Hiring A Nanny

by Ms. S on December 8, 2009

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Please note that this section contains my personal notes from my readings on this topic.

Employment laws may vary by state so please consult with your own experts. However, in case it’s helpful, my list of what to do is below.

  1. Outsource the tax filing. Breedlove Associates has been incredibly helpful and affordable.
  2. Get worker’s compensation insurance. Relatively speaking, it’s not too much money and it protects you in the scenario that the nanny or someone else working in your home gets injured. We were told that homeowner’s insurance should cover this but ours did not. So we purchased worker’s comp insurance through the New York State Insurance Fund.
  3. Get disability insurance, which can also be purchased through the New York State Insurance Fund.
  4. An employment agreement would be ideal, which communicates a mutual understanding of terms. We will be uploading a rough draft of an employment agreement shortly. In the interim, there are four key areas that the employment agreement should cover:
    1. How the nanny will be paid: hourly rate, # hours, and overtime rate. Minimum wage in NYS is $7.35 per hour.
    2. List benefits. It’s awkward to later address things like paid sick days, paid vacation days, etc. Please see below for what we’ve learned about market terms.
    3. Employee at will, which means that you can fire the employee at any time and the nanny can quit at any time.
    4. Confidentiality. There should be language that states that the nanny should not be sharing personal information about the family and should not contact ex-employees. You can expand this as is relevant to you.
  5. Health insurance. Providing it can actually be kind of affordable. With the help of Breedlove, we set up a sole proprietorship for the home and that helped us to access more group health insurance plans. Any contribution the employer makes to the employee’s health plan is not taxed, so this is like a legal cash comp since both employer and employee taxes are not incurred. If you’re interested, you should look into it further with the appropriate expert(s). A friend informed me of a family that had employed a housekeeper for decades, off the books. The housekeeper later got cancer and her family sued the employer / family. The housekeeper’s family won about $90,000. We were already in the process of providing our nanny with health insurance when I heard that story, but that story just further reinforced that the hassle and cost of providing health insurance in the short-term would be worthwhile for us in the long-term.
  6. A policy that we have adopted is to require a copy of photo ID and to do a background check on anyone who works in our home. We’ve been through too many nannies and I’ve realized that I can’t have peace of mind unless those two basic things have been completed. A surprising number of moms don’t think to do it. It’s awkward, but much less so if you state that requirement upfront and let it be known that it’s just a policy of the home.
  7. Market Compensation: it has been really hard to get a good sense of market rates and benefits because there is tremendous diversity. Below is a summary of what we’ve personally heard from friends on general market terms. Please note that this “due diligence” was collected before the economy started quickly deteriorating at the end of 2008. We were hearing from nanny agencies and others that market rates were changing with the economy.
  • Salary for Full-Time Nanny: In 2008, the general range seemed to be $500-$800 per week and weekly hours seem to range from 40 – 60 hours per week. Salaries are higher for college educated and other things, so $500-$800 is just a generalization. On April 7, 2009, I heard from a friend that $550-$600 per week for 55 – 60 hours is the market rate for an American nanny.
  • Health Insurance is not commonly provided. So you can offer it as a tool to hire and retain. Usually, the nanny contributes to the cost of it, and the family contributes increasingly more over time.
  • Major holidays: New Year’s day, Christmas day, Thanksgiving day, July 4th, Memorial Day and Labor Day.
  • Vacation is generally two weeks after 1 year of employment, and one of the two weeks may be of the family’s choice (when family is on vacation) and then the second week is nanny’s choice.
  • Sick days are usually paid. Usually, families seemed not to have a policy of limiting the number of paid sick days per year, but it’s a good idea to specify. You can always be lenient about your policy and pay for more on an ad hoc basis .

INTERVIEWS/REFERENCE CHECKS

From NYMetroParents website:

This is one of the most important stages of securing childcare. Parents must ask questions to make sure that the person who will be in charge of their child on a daily basis is someone who is of good character, as well as mentally and emotionally stable. Kathleen Webb, managing partner of 4nannies.com, suggests avoiding yes and no questions. “Ask lots of open-ended questions,” she says. “Instead of ‘How many years of experience have you had?’, try ‘Tell me a little about your experience.’” Carol Solomon of New York Nanny Center recommends asking about the nanny’s family background, how she was raised, and if she’d raise her children the same way. Reference checks are an absolute must and can done through agencies. Websites such as 4nannies.com can also help you order reference checks, and criminal record checks as well. Solomon says of her agency: “We use a check and balance system to make sure that the reference dates and ages coincide with the dates and ages the applicant has given us. We emphasize that this is a childcare position and that we need the person to be as open with us as they possibly can be.”

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