Whether you need someone in your home full time to care for your children while you are at work or you just want an extra pair of hands around to help you raise your littles, there are plenty of things to know before hiring a nanny. Aside from their childcare style, qualifications, and personality, it is equally as important to take stock of the business part of the equation.
Just like any other profession, nannying is a job. The occupation comes with all of the same financial and scheduling considerations that any other job would hold — a pay rate, taxes, vacation time, holidays, insurance, and more. This is not a teenaged babysitter who comes over once a week for date night that we’re talking about here. (Although they can be absolute life savers!) Nannies are qualified professionals who deserve to be treated as such. After all, you are trusting this individual with the life and development of your child, so setting up their employment correctly is only fair.
Although they will likely end up feeling more like a part of the family, simply put, when you hire a nanny, you become their employer and they become your employee. If you know anything about running a business, you know there is a lot to consider before hiring employees, and the same can be said for hiring a nanny. These nine things to know before hiring a nanny will help ensure both you and your nanny are on the right track.
Eva MacCleery is the director of Care.com HomePay, a professional service which handles all aspects of payroll, tax, and HR compliance for families who have caregivers working in their home. She tells Romper that there are several factors that can influence the going rate for a nanny.
Those factors include your location, the ages and number of children in your home, the nanny’s qualifications (CPR certifications or degrees in child development, for example), and the responsibilities required above and beyond basic childcare. One way to determine a starting pay rate for your nanny is to use a rate calculator.
“Nannies are not independent contractors, they are considered household employees,” Lindsay Thomason, CEO/Founder of The Nanny League, Inc.tells Romper. “Therefore, they should be paid through a payroll company. Misclassification of a household employee can result in tax evasion.”
If you use a nanny agency, they will generally recommend their preferred payroll company to process your nanny’s pay. Thomason recommends Care.com Home Pay, while Jake Greenhouse, co-manager at The Nanny Authority, says their company recommends Pavillion Group Payroll.
“Nannies are legally non-exempt and must be paid hourly on the books with time and a half after eight hours per day or 40 hours per week,” Greenhouse says. Using a payroll processing company will help keep track of everything including taxes withheld, vacation time, and more, needed to pay your nanny.
When it comes to your nanny’s schedule, Greenhouse says that it “varies greatly depending on the family and their needs.”
For example, if you work nights and sleep while your kids are at school, having a nanny who is scheduled to work overnight and take your child to school in the mornings might work well for you. It truly will vary based on the needs of everyone involved.
At their agency, Greenhouse says they have seen it all. “We have nannies who work a more standard Monday through Friday 8 a.m. to 6 p.m. schedule, and we have nannies who work weekends, evenings, and/or early mornings.”
“When a family hires a caregiver to work in their home — whether they’re hiring a full-time nanny, a part-time babysitter, a housekeeper, personal assistant, or even a dog walker — anyone who is working or performing duties within their home, if they’re paying that caregiver more than $2,200 in a calendar year, the IRS considers them a household employer,” MacCleery tells Romper. “That brings with it certain tax obligations for the families which can be complicated.”
Taxes will generally be withheld by the payroll company processing your nanny’s pay, so as long as you use a reputable one, they should be able to properly advise how best to handle taxes. Nanny tax requirements vary by state, but generally speaking when you pay a nanny legally, it grants them access to benefits such as social security, unemployment insurance, and disability insurance.
MacCleery tells Romper that workers’ compensation insurance coverage for nannies “is required in about half of the states and highly encouraged in all.
“Families take on additional liability by having someone work in their home, and a workers’ compensation insurance policy is the best way to protect them financially and legally should an accident occur,” MacCleery says.
Additionally, some nanny agencies, such as The Nanny Authority, require employers to provide health insurance for their hires. Many times, the same payroll company who processes your nanny’s pay can help get workers’ compensation insurance set up for you and recommend a broker to work with you on setting up health insurance.
Like any employer, you will likely have a list of responsibilities you expect your nanny to manage. This should be communicated in writing at the outset of employment so that everyone is on the same page.
“We strongly encourage a written terms of employment offer letter be created, so that both nanny and family are in agreement with expected duties,” Greenhouse tells Romper.
Just like with jobs in other industries, these duties can be negotiated just like a pay rate or time off, but should be addressed up front to manage expectations and avoid potential conflict later on.
“Nannies absolutely deserve time off for their hard work, whether it’s paid holidays or sick time, and should definitely be communicated when outlining the nanny contract,” MacCleery tells Romper. “In general, nannies typically receive two weeks of vacation time, but it is up to the family’s discretion.”
As far as how that time is structured, Greenhouse says, “The industry standard is two weeks of paid vacation (one week of the nanny’s choice and one week of the employer’s choice), two to three sick days, two to three personal days, and federal holidays.”
Just like with a standard 9 to 5 job you might work at an office, knowing how holidays are handled with your nanny can help everyone stay on the same page.
“Generally, all major holidays are given off with pay; however, many families require their nannies to work on holidays, for which they are given equal time off and/or an additional day’s pay,” Greenhouse tells Romper.
However, some agencies and specific employers (aka you, the parent) handle holidays differently. “Most nannies receive paid time off (PTO) for all federal holidays,” Thomason tells Romper. “If they are required to work a specific holiday, they are to be compensated double time.”
“Nanny contracts should be extremely thorough and include everything from the duties and expectations of the job, number of hours per week and schedule, PTO, details of a health insurance stipend if offered (typically, families contribute to the candidate’s monthly premium or cover it in full), and any other benefits and/or incentives,” Thomason tells Romper.
Basically, anything and everything your nanny needs to know about their job should be included. This will help both the employer and employee know what is expected.
“The employer should also supply their hire (nanny) with a household binder/pamphlet that includes all info on the children, emergency contacts and medical information,” Thomason adds.