What?! You want a W-2! This was informal!

[jacked]

What is the name of your state (only U.S. law)? California

I am a single dad with four kids. I hired a nanny when my wife left me. I could not afford to pay much so I offered one of my rooms for rent and a private bathroom as additional compensation. I found a taker and bussed her in from Florida.

She worked for me for about 10 months and then recently suddenly quit. She quit on a Sunday night with no warning and no explanation. Surprisingly she also invited two Sheriffs and a "friend" to help her get her things. No one would tell me what was going on. The police said they were there to "make sure nothing happens" and the friend would only say "Jane no longer wants to work for you". That was early December.

She asked for her last weeks pay and I gave her a check. It had her name, said she was the nanny, and that it was the weekly stipend.

Just after Xmas she asked me for a W-2 so that she could do her taxes. I was not prepared for this since it was a very informal work relationship.

My Dad helped me research California law related to hiring a full-time nanny. We were surprised at what we found. Apparently I should have registered with California to be an employer and I needed to be paying her minimum wage, withholding various taxes, etc. And now she is asking for a W-2!

Worse yet, I think she may be planning on suing me for wages short of minimum wage even though half her compensation was the room and board. There is nothing in writing, but she may have copies of all the checks I gave her. There is also some email correspondence concerning the last weeks pay.

She is now demanding the W-2 and I am not sure what to do. If I produce something, it may sink me in court. I have no idea what her recourse is if I simply ignore her request for a W-2. What could she do? What is my best coarse of action?

A worried father

 

[FlyingRon]

Ah, Nannygate. She was your employee, there's no "informal" out in the law. People who work for you are either independent contractors (which she is not) or employees.

You need to get a CPA and/or lawyer and fix this now. If you don't give her a W-2, she can apply to both the IRS and California for a determination of employee status anyhow. The longer you wait the worse the penalties and interest is going to be.

You can count room and board for up to half of the minimum wage.

 

[eerelations]

In this case, informal = illegal.

 

[HappyWanderer]

I'd lean towards an attorney. While a CPA has some protections from disclosing what you tell them, the attorney/client privilege is more robust. Here, it's going to cost the OP money, at best. so he might as well get representation up front.

However, even from what we know, LOTS of laws have been broken. From the description, I suspect there is a possibility of a few more if we listen to the nanny's description of events.

I think it would be best to get an attorney now, stop talking with anyone else about things and prepare for litigation, fines and penalties.

 

[pattytx]

I'd lean towards an attorney. While a CPA has some protections from disclosing what you tell them, the attorney/client privilege is more robust. Here, it's going to cost the OP money, at best. so he might as well get representation up front.

However, even from what we know, LOTS of laws have been broken. From the description, I suspect there is a possibility of a few more if we listen to the nanny's description of events.

I think it would be best to get an attorney now, stop talking with anyone else about things and prepare for litigation, fines and penalties.

What he said.

OP, horse out of the barn now, but you should have checked with your accountant before you jumped into this employment relationship.