Since our inception in 1992, we’ve seen a monumental shift in the way families and employees view compliance. Once commonly viewed as something only politicians needed to worry about, it is now widely accepted that paying legally is the right thing – and the wise thing – to do. Here’s why:

1. Audit and Lawsuit Prevention. Families who pay legally do not have to worry about charges of conspiring to commit tax evasion – a serious felony charge that carries fines up to $250,000, jail time and loss of professional license – or legal disputes levied by disgruntled former employees. Think of it as insurance against tax and legal problems.

2. Tax Breaks. There is a common misperception that “nanny tax” compliance will be prohibitively expensive. The truth is most families – regardless of income level – qualify for tax breaks that offset most – if not all – of the employer tax costs. (See “Dependent Care Tax Breaks” for more details or visit our Employer Budget Calculator to get an estimate of your tax breaks).

3. Professional Benefits. When a family pays legally, the employee receives important short-term and long-term benefits, such as social security, medicare, unemployment, disability, and an ability to obtain loans/credit. These benefits and protections have a dramatic impact on the perceived professionalism of the position and, therefore, the quality and duration of the employment relationship.