more information, call (888) 899-8810.<\/span><\/p>\n Employers must issue\u00a0W-2s<\/span><\/a>\u00a0 to employees by Jan. 31. The W-2 shows the amount of compensation paid to employees and the amount of tax withheld for the year. The data is used by Social Security to update an employee\u2019s lifelong earning history and then, from that earning history, calculate the employee\u2019s benefits. An employer can be assessed a penalty for W-2 names and Social Security numbers that do not match.<\/span><\/p>\n An employer can use W-2 Online to complete W-2 forms and print copies suitable for distribution to employees. In order to do this, the employer must register at\u00a0<\/span>https:\/\/secure.ssa.gov\/acu\/IRESWeb\/registration.jsp<\/span><\/a><\/p>\n Generally, federal payments are made via electronic fund transfers by using the Electronic Federal Tax Payment System (EFTPS). For more information visit\u00a0<\/span>EFTPS<\/span><\/a>.<\/span>[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Can I Classify Assistants or Substitutes as Independent Contractors?” tab_id=”1447862034778-154fed5a-9e88″][vc_column_text]There are two situations where you might hire someone to help you care for children and the person would be considered an independent contractor.<\/span><\/p>\n The first situation is a person who is self-employed in the business of providing substitute care for child care providers. Such a person should have a business name registered with your state and their own taxpayer identification number. She\/he should work for more than one child care provider each year and use his\/her own contract.<\/span><\/p>\n The second situation is when you hire a substitute through an employment agency and you pay the agency rather than the substitute.\u201d<\/span><\/p>\n It is a mistake that could prove to be very costly to the business owner, who may end up owing employee-related costs like back taxes and any applicable penalties for state and federal income taxes.<\/span><\/p>\n Resources and links:<\/span><\/p>\n [\/vc_column_text][\/vc_tta_section][vc_tta_section title=”NYS Demands Workers\u2019 Compensation and Disability Insurance” tab_id=”1447865358365-5a78ed88-5953″][vc_column_text]When purchasing workers’ compensation insurance, an employer is buying the following protections:<\/span><\/p>\n The employer must pay for the cost of insurance coverage, as it illegal to require employees to pay any of the costs associated with workers’ compensation premiums or injuries.<\/span><\/p>\n Family members providing paid or unpaid services to a for-profit business are counted as employees for workers\u2019 compensation coverage purposes.<\/span><\/p>\n The New York State Workers Compensation Board has the legal authority to require employers to provide coverage and can penalize those who do not. Furthermore, New York State Office of Children & Family Services (NYSOCFS) requires that family childcare providers obtain workers\u2019 compensation before putting employees to work and submit documents verifying this coverage. Learn more about regulations –<\/span>here.<\/span><\/a><\/p>\n An employer’s failure to provide workers’ compensation coverage is a crime, punishable by fines and\/or criminal prosecution. A stop work order may be issued. Add onto that the legal cost of defending and possibly losing a civil suit for an injury of an employee, and the cost of workers’ compensation insurance is very reasonable.<\/span><\/p>\n The New York State Disability Benefits Law is part of the New York State Workers\u2019 Compensation Law. If a provider employs one or more employees for 30 days in any calendar year, then he\/she must obtain disability benefit insurance.<\/span><\/p>\n How to Obtain Coverage<\/b><\/p>\n A childcare provider can obtain coverage through:<\/p>\n Workers\u2019 Compensation<\/span> <\/p>\n A provider can also find coverage through the more than 200 private insurance carriers authorized by the New York State Insurance Department to provide workers’ compensation insurance to employers. If appropriate, look through The Real Yellow Pages (yp.com), contact an insurance broker, carrier or agent, check with a trade association, or conduct additional research to find the most appropriate insurance coverage for the company.<\/span><\/p>\n Disability Insurance<\/span> Both Workers\u2019 Compensation and Disability Insurance premiums are tax-deductible business expenses. Find more information about taxes\u00a0<\/span>here<\/span><\/a>.<\/span><\/p>\n Employers must post a Form Notice of Compliance – Workers’ Compensation Law (C-105).<\/span><\/p>\n Resources and links:<\/span><\/p>\n [\/vc_column_text][\/vc_tta_section][vc_tta_section title=”New York State Workers Compensation” tab_id=”1447865671230-3135e6d2-a7c5″][vc_column_text]Click to play video in new window: Not every company is licensed to operate in each state. As a general rule, a provider should buy from a company licensed in his\/her state. THis way, should a problem\u00a0arise he’she can contact the state insurance department for help. To find out which companies are licensed in your state, contact the\u00a0<\/span>state insurance department<\/span><\/a>.<\/span><\/p>\n Many companies that sell insurance policies have prices that vary greatly from one policy to another, so it really pays to shop around. It is recommended\u00a0that a provider\u00a0obtain at least three price quotes from companies, agents, and the Internet. Your\u00a0<\/span>state insurance department<\/span><\/a>\u00a0may publish a guide that shows what insurers charge for different policies in various parts of your state.<\/span><\/p>\n A provider should buy insurance for financial protection and peace of mind. Select a company that has a track record\u00a0of being financially sound. Learn more about\u00a0the company by using ratings from\u00a0<\/span>independent rating agencies<\/span><\/a>.<\/span><\/p>\n An insurance company and its representatives should answer questions and handle claims fairly, efficiently and quickly. Get a feel for a company by talking to other customers who have used its services or have been serviced by its agent(s). Also, check a national claims database to see what complaint information, if any, it may have on the company. In addition, the state insurance department can provide information about whether an insurance company has consumer complaints about its service relative to the number of policies sold.<\/span><\/p>\n A childcare provider should feel comfortable with his\/her insurance purchase, whether brought from a local agent, directly from the company over the phone, or over the Internet. Make sure the agent or company will be easy to reach if there are any questions or a need to file a claim.<\/span><\/p>\n New York workers\u2019 compensation loss rates vary by industry class codes and insurance company underwriting standards. Every insurance carrier must utilize these manual rates to develop premium.<\/span><\/p>\n As of Oct. 1, 2016, the loss rate for class code 8869 CHILD DAY CARE CENTER PROFESSIONAL EMPLOYEES AND CLERICAL, SALESPERSONS was $1.59 per employee per day. Note this is not necessarily the premium rate.<\/span><\/p>\n Resources and Links:<\/span><\/p>\nResponsibilities as an Employer<\/b><\/h3>\n
\n
Reporting New Employees\/Hires<\/b><\/h3>\n
\n<\/span>New Hire Notification<\/span>
\n<\/span>PO Box 15119<\/span>
\n<\/span>Albany NY 12212-5119<\/span>
\n<\/span>Or<\/span>
\n<\/span>By faxing the above form(s) to (518) 320-1080.<\/span><\/p>\nTax Responsibilities
![\"employees_tax_pic\"](\"https:\/\/www.chcfinc.org\/clearinghouse\/wp-content\/uploads\/2015\/11\/employees_tax_pic.png\")
<\/strong><\/h4>\nWithholding (Income) Tax <\/strong><\/h4>\n
Social Security<\/b><\/h4>\n
Medicare Tax<\/b><\/h4>\n
FUTA Tax<\/b><\/h4>\n
Reporting Responsibilities<\/b><\/h3>\n
Federal Form 941<\/b><\/h4>\n
\n
Federal Form 940<\/b><\/h4>\n
Federal Form 944<\/b><\/h4>\n
Form NYS-45<\/b><\/h4>\n
W-2<\/b><\/h4>\n
Making Payments of Withholdings and Payroll Taxes<\/b><\/h4>\n
\n
\n
\n<\/span>State Insurance Fund (a public insurance carrier in New York State)<\/span>
\n<\/span>NYS Insurance Fund<\/span>
\n<\/span>http:\/\/ww3.nysif.com\/<\/span>
\n<\/span><\/a>1-888-875-5790<\/span><\/p>\n
\n<\/span>NYS Insurance Fund<\/span>
\n<\/span>http:\/\/ww3.nysif.com\/<\/span>
\n<\/span><\/a>1-888-875-5790<\/span><\/p>\n\n
\nhttp:\/\/www.bronxnet.org\/tv\/viewvideo\/4888\/open–legal-corner-with-david-lesch\/workers-compensation<\/a>[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Choosing an Insurance Company” tab_id=”1447866242968-c877c236-6e5a”][vc_column_text]There are many insurance companies, so selecting one can be a challenge. Here are the main points to keep in mind when selecting an insurance company that’s best for the business.\u00a0<\/span><\/p>\nLicensing<\/b><\/h3>\n
Price<\/b><\/h3>\n
Financial Solidity<\/b><\/h3>\n
Service<\/b><\/h3>\n
Comfort<\/b><\/h3>\n