Things You Need to Know When Hiring a Live-Out Caregiver in Canada


So you do not want to have a live-in caregiver through the Canadian live-in caregiver program, and decide instead to go the live-out route.  Well below are some things you will need to know when hiring a live-out caregiver in Canada.

1. If you are thinking about circumventing the rules and paying your nanny cash, remember this is a lose-lose situation.  First of all, if the government catches you not only will they assess you and make you pay the amounts which should have been paid to the CRA, such as paying tax, contributing to the Canada Pension Plan, Employment Insurance, and buying workplace insurance, but they will make you pay the employee portion as well.  In addition, you lose the $7,000 deduction on your taxes, and your nanny loses her right to collect Employment Insurance if she gets laid off.

What usually happens in that case is the nanny gets laid off, tries to collect EI, is informed by HRSDC that she is not entitled because she has not been paying into the plan at which point she provides records of payments and then the government is looking for you.  Yes, it is more difficult to do but it also rarely ends well.

2.  Make sure you have a HRSDC approved labour contract clearly spelling out the details of the job, much as you would sign with your employer.  It’s all the same.  They’re generally categorized as domestic workers and they have rights to feedback, clearly defined breaks, details around pay, vacation, overtime, expectations, roles and responsibilities.  Long gone thankfully are the days where potential employers feel that Canada is better than Hong Kong so it’s okay to stretch working hours, responsibilities or ignore breaks.  Getting an agreed upon contract creates good relations between you and outlines exactly everything which can keep you from getting in trouble down the road.

3.  What do I need to know about paying my nanny?  Well, as the employer, nannies are not self-employed, you have to treat them in a manner in which you would want to be treated and that means with respect.  You negotiate the contract and if there are issues with performance, you have to address them in a respectful manner, much in the same way your employee has venues to complain about your treatment, including suing you for wrongful dismissal.

This step-by-step guide to payroll deductions should help getting you on the way and around the fear of the CRA;

Step 1 – Call 1.866.959.5525, the Canada Revenue Agency business help line, follow the prompts for payroll / source deductions accounts and ask the customer services representative for a business (or BN) number.

Step 2 – You have the BN set up in your name, so now you need the information on your one employee, your nanny.  Gather from her on the contract her full name, SIN and live-out address.  You’ll need this later…

Step 3 – Next you will need to figure out how much you will need to remit to the CRA each month.  You can do this by entering the amount you have paid your nanny into the CRA payroll calculator; http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/tbls-eng.html.  The calculator breaks down how much you will need to remit for taxes, EI and CPP.  This link also provides other information on being an employer, rights and responsibilities.  Read this if you have time or need something to help you get to sleep.

Step 4 – Monthly remittance of the held back funds (deductions of source pay).  By the 15th of month you will be filling out the remittance voucher sent to you from the CRA – unless you sign up to remit online (check My Account).  You remit on the 15th for the previous month, so on June 15th you are remitting for May 1st to 31st.  On the form you need the gross pay, net pay, EI, CPP, month remitting for, number of employees and tax withheld.  For me, the quickest is to take that to the bank on the 15th (16th if the 15th is a Sunday, 17th if the 15th is a Saturday, and 18th if the Monday is a holiday and the 15th is the Saturday.  The bank stamps the form, takes the funds from my account and takes the remittance voucher.  Done.

Step 5 – Keep the copy of the remittance voucher with the bank stamp in a file as you’ll need it when filing your personal income taxes (T1) each year and providing your nanny a T4 by February 28th of the following year.

4. Most often asked questions surround legal obligations, such as; when ending a contract with your nanny, if she gets sick, falls pregnant or gives notice.  First off, be sure that the contract with your nanny establishes the length of notice needed if one of you wants to end your working relationship. Any penalties for not meeting that notice period should be spelled out in your contract too.  As for the other things, just put your self in her shoes and change the employer from you to a large firm.  Would your employer allow you to take short-term disability time off or long-term disability time off?  Absolutely!  By law they are required to and the same goes for your caregiver.  If she falls pregnant you cannot fire her for the same reasons.  If you need help, seek an employment lawyer.

But with all that being said, if the separation is mutually agreed upon, remember you will need to provide your nanny with a Record of Employment (ROE) within 8 days of her last day of work.  Don’t wait!  This is a controlled form to prevent EI fraud, so reach out to Service Canada right away and they will send you a kit with the details on how to do this.

5.  Where can I get a contract?  I recommend Googling “HRSDC approved nanny contract.”  It will lead you to complete the key sections of  the contract which cause the most headaches down the road, specifically; Overtime, training, duties she cannot legally perform for me, tracking of expenses – petty cash, and holiday pay.

 

I hope this provides some insight and helps clear up some lingering issues around what to do with live-out caregivers in Canada.  All in all, just remember to treat your employee with the same respect you would want to be treated as an employee.  Karma’s a bitch!

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Oh boy, open permit season causes all kinds of headaches, eh?


Welcome to the wonderful world of hiring a live-in caregiver through the Canadian Live-In Caregiver Program (LCP). You’ve made your mind up that you need a nanny and you have done your homework and realized that a live-in nanny through this program is the cheapest way to go. You have moved past the idea that a complete stranger will be coming to live with you and raising, or helping in the raising of, your child(ren). You have met with, interviewed and assessed strangers, or sponsored from overseas – relying on the judgement of an agency (more strangers) and at the end of the day, this turns out to be the easiest part of the process. Who knew?

There is paperwork… Lots of paperwork and a really good agency will prepare that for you, or help you prepare it while at the same time educating you on the LCP and the same time preparing you for the interview with Service Canada, setting up the terms of the contract with the nanny, helping get your CRA payroll number in place and making sure all other paperwork is in good order.

The LCP, you see, has changed a lot since 2004 when we sponsored our first nanny and that is solely because people abuse the program and in turn they abuse the people that they have hired to look after their houses and their children. By forcing these nannies to work super long hours (the story goes that because in Hong Kong they are not treated well, in Canada they would not complain about a 12 hour day), or they treat them like prisoners not allowing them to come and go freely from the family home outside of working hours. Expecting them to be on call 24/7, or expecting them to look after your 3 children, and keep the house spotless and cook for the family. If you cannot do it, what makes you think they can? The abuses always make the news.

As a result, the Federal Conservative government has been tightening the screws on the LCP for the past five years, making the rules tighter on the employment side, requiring potential employers to provide contracts to the employees outlining overtime (after 44 hours worked per week) and the giving of 2 weeks notice (or payment in lieu) prior to termination. A lot of attention was paid to having these employees respected and treated accordingly.

Then came the attack on nanny agencies in effort to force out the illegitimate ones but also unnecessarily tightening the screws on the legitimate ones, requiring them to have lawyers and immigration consultants in their business’ as well. Driving up the costs to the agencies ultimately means it is more expensive to hire an agency and really are these people not seeking full-time nannies because they need to work in order to make ends meet?!?

Then came the regulation requiring the potential employer to pay for the airfare of the nanny to bring her to Canada. That has been a huge issue since in many cases, there is not a good fit between employer and employee and if the employee is released, the employer already forked out for their flight to Canada. Another burden to the employer, and potentially critical blow to the program. Or even worse when the nanny comes to Canada on the potential employer’s dime then they quit.

But the latest decision by the Minister of Immigration, Jason Kenney just before Christmas and if you employ(ed) a live-in caregiver who had completed their mandatory 2 years in the program, you know exactly what happened there and you have most certainly had to deal with it already. Not only did it come out of no-where but it’s impact was far and wide on may people.

Back in 2004 when we first hired our live-in caregiver we kept her employed until she received her open permit and knowing this we worked with her to ensure she had a post-nanny career option, and we had time to work with our amazing nanny agency to help us sponsor a nanny from overseas to ensure there was no gap in care for our children. The time between the applying for the open permit and the receiving of it was invaluable as it gave us time to get moving on our post-nanny plan.

By 2007, however, the regulations began to tighten for the LCP and it was taking longer to get the open permit, now up to 8 months. Fast forward to 2010, and it was taking well over a year with no end in sight. There was a backlog of 10,000 cases and speculation that none of the nannies in the system were going to be granted their open permits.

This uncertainty made it very difficult for employers to plan for life after their nannies and for the nannies it delayed their planning for their life after employer. None of the nannies could take courses at recognized institutions since they would be deemed to be a foreign student and those students pay a lot of money to take classes which is not feasible on a $23,000/year salary. They needed to know when they could take courses so they could pre-register and employers needed an idea of when they might be leaving for potentially greener pastures.

Then without warning the Federal government granted open permits to everybody in their systems just before Christmas, whether they were waiting over a year, or just a week and within no time there was a lot of chaos.

Nannies, working long hours for low pay through this program, living in someone elses house – usually in the basement – became free agents and wanted more money, and a live-out job, and a Metropass (if in Toronto). Probably different by community, but in our nook in the city there is a going rate for live-outs, apparently, and it entailed more money, and less working hours.

These caregivers needed to earn more to pay for their rent and food, so they could go to school and begin to prepare for their life in Canada they dreamed about when they made the decisions to leave their families and come here.

Not entirely fair to the employer now is it? One day you have a nanny, the next day they are expecting a huge raise and to live out and if you cannot afford the higher salary you get 2 weeks notice, and 2 weeks notice is not enough time to find a suitable replacement, let alone time to sponsor someone from overseas.

Not exactly fair to the caregiver either, I’ll tell you.

You see, my family and our caregiver have really bonded. I mean she looks after the most important things in the world to me, my children and she also teaches them, keeps them safe, keeps my house clean and keeps them fed. Whew. It’s a lot, and in return for this, we pay her, but not just monetarily. We also consider her to be part of the family and in doing to we have always encouraged her to consider life after being a caregiver, life with an open permit and what she wants to do when she grows up.

In my opinion, far too many nannies jump at their opportunity to leave their employer once they receive an open permit and they leave a happy, loving situation to make more money but become more miserable and for what benefit? Nobody wins that situation.

For years now, we have been working with our caregiver on what she needs to do to succeed post-nanny so she doesn’t leave us to work at Tim Horton’s the rest of her life (unless she wanted to) or to be a caregiver for another family – still nowhere near her career goals and dreams. We had already cut back hours for education, recommended courses and locations, and we will do whatever we can to help her hit the ground running full steam ahead into her next career when she’s ready to make that next step, and I strongly feel that as employers we should all be doing this. I do it for my staff that report to me at the office, why wouldn’t I do it for her?

Since we took the time to get to know her and build a relationship with her, we can help her prepare for life after us, and hopefully keep her a part of our children’s lives. Also gives us piece of mind for babysitting.

So if this sudden influx of open permits has caught you by surprise and you have managed to sort through the process think about how you would want to be treated if you were in their shoes, or if you cannot, think about how you would want to be treated if you were an employee working in an organization. Would you want your employer to talk with you about life after that job, career development and opportunities, or would you want them to work you to the bone – content that they are paying you – and then waiting for you to be offered another opportunity and threatening to leave before getting that better offer.

I think we all know the answer to that.