Families with two working parents have a variety of childcare options they might consider. Many opt for a traditional daycare facility, which usually incorporates education and play in an institutional setting with trained teachers. Alternatively, parents might drop their kids off with a fellow parent or licensed provider who offers childcare out of their home. A third option is hiring a nanny to care for their children inside the family home.
Benefits of Hiring a Nanny
When you consider hiring a nanny as opposed to alternative childcare options, there are many benefits.
- Large family needs. When we found out we were expecting our fourth baby, the family friend who had been watching our other three kids in her home decided to pursue a different career path. Between my husband and I, we had two-and-a-half and later three full days off during the week, but we still needed to explore options for the other two days.
At the time I went back to work, our eldest daughter needed to be transported to and from a full day of first grade, while our son was in a half-day of preschool three days per week. Meanwhile, we had a toddler and baby at home who napped and had needs of their own. Considering the number of kids and their various needs, we decided having a nanny come to our home was the best option for us.
- Being in their own home. When you hire a nanny, your kids do not have to get used to a new setting on top of a new caregiver. They can have naps in their own beds, in a quiet environment. They will also likely be exposed to fewer germs because there will not be other kids (besides siblings) being cared for in the same space.
- Saving time. When a nanny comes to your home, you no longer have to factor in daycare drop-off and pick-up into your day. You don’t even have to get young kids fed or dressed for the day before you leave for work! This effectively gives you more time with your children and allows you a little more time to leave home or work.
- Easy access to the kids’ stuff. Hiring a nanny saves you from having to pack a daycare bag, meals or snacks, or bottles for your kids. Whatever your kids need during the day is easily accessible to them, from a change of clothes to their favorite books and toys.
- Daytime activities. One thing that was really convenient about having a nanny was that we did not have to sacrifice enrolling our kids in daytime activities. Our nanny drove our kids to and from Vacation Bible School one week, and to my son’s engineering camp another week.
- Having someone at the house. It can be nice to have someone at the house during the day when you are not there. If you want a load of laundry switched over, the nanny may be willing to do that. She may be able to accept packages, pop your pre-made dinner in the oven, or turn off the curling iron you realized you left on in the bathroom.
- Personalized attention. Perhaps one of the greatest benefits of hiring a nanny is the personalized attention your kids will receive. No other kids will be competing for the nanny’s attention, as they would if your kids were in a daycare setting or even in another mom’s home who has her own kids to take care of. Additionally, nannies often prepare enriching activities for the kids, which can be tailored to their interests.
Mistakes Families Make when Hiring a Nanny
Even though hiring a nanny has many benefits, it may be more complicated than you initially imagine. Make sure you are prepared for every aspect of hiring a nanny, and avoid these common mistakes.
Mistake #1 Not Having a Nanny Contract
When you enter into an employment agreement with the nanny, have a contract to make sure that everyone is on the same page. Among other things, your contract should:
- map out your nanny’s responsibilities,
- address sick or vacation time policies,
- document rate of pay and expected hours, and
- outline the termination policy.
Both the family and the nanny should agree to the terms, sign the contract, and keep a copy on file. You will want to review the contract on a regular or as-needed basis.
Be sure that your expectations for the nanny are both spelled out and fair. For example, consider being clear about what happens if one-off schedule changes arise, and how you will reimburse or pay for any agreed-upon craft supplies or outings.
We used this sample nanny contract as a starting point.
Mistake #2: Not realizing your nanny is considered a household employee.
Some people mistakenly believe nannies are independent contractors. In fact, they are considered household employees. They work in your home on your terms, rather than their own. When you hire a nanny, your household becomes a place of business, so you will need to register for an Employer Identification Number. You will also be liable to follow laws regarding household employees, such as minimum hourly wage laws, overtime laws, and tax laws.
Mistake #3: Underestimating the cost of hiring a nanny.
Hiring a nanny may be far more expensive than you think. You may either be underestimating the average hourly rate of a nanny or you may not be aware of the additional costs that go into hiring a household employee.
- Know what to expect to pay a nanny per hour. The hourly cost of a nanny may be affected by the area you live in, the nanny’s experience and education, the number of children needing care, and the number of hours of work you are offering.
Lindsay, a career nanny of ten years, says you get what you pay for. “Nannies with a lot of experience and glowing letters of recommendation come at a higher price than those new to the industry,” she explains. “That’s not a poor reflection on new nannies, but like any industry, experience garners a higher rate of pay.”
Most nannies will be able to quote their rates for you, and there is sometimes room for negotiation, especially if the family seems like an exceptional fit or there are other fringe benefits to consider.
- You are responsible for paying nanny taxes. If you are paying your nanny more than $2,200 in a calendar year or $1,000 in a quarter, you are legally responsible for paying “the nanny tax.” You are required to pay Social Security and Medicare taxes, along with an unemployment compensation tax. You are also required to send W-2 forms to your nanny so she can file her taxes. Taxes added roughly 10% to our hourly rate for our nanny here in Ohio.
- You may need to take out a Workers’ Compensation policy (and regardless, it’s a good idea). Since the nanny is considered a household employee, and you are the employer, you may be held financially responsible if the nanny should suffer an injury on your property. For that reason, you may need to pay for a workers’ compensation policy, which adds an additional cost to hiring a nanny.
- Extra duties may cost more. I have found some nannies who incorporate some basic household duties into their rate of pay. However, this should not be expected. Lindsay warns, “Most nannies come into an interview with a base rate of what they charge for childcare only. Having additional tasks such as housework or laundry is fine to request, but it will cost more.”
Mistake #4: Paying under the table.
Paying your nanny under the table is actually against the law, and it’s also not in your nanny’s best interest. Even though the nanny might feel she is “winning” by being paid under the table because she takes home more in her weekly paychecks, it is ultimately a detriment to her. She will miss out on the Medicare and Social Security taxes you should be paying in as her employer. In addition, the nanny will not have documented work history if she needs to collect unemployment after your contract ends. Read more about what can happen if you don’t put your nanny on the books.
It can be complicated to take care of paying and reporting taxes, so you may want to get set up with a payroll company. We had a great experience using SurePayroll.com. The monthly cost of using a payroll company should also be factored in when you put together your nanny budget.
Mistake #5: Neglecting a background check and references.
After interviewing a nanny you feel good about, you may be excited to hire her on the spot. However, a background check and conversations with past employers will help you get a more complete picture of who she is as a person and may uncover some problem areas. Janice Kosidin from Today’s Parenting Team provides a complete explanation of how to check your nanny’s background. Be sure to contact as many references as possible. I once had one nanny reference come back glowing, but a second reference uncovered areas of concern.
Mistake #6: Not thinking through the vehicle situation.
If the nanny will be transporting your kids to and from school, activities, or outings, be sure there are enough vehicles to go around. If you are driving one vehicle to work and your spouse is driving the other, is the nanny able to fit your children into her own car and willing to use it? If she is, check to see whether her vehicle is safe and reliable. You would also then most likely be expected to pay for mileage.
In our care, with four children, we provided a minivan for the nanny to use. That car payment and insurance were, of course, another expense related to hiring a nanny.
Mistake #7: Skipping the trial run.
Before the first day, you can bring the nanny in for a trial run while you are home. Julianna, a career nanny of over twenty years, shares, “I think one mistake families and nannies make during the hiring process is not doing a trial run before committing to a contract. It can be such a great opportunity for everyone to get acquainted with each other. It allows the nanny to be able to observe the routine and family dynamic (and also ask questions) so they may better find their place among your family. Parents have a chance to observe the interaction between nanny and children to make sure they mesh well. It also just makes everyone feel more comfortable on that ‘first day.’”
Mistake #8: Not fully considering the implications of someone working in your home.
When we brought our kids to someone else’s home for childcare, it was a pain to pack them up and transport them, but we also did not have to worry about the state of our own home. We are not naturally good at keeping our home super clean. Having an employee at the house put extra pressure on to be sure the house was picked up and in a suitable state for her.
Aside from the housekeeping, there is a certain level of intimacy that comes from having someone in your home without you there. As a foundation for that intimacy, there must be trust. Your nanny may see the bills you left out or the dirty laundry on the floor or get to know your neighbors from chatting in the backyard. Hiring a nanny is, in many ways, like adding a new member to the family.
There is also, at least in the beginning, the necessity of helping the nanny learn all the ins and outs of running the home. From the thermostat to the location of your plates and bowls to the garage code, there is a lot for a nanny to learn.
Mistake #9: Overlooking the importance of setting boundaries early.
If you become too close with the nanny, or if you hire someone you already have a personal relationship with, you run the risk of allowing your personal relationship to impact the work. If you and the nanny are too close, it may be difficult to address any concerns you have with her performance. Additionally, you or the nanny may end up inadvertently taking advantage of one another because of your friendship.
One mom shared with me that her nanny would chat about difficult times she was going through in her personal life and then ask for excessive time off, assuming the mom would understand. While there is a lot of intimacy in a nanny-family relationship, it is ultimately a business relationship. Treating the nanny as an employee and being mindful of boundaries from the beginning may help curb these issues.
Mistake #10: Ignoring your gut.
When hiring a nanny, she may look wonderful on paper and perhaps even have a good trial run, but you may still feel that something is “off.” Hiring a nanny is a huge decision that impacts you, the nanny, and your kids. If something does not feel right, trust your gut. It may be better in the long run to take more time to find someone you are sure about than to give it a try with someone who gives you pause. Also, be sure both you and your spouse are on the same page about the nanny. If one person feels good about the nanny and the other doesn’t, it may cause a rift in the whole dynamic.
Mistake #11: Forgetting about backup care.
While the personal attention a nanny provides is great, you are still relying on only one person. When she is sick or injured or out of town, who will take care of your children? We did not have a reliable backup option for our kids, so there were many days that we had to call off work to stay home. Additionally, a nanny is less of a surefire long-term solution than an established daycare because she may move or decide to pursue a different job or career path altogether.
This lack of reliability is ultimately what led to me quitting my job to become a stay-at-home mom for my kids. We went from a nanny who was out long-term with an injury and then quit after a short return, to a college student who became unable to balance the job with her other obligations, to a nanny who called off sick her first three work days. Eventually, we were just fed up with not knowing whether we would have childcare or would have to let our employers down yet again. It no longer seemed worth the stress for the little bit of income I was netting from my job. If we had established a consistent backup option, perhaps we would have been able to find a more stable situation, and I might have continued working outside the home.
Mistake #12: Not selling yourself during the interview process!
When you are engaged in interviewing nanny candidates, remember it is a two-way street. The most qualified and exciting candidates may have multiple prospective families to join. Rachael, a career nanny of 32 years, says, “Parents need to sell themselves too. Why do I want to work for you? What makes you a good boss? What are the perks?” Make sure you paint a clear picture of the benefits of working for your family when you find a good fit.
For plenty of people, having a nanny is an amazing experience for them and for their kids. If you avoid these twelve mistakes, hopefully you will find the nanny that is just right for your family and get off to a strong start on your journey together.
I have taken these mistakes and flipped them into a free one-page checklist you can download and use during your nanny hiring process.
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