Contract with Nanny

Parent Q&A

  • Is it common for nannies to increase their rate mid-agreement?

    (14 replies)

    Hello!  We have an amazing nanny whom we adore and our baby adores.  We have been working with her for 6 months in Oakland in a share with another family.  Our nanny just informed us that she plans to increase our rate from $13 per family to $15 per family when she returns from her vacation (paid time off) in a week.  We signed a year agreement at the $13 per rate and we have done everything we agreed to in the agreement.  I pointed this out to her, and she said it's not uncommon to increase the rate after 3-6 months.  We're new parents and thus new to this whole world, but we are scratching our heads on this one.  We know these agreements aren't legally binding, yet it seems like this is a significant deviation from our good-faith agreement.  We'd be completely fine with the rate increase if we renewed our agreement after our one year concludes.  Is $13 way under for an Oakland nanny-share?  Any advice on how to handle this one?  Thank you!

    In my opinion this is not normal. You signed a one year contract at a set rate, so that is what you committed to and also expect to pay. If she had planned to increase the rate she should have said so upfront and have if included in the contract. It is also not normal in my opinion to want to increase a rate by 2 dollars, thats a hefty one. We started at $12 and increased to $13 after one year. I think the average is somewhere between $12.50 and $16 per hour, BPN does an annual survey, you should be able to find the results here. I also find her communication around this strange from the way you describe it. She can't just say "when I am back, its going to be this." If you don't agree she will leave? Or what is she implying here? I would try to talk to her, understand where she is coming from, if she needs some extra support maybe. Nannies also talk, and if she feels that others are getting paid more than she is, maybe she felt she negotiated badly and now feels she wants to increase her rate. So I would try to understand her reasons and then decide if you feel you would like to increase it a bit or not. I feel any increase over $0.50 to $1 an hour would be too much after 6 months. You can be sure she will bring it up again after the year ends, so keep in mind what you are ultimately able or willing to pay per hour.

    Nowadays, $13 is too low for a nanny-share.  When I was doing this work 10 years ago, I was getting $18 an hour in CASH at the end of each week.  Being a nanny is hard, lonely, and often boring work, even for the best of us.  Please support your nanny as you would wish to be treated.  Many work without benefit of health insurance, and the meager earnings are quickly eaten up by steep Bay area rental fees.  IMHO, this is no place to be stingy.

    It’s not uncommon and you have to consider the cost of living in this area.

    I find  $15 very reasonable ( if thats under the table)  for a share and if you’d like this nanny I would agree to the raise but  maybe make an agreement that you will not raise her wage again  for at least another 12 months and at that time it will be a review situation . 

    I think you’re right to be annoyed with your nanny. If she wanted a raise after six months she should have asked to include that in the agreement when you originally negotiated it. I mean, technically your agreement IS enforceable, but you have to consider that it’s probably not worth your time or damage to the relationship to take that stance. So that leaves you with a couple options: (1) tell your nanny you’re not giving her a raise until the agreement term ends, and risk her quitting and you having to find another nanny (because it’s  unlikely you’re going to sue her for breach of contract), or (2) pay her what she wants or see if she’ll agree to $14/hour. 

    I faced a similar situation with a nanny and I honestly think nannies realize it’s a lot of work to find a replacement nanny and figure they have all the leverage. It’s pretty shady but there are downsides to every type of childcare. 

    Hi, sorry to hear about the old nanny-switcheroo!  I'm not a nanny, but I have used them, and I actually am a contract lawyer (but not an employment lawyer), so I wonder why you would think the agreement is not legally binding?  From a contract law perspective, if you both understood the deal terms and agreed to them, it should be binding except to the extent that it would be considered unenforceable under law -- e.g., I think you can't enforce an agreement to work for a specified term if the employee wants to quit because of the 19th Amendment (no indentured servitude allowed) and stuff like that.  Demanding a higher wage than you initially agreed to is not the same thign as requesting a raise.  Some humans (including some nannies) are manipulative.  If you adore her and trust her and can afford it, you could consider giving her a raise, but you are definitely entitled to say "no."  If she quits, she quits.  Just my 2 cents.

    In general, a written employment agreement is legally binding as long as it doesn't contain illegal provisions. So it really doesn't matter what's "common"; if she agreed to a certain wage for a one-year term, then she can't unilaterally raise her rates! (Wouldn't we all love to be able to go to our boss and say, "I'm raising my salary effective next week"?!)  However, if you don't agree to the raise, what happens?  Is she likely to quit?  How much of a problem would that be for you (and for your share family)? Does the agreement you signed say anything about what happens in the event that one party wants out, or if one party violates the agreement? It's almost certainly not worth the hassle and expense of suing her for breach of contract (though you *could* if she quit, your energy presumably would be better directed toward finding replacement childcare!), and given that you like the nanny otherwise, you may be best off by negotiating a raise and keeping her working.  But I don't think it's unusual for a nanny's wages to stay the same for a full year at the same job -- we gave ours a raise approximately annually -- and I personally would not be willing to simply pay whatever she demands.  I'd treat her "informing" you of an increase as her *request* for a raise, and negotiate. (Just as your boss might do if you asked for a raise, and offered a good rationale for why it's deserved.)  And then create a written amendment to your existing written agreement that specifies whatever deal you make.

    Hi,  I was paying 15/kid with a two or three kid nanny share ten years ago.

    We did an annual increase. We went from $12-13. I thought a full dollar was steep (inflation would have been about $12.25) but we liked her and we're also new parents. $15 is high. We're still at $13 and when a new family takes over in Sept. they might be at $14. Hope it works out for you. 

    I’m curious to see what others will say, but this does seem pretty unusual and I would not be ok with it. For starters, as far as I know, $13 per family is already a good rate for her. And usually, after the initial rate is decided upon, the families decide what increase, if any, should be given after a year or longer. Interesting how she feels she can give herself a $4 per hour raise after just 6 months! That is a bold move. What does the other family think? 

    I was a professional nanny for many years, I have never heard of someone expecting a raise after 3-6 months. I typically negotiated for a raise after at least a year or with the addition of another child.

    I never would have agreed on a rate with the intention of requesting a significant increase a few months, it’s unfair to the parents and to the children that have already started bonding with the nanny. 

    Since $15/hr per family is closer to industry standard for nanny share costs in this area, perhaps your nanny regrets signing the agreement for less. For the sake of retaining her and maintaining your relationship, I would offer to amend the agreement at $14/hr per family for the rest of the contracted time. After the year is completed, you can all look at signing a new agreement at $15/hr per family. 

    No, it's not at all common to increase the rate a few months into the contract--I've never heard of anyone doing that! And $12-13 per family is the going rate for a two-child nannyshare in Oakland, so $15 per family would be quite high. That would typically be pay for a very experienced nanny or one who has been with a family for many years, and had raises over that time. (It is common to do a $1-$2/hour raise at the one-year anniversary.) You're in a tough spot given that you otherwise like the nanny, but I'd hold the line on this--talk to the other family so that you have a united front. Assuming they agree, I'd then say, "We've agreed to $13 per family for this contract year and unfortunately aren't in a position to raise the rate at this time. We're happy to discuss a raise at the one-year mark." And then be prepared for the possibility that you may need to walk away. If you agree, you're likely setting yourself up for problems in the months to come. I could see being flexible on this if you were paying below market and didn't have a contract, but neither is the case here. The point of a contract is to avoid problems like this. (In the same vein, you can't show up one day and tell the nanny you can now only afford $10 an hour.) Good luck--sorry you are dealing with this!

     Nine years ago I paid $20 for my half of nannyshare; I think $15 is reasonable for this area. I do find it odd that nanny is dictating price. I chose to pay generous higher price because I was once a nanny myself! I made $20 an hour plus a cottage and use of vehicle  25 years ago! I pay a 15 year old $20 an hour to watch my 9 year old now! 

    Thank you all for your thoughtful replies.  The other family is on the same page with us.  We also felt she had leverage to drop this on us since we love her so much and it IS hard to find someone you love and trust to care for your child.  When she came back from vacation, I told her the issue was unresolved and that we weren't just going to raise her rate $2 per family because she demanded it, and we needed to sit down and talk with her and the other family.  Btw, I didn't mention in my initial post that we also pay her time and a half for any time she works over 40 hours per week, which is 5 hours of OT every week, so she's effectively making $27.44 per hour or $13.72 per family already, per our contract.  We have no problem with this, as that is what we agreed, but that makes her effective rate already close to $28 hour.  One parent from the other family and I laid all this out to her, including sharing my due diligence about rates in our neighborhood- of which the rate we are currently paying her is right in the middle- and she still came back with wanting $1 more and gave various other reasons which really had no bearing (in our opinion) about the terms we agreed to in the contract.  We ultimately agreed to $1 increase for our family just to keep the peace, but due to the other family's constraints, we agreed to this increase only if she didn't raise their rates.  We let her know that at the end of the contract term would be the time to raise her rates and she could consider this her notification to both families now.  So, it seems we have reached a conclusion.  Thanks for your help.

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  • Nanny Share contract

    (1 reply)

    Does anyone have an existing written contract for a nanny-share? Something that stipulates pay rate, holidays, sick leave, etc.? Would love to start with a template instead of from scratch.

    Thanks!

    David

    RE: Nanny Share contract ()

    Hand in Hand (Domestic Employers Network) has these sample contracts: http://domesticemployers.org/sample-work-agreements/ Check out their website--they are a great resource. This is what we started with when we drew up a nanny share contract a few years ago and it worked very well. We treated it as a discussion with the nanny and it helped clarify several things before they had a chance to become misunderstandings. We'll be using it again soon for our second child's nanny share. Good luck!

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Archived Q&A and Reviews


Questions

Contract with nanny when I'm paying under the table?

Jan 2015

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.


Do you have a nanny contract you can share?

April 2007

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


Verbal agreement vs. written contract with nanny

June 2003

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