Wealth Matters: Avoiding Legal Problems When Managing a Household Staff

But this column is for the other people who employ household help — housekeepers, nannies, chefs, butlers and estate managers. Their problems are more about being compliant with employment and tax laws and ensuring low turnover.

“There is no rocket science in our business,” said Travis Dommert, chief operating officer of the Lindquist Group, one of the oldest placement firms for household help in the country. “It’s about how you hire, manage and retain good people and not get sued in the process.”

Yet otherwise smart, wealthy people seem to have a harder time managing their household employees than the people they work with in their day jobs. Here are some tips for people planning to hire household help.

NECESSITY VS. LUXURY During the recession, the market for household help was the inverse of other markets: middle- and upper-middle-class consumers kept it afloat, while the wealthiest cut back.

“Housekeeping and nanny requests are what kept us going through the recession,” said Keith Greenhouse, president of the Pavillion Agency, a 50-year-old domestic staffing firm in New York.

The reason, said Mr. Greenhouse and others, is that many middle- and upper-middle-class couples need a housekeeper or a nanny so they can work.

“For most families with household staff, help is not a luxury but a necessity,” said Kathleen English, who has worked with members of the Rockefeller family and now runs the English Household. “Let’s look at what we’re talking about here. This category encompasses your babysitter, your cleaning lady, the helpmate for your mom, the folks who cut your grass and help keep your house running smoothly while you work.”

She said many of her clients had tried hard to retain their help during the downturn.

Among the wealthiest, though, a full accoutrement of servants is either less appealing or an expense they no longer want.

“I think people’s lifestyles have changed,” Ms. English said. “While Prince Charles employs several hundred staff, William and Kate are more modern, live with less and are more casual in their lifestyles. Household staffing needs are beginning to reflect this modern view.”

Acknowledging this, Mr. Greenhouse said his firm had added a training school that employers could use to teach their existing household workers different skills — and reduce the need to hire additional people. He cited the example of a longtime housekeeper who doesn’t have the skills to serve a formal dinner.

COMMON MISTAKES Many affluent Americans are apt to skip over the logistical details when they deal with their household employees. They may rush the hiring process, run afoul of labor laws or create an unnecessarily stressful situation.

In interviewing candidates, the most common mistake people make is not being thorough. “They overlook qualifications and background checks,” said Kim Cassford, a former private chef and house manager who co-founded the staffing firm Cassford Management. “You want to look at someone holistically. Check all their references. Are they stable emotionally? What’s their credit history? Do they know C.P.R.? Just one isolated incident can ruin a child’s life.”

The best-known problems, though, are hiring undocumented workers and not paying household help legally. Staffing firms say that while they make sure the people they place have proper documents, it is not their responsibility to address how the workers are paid.

“We offer a payroll service that is geared toward domestic staff,” Mr. Greenhouse said. But some clients, he said, do not want to be told how to pay the people they employ.

“They want their staff and want to pay them however they want,” he said. “We don’t advise that. But you can’t twist their arms. They want to do it the way they want to do it.”

It is hard to believe that anyone thinks it is all right to employ illegal household staff or pay them under the table. But the chances of getting caught are low.

Timothy F. Geithner’s confirmation hearings for Treasury secretary got bogged down in 2009 when it came out that he had employed a housekeeper whose working papers expired while she worked for him. And plenty of people in the wealthier suburbs around New York, where Mr. Geithner lived, blithely ignore the requirement to withhold income taxes for their nannies. But why?

“There is a knowledge gap and this perceived hassle factor,” said Mr. Dommert of the Lindquist Group.

Article source: http://feeds.nytimes.com/click.phdo?i=a52c218a603eb88d7fa3affbb24d1865