Contract with Nanny
Archived Q&A and Reviews
- Contract with nanny when I'm paying under the table?
- Do you have a nanny contract you can share?
- Verbal agreement vs. written contract with nanny
I hired a nanny, and she wants to be paid under the table. I'd like to have a contract in place with her so we both have a clear understanding of things like vacation days, housework we expect her to perform, notice to be given if we decide to part ways, etc.. Obviously, the rate of pay is something that's normally included in this type of contract. My question is: if one part of the contract (i.e. the pay, and the fact that it will be silent on the issue of taxes) is ''illegal,'' is the remainder of the contract legally binding?
On a related note, do the different branches of the IRS seem to talk to each other? In other words, if I enrol in the dependent daycare flexible spending account but don't declare my nanny's taxes, will the IRS figure it out or am I OK unless I'm generally audited? Has this ever happened to anyone? Thanks! Anon
I always saw our contract with our nanny as an agreement between the two of us, as much for her benefit as ours. I cannot imagine ever going to court over it. I think if it ever really came to that (and probably long before it did), most of us would just hire someone new. So I guess my question to you would be, why are you concerned that it be legally binding? Would you really go to court? Personally, I think it would be risky to use a Dependent Savings Account. I always figured not being able to use that benefit was a balance to not having to pay taxes and social security. But I think that is a matter of personal comfort with risk levels. Anon
No, you cannot pick and choose which parts of the law you would like to follow, and you cannot hold others to a legal standard that you would like to duck yourself. Pay your nanny a fair, honest, and legal wage. And pay your taxes. Shannon
Including rates of pay in your contract is not illegal, as the contract lays out the terms between you and the nanny, and paying her for her services is not illegal. What is against the law is not following the tax laws, which is between you and the IRS. I don't know about how the IRS detects fraud, but I do know that you cannot claim under a dependent care account unless you provide the taxpayer ID number of the daycare provider or, in your case, the social security number of the nanny. For this reason, you can't use benefit from the tax breaks provided by the account unless you pay your nanny over the table. A former nanny employer
As most people have replied to pay taxes, but realistically many do not because they cannot afford it. A contract is great for both sides and sets the formate for the job. Be clear and be far and hopefully you will find the same in return. A Simple thank you and acknolgements will go a long way. Holiday bonus and days off when needed should be aloud. Remember that this is there job and you should treat them well as this is your children that they are watching. The one thing I would do is make sure that they are a legal citizen. Good luck MOM
As others have pointed out, you only get to pick one -- you can either use your FSA to pay your nanny out of pre-tax money OR you can pay your nanny under the table. You can't do both. However I'd like to point out that for the first $5000 you pay your nanny from FSA money, the tax savings from using your FSA might cover the cost of employment taxes. So it's win-win to do the former -- your out of pocket costs are the same and she gets the benefits of paying into social security, SDI, etc. After $5000/year it's more expensive to pay over the table with taxes, but it's still the right thing to do. We've done both and I much preferred to do it above board. And I definitely found Intuit's household payroll service to be well worth it.
Anyone have a nanny contract they would be willing to share or know of a template available? I'm looking for something that explicitly talks about sick time, vacation, supplement for driving to work, etc. I also wondered what the current rates are for one-child (in the Oakland Hills) and what the law is concerning when to pay taxes, social security, etc. Our nanny will not be full-time, but at what point (how many hours) are benefits mandatory? Want to be fair to nanny
Nolo Press (www.nolo.com) has a terrific book called Parent Savvy. It's about the legal and practical aspects of raising children, and a good chunk of it is devoted to child care. It has a nanny contract template that you can use, and it also has a thorough explanation of all the clauses. I think it will help you. Good luck! Been There
I am a long-time nanny and think it is great that you are interested in having a work agreement with your nanny. I would suggest that you go the International Nanny Association website and read/purchase publications through their organization. The web address is: nanny.org/families.htm This will get you to the page where you can read ''Frequently asked payroll and tax questions'' and can purchase their ''Family and Nanny Agreement'' or get it with a packet of publications. The INA is a professional non-profit, designed to provide information to nannies, families, and agencies. Good-luck to you. Cindy
What experience do people have with verbal agreements versus written contracts with their nannies, either alone or in a share arrangement? What about when another person joins an existing family or group with a nanny? I was in a share arrangement with a family who had a nanny, but no written contract and, apparently, no clear verbal agreements about things either. Unfortunately, this ended up reflecting poorly on us when the nanny misunderstood the agreement, such as it was, and we ended up looking like we wanted too much detail. I'd like to avoid this problem on the next round. Do you find that it's better to put things in writing, or not? What things are essential to agree on, whether in writing or not? Does it end up being more trouble than it's worth? What if you and the other family have a slightly different idea? anon
We had a contract for a nanny share that we had for one year (just ended). The contract was nice to have since there were so many parties involved. It forced us to think of things like job duties, vacation time, flex time, overtime, sick policies, etc. before there were controversies. It certainly made negotiations easier when someone had a problem. I found a template on www.babycenter.com that was easy to work with. Good luck. Maria
I am in a nanny-share situation and we have always used a contract (which we essentially inherited from the family originally using the nanny when we joined). I think it makes sense to have a contract b/c it clearly spells out what is expected by all parties and also protects all parties. Not only is this a business arrangement (in which written agreements are the norm), but you are also dealing with the well-being of your child. For these reasons, I think you are wise to make sure everything is clear and agreed-upon up front (e.g. hours/days of care, duration of contract, other duties, requirements such as attending a refresher infant CPR class, vacation days/policy, sick days/policy for both nanny and children, etc.) Lisa
Absolutely get things in writing. Essentials include spelling out duties (just childcare or cleaning too, and what defines each?), hours, holidays, vacation, sick - what's paid, what isn't. Get as specific as you want to be - it's your child. Would you work for someone without having things in writing? Would you rent property, have your car worked on or make a plane reservation without having things in writing?
If you and the other family have different expectations, the time to figure that out and negotiate is BEFORE you hire anyone. It's a delicate balance of so many factors, so it is so crucial to have open communication and make sure everyone is happy for the sake of the children!
You really don't want to end up in a situation that puts a feeling of dread/anxiety/anger in your stomach every day your child is with the nanny!!
If you have any kind of trouble sorting out a childcare situation, call Bananas - they can help with all sorts of advice, hand-outs, seminars, etc. even if it's under the table. Learned the Hard Way
Put *everything* in writing in a ''contract.'' It is more than worth the time and effort to do this and all involved should sign: you, the nanny, the family you share with. Write it down, discuss it in person and, especially if the nanny speaks English as a second language, let her take it home with her (or him), too. This will assure that everyone is ''on the same page.'' Much of the postings on this newsletter seeking advice about how to handle problems involving nannies almost always has to do with a misunderstanding at the very beginning when needs and expectations for both sides were supposed to have been clarified and discussed (and written down!), but were not. This does not need to be a really formal thing. Just write things down on paper and have everyone sign.
Things to consider: vacation and sick time allotments and how requested, payment issues (rate, hours, days, overtime, how changes in schedule will be handled), expectation of duties (childcare only, childcare + food prep for baby + baby's laundry, or more; be absolutely as explicit and specific as possible on this one, or you may regret it.) If sharing with another family, all this should be written out and agreed upon for both families as well as the nanny. If the other family doesn't want to do it, and you discuss with them how important this is and they still refuse, I would take this as a sign of incompatibility and find another family. kb
Always have a contract and put in there whatever you need. We have a very basic one that outlines all the payment and vacation etc issues, but in terms of baby care it just says 'keep the baby safe, fed and happy'. We are okay with that because our baby has never been on any schedule, and has been just that: safe, fed and happy. However, we just stopped a share where the parents (who entered it without any contract at all) quickly became dissatisfied with the nanny, because she was using her own judgement rather than following exact guidelines. They got upset over things such as the baby would feed at 3pm instead of 1pm (for whatever reason), and were worried about enough playtime of a certain kind, etc. My advise is, if it is important to you to have strict rules and guidelines, put that in the contract as well (i.e. refer to separate guidelines if needed). But also remember that the nanny will require a bit of flexibility since the baby is not a clock. And be aware of any tendencies to micromanage. And most of all, treat your caregiver with respect -- it's not appropriate to yell at anyone because they didn't manage to read your mind... Addressing minor issues courteously should not make anyone look bad! If your nanny situation can't meet your needs, find another one. There's many out there. been on the other side
The BANANAS website has almost all of their handouts available online in PDF format. Go to their home page, www.bananasinc.org and click on ''resources,'' then ''download handouts,'' then ''in- home child care'' and you will find their sample agreement for parents and in-home caregivers. The other handouts about in-home child care may give you more ideas about what to include in the agreement.
Of course, you can also get the handouts from the BANANAS office, as well as a few others that aren't available online, like a set of instructions on dialing 911 for limited English speaking caregivers. Jennifer