Employee benefits go a long way in retaining talented household help
By Guy Maddalone
Recruiting high-level household employees is difficult enough – retaining
staff can be even harder. Although employee benefits are optional and seldom
required by law, offering benefits greatly helps household employers attract as
well as retain employees. To get and keep the most talented employees, employers
must treat employees like professionals, and should therefore take the time needed
to secure a benefits package by reviewing with employees what benefits they require.
The household employment industry has been slow to provide household help with medical
benefits and health care coverage, though this number is increasing. According to
a 2003 GTM Household Employment Expert’s Nanny Employer Survey, nearly 45 percent
of nannies now receive medical insurance. Health insurance is a priority for many
household employees because of the high cost of coverage and medical fees. The cost
is high for the employer as well, though various options are now on the market that
make coverage more affordable than ever. Hawaii is the only state in which health
care coverage for employers is mandated; in the rest of the United States it is
optional, and is therefore extremely attractive when recruiting household help.
A Health Reimbursement Account (HRA) is a variation for the employer who wants to
offer a contribution program for health-related expenses as an employee benefit.
An HRA is an employer-sponsored plan that reimburses an employee for eligible medical
care expenses, as defined by the IRS. The employer funds a pre-determined amount
of money for each eligible employee, and monies in the account are not subject to
employment taxes. HRAs allow employees and employers to take advantage of the lower
premiums offered by high-deductible major medical plans and help keep healthcare
costs under control. The advantage is that monies can roll over each year, preventing
the employer from losing a contribution if an employee does not use up the account
in a given year.
Another option is a Health Savings Account (HSA), a tax-exempt trust or custodial
account established to pay for qualified medical expenses, and it can be contributed
to by an employer or employee. HSA funds may be used to cover the health insurance
deductible and any co-payments for medical services, prescriptions or products,
over-the-counter drugs, and long-term care insurance.
According to the same survey, although under 5 percent of nannies receive retirement
savings, establishing a retirement plan may be very helpful in attracting the best
in household help. The employer must comply with IRS tax and administrative requirements.
Two popular retirement options for household employees are the Individual Retirement
Account (IRA) and the Roth IRA. Both are fairly simple to set up and are therefore
suitable as a household employee benefit.
Another benefit that employers may offer is life insurance, to provide a death benefit
to the employee’s dependents or beneficiaries. There are generally two types of
life insurance, term and permanent. The coverage may vary, but commonly it covers
either one full year of an employee’s salary, or double an employee’s salary.
Educational assistance for education or training outside
of working hours may also be available to the employee, as may paying for professional
membership fees, industry conferences or trade journal subscriptions.
An often overlooked employee benefit is flexible work hours,
particularly important to employees with significant personal obligations such as
the need to attend regular medical treatment or to family needs. Flexible hours
are not an alternative to personal or sick time, but instead a long-term arrangement
with the employee working the full workweek but at “non-standard” hours.
Use of personal property and facilities normally unavailable
to the employee outside of work can be considered a great employee benefit, though
employees should be reminded that the employer owns the property/facility, and that
the employer has the right to inspect and monitor usage. The top 20 “job perks”
offered to household help, as found in the book How To Hire & Retain Your Household
Help by Guy Maddalone, include food, Internet and TV access, car usage,
etc.
Benefits Checklist
ü
Investigate health and insurance coverage options
thoroughly to see which one best fits an employee’s needs and an employer’s budget.
ü
For the benefit of the family and household
help, calculate the amount of personal time to be offered to employees.
ü
Set regular review periods for salary changes
and/or salary bonuses, and make sure employees know when these might occur.
ü
Be clear on the extra perks the employee receives
while working within the household – including use of facilities and property.
To read in more detail about this topic, plus much more,
order your copy of How to Hire a Nanny, by Guy Maddalone, the nation’s
household help expert, online at
http://www.gtm.com/gtm_household/how_to_hire_a_nanny.html or by calling
888-432-7972.
Copyright 2009 GTM Household Employment Experts. All rights
reserved.