CPN Regulatory Compliance & Legal Framework 2 — Questions and Answers
Question 1: Under the Fair Labor Standards Act (FLSA), a nanny who works more than 40 hours in a single workweek must receive overtime pay at what rate?
- Same as regular rate
- 1.5 times the regular rate (Correct answer)
- 2 times the regular rate
- Double time only on holidays
Correct answer: 1.5 times the regular rate
The FLSA requires that household employees working over 40 hours per week be paid at least 1.5 times their regular hourly rate for overtime hours.
Question 2: A family pays their nanny $700 per week in cash and does not withhold taxes. What is the family legally required to do if wages exceed the annual household employee threshold?
- Nothing, cash payments are not taxable
- File a Schedule H and pay employer payroll taxes (Correct answer)
- Simply report it on the nanny's W-2 at year end only
- Convert the nanny to an independent contractor
Correct answer: File a Schedule H and pay employer payroll taxes
Families must file Schedule H with their federal tax return and pay Social Security, Medicare, and potentially unemployment taxes once wages exceed the IRS threshold.
Question 3: Which federal form must an employer complete within three days of a nanny's first day of work to verify eligibility to work in the United States?
- W-4
- I-9 (Correct answer)
- SS-4
- W-9
Correct answer: I-9
The I-9 Employment Eligibility Verification form must be completed within three business days of the employee's start date to confirm legal work authorization.
Question 4: A nanny discovers that the family has misclassified her as an independent contractor instead of an employee. What is the primary legal consequence for the family?
- The nanny forfeits all overtime protections
- The family owes back payroll taxes, penalties, and interest (Correct answer)
- The nanny must repay all wages received
- The family is only liable for state taxes
Correct answer: The family owes back payroll taxes, penalties, and interest
Misclassifying an employee as an independent contractor can result in the family owing back payroll taxes, significant IRS penalties, and accrued interest.
Question 5: Which state-level law requires employers, including household employers in most states, to provide paid or unpaid leave for employees who need to care for a sick family member?
- Fair Labor Standards Act
- Family and Medical Leave Act (FMLA)
- State paid family leave or FMLA, depending on employer size (Correct answer)
- Americans with Disabilities Act
Correct answer: State paid family leave or FMLA, depending on employer size
FMLA applies to employers with 50+ employees, so most household employers are exempt federally, but many states have their own paid family leave laws that cover smaller employers.
Question 6: A nanny working in California is entitled to a 30-minute unpaid meal break after how many consecutive hours of work?
- 4 hours
- 5 hours (Correct answer)
- 6 hours
- 8 hours
Correct answer: 5 hours
California law requires employers to provide a 30-minute unpaid meal break when an employee works more than 5 consecutive hours.
Question 7: When a nanny is required to be 'on call' overnight in the employer's home but is allowed to sleep, how are those hours typically treated under federal wage law?
- All hours must be paid at full rate
- Sleep time may be excluded if specific FLSA conditions are met (Correct answer)
- Only the first 4 hours must be paid
- On-call pay is optional and set by the employer
Correct answer: Sleep time may be excluded if specific FLSA conditions are met
The FLSA allows up to 8 hours of sleep time to be excluded from compensable time for employees who work shifts of 24 hours or more, subject to specific conditions.
CPN Regulatory Compliance & Legal Framework 2
Under the Fair Labor Standards Act (FLSA), a nanny who works more than 40 hours in a single workweek must receive overtime pay at what rate?