When looking for a nanny, it may be a good idea to think about any additional compensation and benefits for your nanny. Be prepared to discuss these topics with your nanny when you make her an offer:
- Overtime: Overtime refers to any hours beyond what you and your nanny agree will be standard for her salary. Under the Fair Labor Standards Act, Live-Out nannies who charge an hourly rate are entitled to an overtime rate of time and a half. Some nannies will ask for higher rates on weekends, holidays, and travel.
- Bonuses: Most nannies, both full and part-time, will expect to receive an annual bonus of 1-2 weeks’ pay. It is up to you to decide now how much you will pay and when you will pay it. As the employer, you can present it to the nanny as a part of your offer.
- Health insurance: Providing health insurance is not standard, but it may be required for some nannies hired through high-end agencies. Health insurance is expensive, so I usually recommend that parents keep it in their back pocket and only use it to sweeten the deal if negotiations get tough. In some cases the family will choose and pay for a new policy; in other circumstances, families will pay the nanny an annual or monthly stipend to cover all or part of the premium cost of a plan that she selects.
- Vacation Days: Nannies typically get the standard Big Six: New Year’s Day, Memorial Day, July 4th, Labor Day, Thanksgiving, and Christmas. Anything in addition to these six will need to be a part of your negotiation. Be sure to discuss exactly which holidays she gets up front so there is no confusion later on.
- PTO: Standard vacation is 1-2 weeks with pay. Parents usually stipulate that they get to choose one week—often chosen to coincide with a family vacation so they don’t need to pay for extra childcare coverage—and the nanny gets to choose the other one. If you have a flexible schedule, you can offer more in exchange for a lower weekly rate, or as a perk if the nanny is choosing between offers.
- Sick Days and Personal Days: Parents usually group these together and offer 3-5 per year, to be used as the nanny needs them. When it comes to sick days, however, I recommend a more flexible policy if you can manage it. It is never a good idea to have your nanny come into work and share her illness with others. Instead of designating a number of days, try saying “as many days as necessary, with approval.”
- Taxes: I strongly suggest contacting your tax advisor or a nanny tax professional (firms like 4nannytaxes.com) that can provide a nanny tax calculator, nanny payroll services, and give you advice on properly paying nanny taxes according to the applicable federal and state rules.