CPN Regulatory Compliance & Legal Framework 3 — Questions and Answers
Question 1: A family hires a nanny and agrees on compensation but does not sign a written work agreement. What is the primary legal risk this creates?
- The employment is automatically void
- Disputes over terms, hours, and pay become difficult to resolve (Correct answer)
- The nanny cannot be terminated
- The family cannot deduct childcare expenses
Correct answer: Disputes over terms, hours, and pay become difficult to resolve
Without a written agreement, disputes over pay rates, hours, duties, and termination terms lack documented evidence, making resolution difficult and potentially costly.
Question 2: Which federal agency enforces the Occupational Safety and Health Act (OSHA), and does it typically cover domestic household workers?
- IRS; yes, it covers all workers
- OSHA/Department of Labor; generally does not cover domestic household workers (Correct answer)
- Department of Homeland Security; yes, for licensed caregivers only
- EEOC; coverage varies by state
Correct answer: OSHA/Department of Labor; generally does not cover domestic household workers
OSHA is enforced by the Department of Labor but generally exempts private household employers, though some states have laws providing similar protections for domestic workers.
Question 3: A nanny's employer fires her the day after she files a complaint about unpaid wages with the state labor board. This action is most likely an example of:
- Legal constructive dismissal
- Illegal retaliation (Correct answer)
- At-will termination
- Wrongful classification
Correct answer: Illegal retaliation
Terminating an employee shortly after they engage in a legally protected activity, such as filing a wage complaint, is generally considered illegal retaliation.
Question 4: A nanny who lives in the employer's home (a live-in domestic employee) is generally exempt from which specific FLSA requirement that applies to live-out nannies?
- Minimum wage
- The requirement to be paid for all hours in a 24-hour period (Correct answer)
- Social Security withholding
- I-9 verification
Correct answer: The requirement to be paid for all hours in a 24-hour period
Live-in domestic employees are generally not required to be compensated for every hour in a 24-hour day under the FLSA, unlike live-out employees.
Question 5: Under the Americans with Disabilities Act (ADA), a nanny who develops a medical condition asks her employer for modified duties as a reasonable accommodation. Because the family has fewer than 15 employees, the ADA:
- Still fully applies, regardless of employer size
- Does not apply, but some state laws may still require accommodation (Correct answer)
- Applies only if the nanny has worked there over 12 months
- Requires the family to hire a replacement temporarily
Correct answer: Does not apply, but some state laws may still require accommodation
The ADA only applies to employers with 15 or more employees, so most household employers are exempt, though state disability laws may impose similar obligations.
Question 6: A background check on a nanny applicant reveals a decade-old misdemeanor conviction. Under the Fair Credit Reporting Act (FCRA), what must the employer do before taking adverse action based on this report?
- Immediately disqualify the applicant and document the decision
- Provide the applicant a pre-adverse action notice and a copy of the report (Correct answer)
- Report the finding to the local child protective services
- Consult with the state licensing board before deciding
Correct answer: Provide the applicant a pre-adverse action notice and a copy of the report
The FCRA requires employers to provide applicants with a pre-adverse action notice and a copy of the background report before making a final adverse hiring decision.
Question 7: Which tax form must employers provide to household employees by January 31 of each year to document wages earned and taxes withheld in the prior year?
- 1099-NEC
- W-2 (Correct answer)
- 1040-ES
- Schedule C
Correct answer: W-2
Employers must issue a W-2 form to household employees by January 31, documenting gross wages and all tax withholdings from the previous calendar year.
CPN Regulatory Compliance & Legal Framework 3
A family hires a nanny and agrees on compensation but does not sign a written work agreement.
What is the primary legal risk this creates?