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Nanny Industry Information

Finding and Hiring a Nanny

If you are a new parent or a soon-to-be parent you may be thinking about when it comes time to return to work what childcare options will best suit your needs and give you peace of mind. It is natural to want to find the very best type of care for your little one and you may find the idea of hiring a nanny quite appealing. Yet the process of finding a quality candidate, hiring and managing a nanny and protecting yourself from any possible risks that may be associated with employing a nanny may seem a bit intimidating.

Jack Hungelmann, author of Insurance for Dummies, and Michelle LaRowe, International Nanny Association’s 2004 Nanny of the Year, have teamed up to co-author this article with the intent to educate potential nanny employers. Both authors have personal reasons for wanting to share this information with you:

Jack- “With over 30 years experience as an insurance agent and personal risk manager, when my daughter told me that she was feeling overwhelmed with the process of hiring and managing a nanny to care for little Sofia Isabel, my new granddaughter, I began to research the risks associated with hiring a nanny. I felt that I could find the ways to best manage those risks and thus ensure that my granddaughter would receive the highest quality, least risky childcare possible.”

Michelle- “As a professional nanny for more than 10 years, I am quite passionate about my profession. 4 years ago I founded Boston Area Nannies, Inc., a non-profit organization for professional nannies, our mission is to improve the quality of in-home childcare in our area. Our association allows nannies an educational opportunity that will enable them to provide the best care possible to the children they work with. I have seen how wonderful a nanny experience can be, and I have seen and heard about how poor of an experience it can be. One of the most effective ways that I have found to improve the quality of in-home childcare is through educating parents as well as nannies.”

Together Jack and Michelle hope that this article will equip you with the necessary knowledge to make wise decisions and thus avoid some of the potential pitfalls. Hiring a full time or part time nanny to care for your little one should be a positive experience for you—and your child.


Selecting the proper type of childcare provider for your family is one of the most important decisions, that as a parent, you will ever have to make. If you plan on utilizing full-time childcare, this decision is especially critical.

Studies have proven that between the ages of birth to five years, a child’s social, intellectual and emotional development is at its most critical period of formation. It is for this reason that you should carefully consider what type of care is best for your infant, toddler or preschooler, and you need to be confident that the person who is influencing the development of your child has the appropriate skills, dedication and temperament.

Nanny care has several advantages but only if the proper nanny is selected to serve your family. This one-on-one care provides your child with a consistent, loving, nurturing adult that is a team player (could be considered a co-parent) in raising an emotionally, developmentally and socially healthy child. Nanny care meets your child’s individual needs and provides your child with the opportunity to grow and develop in his or her own comfortable home environment. A child who is cared for in their own home is not as likely to be exposed to communicable diseases and so will have fewer visits to the pediatrician’s office and you, as a parent, will experience less stress in your daily routine, allowing you to enjoy your at-home time with your child.

Nanny care is unsupervised care, and the nanny industry is unregulated, thus risks are present. It is your responsibility to reduce the risks and if you do your due diligence, you will no doubt find that employing a nanny, will be a wonderful experience and an appreciated solution to your childcare needs.

Research the Industry

It is wise to be a responsibility and educated consumer. To better understand the nanny/employer relationship, the hiring process and the current industry trends, visit the following well respected and up to date websites:

Finding Just the Right Nanny

If your decision has been made to move forward in hiring a nanny, proceed with caution during your selection process. The nanny industry is unregulated and there is no nationally recognized licensure, regulatory board or credentialing for nannies or the agencies that place them.

There are several ways to find nanny candidates: nanny placement agencies, newspaper advertisements, bulletin boards, personal referrals, Internet classifieds or On-line nanny matching websites. Use caution when using Internet matching or On-line website services that do not provide screening services or support for their client families and nannies.

If you really want to simplify the process for yourself and prevent possible serious problems later, it is recommended that you contact a reputable nanny referral agency. The International Nanny Association (INA) at www.nanny.org and the National Alliance of Professional Nanny Agencies (APNA) at www.theapna.org welcome to their membership nanny placement agencies that agree to adhere to their commitment of excellence and to their code of ethical conduct. Both associations post a membership list on their website.

Advantages of a Placement Agency

A reputable nanny placement agency should be active in the nanny community, hold membership in professional organizations such as INA and/or APNA and be free of unresolved complaints with their local Better Business Bureau.

A quality placement agency knows their nannies. Knowing their candidates reduces the risk of hiring an unsafe person. A good agency has a thorough screening process. This screening process typically includes a criminal background check (local, state and/or national), business and personal reference checks, educational background check, employment record check, social security or identification verification, driving record check as well as an in-depth personal interview with the candidate. Most reputable agencies take time to interview the family with the intent to find out what their individual search criteria are and then will only send them candidates that meet the identified criteria. A quality placement agency operates under a business code of ethics and does not hide, falsify or embellish the records of their nanny candidates or the family that has employed them. A quality agency will provide its client family with the resources needed to be a successful nanny employer, such as: state and federal tax information regarding domestic employment based on current laws, referral to payroll and tax service providers and health insurance providers, information on worker’s compensation insurance requirements (if required in your state), guidelines for a nanny/employer work agreement and other recommendations as needed. An ethical nanny referral agency will either offer a trial period before a commitment to long term employment commences or will offer a free replacement candidate if the placement ends (for any reason) before a pre-determined time period.

Tips for Utilizing On-line Nanny Classifieds and Internet Based Matching Services

With the convenience of the internet, many of today’s nannies are turning to online nanny classifieds and internet matching sites that have replaced the newspaper “childcare help wanted” sections of yesterday.

Many internet matching web sites, free online bulletin boards, and for fee searchable databases have been created to connect potential employers with nannies that are searching for positions.

However convenient, there are risks associated with using these services. By using these virtual services, you are replacing the “human” service component. You loose the middle man that helps you walk through the placement process, ensure that ethical practices are being followed, and the support of an agency if the placement doesn’t go as expected. You are also putting yourself in a situation where the potential employers have never been met, spoken to, or even verified as actual potential nanny employers.

Online Agency Referral Services

If you do decide to do an internet based job search, consider using a site, like NannyJobs.com that provides the convenience of internet searching with the reliability of using a reputable nanny placement agency. NannyJobs.com provides a forum for reputable placement agencies to advertise their listing positions on a national level. If a nanny is interested, an application is completed and forwarded directly to the agency, where the standard interviews, background searches and reference checking takes place.

Hire Legally

Reputable nanny placement agencies will only refer candidates that are legally able to work in the United States. They will have on file the nanny’s proof of eligibility to work in the U.S. The Department of Labor classifies nannies as domestic and unskilled workers thus individuals from outside of the United States are not likely to be able to obtain a work visa for employment as a nanny. It is highly recommended that nannies speak English fluently, thus enabling them to effectively communicate in emergency situations and understand directions. Hiring an illegal immigrant also puts you at risk of having to pay considerable fines and penalties imposed by the Immigration and Naturalization Service or Internal Revenue Service. When hiring legally, you also reduce the risk of having the relationship with your child and his or her caregiver severed if your nanny is deported.

Pay Legally

Nannies are employees and not classified as independent contractors. An independent contractor is defined as someone who supplies their own tools of the trade and works on their own schedule. Nannies are considered an employee because they use the diapers, bottles, food, toys and other supplies that are in the household, they also work on the schedule that is set by the family, thus the family is their employer. Nannies must be paid legally, which means legal payroll taxes should by withheld and paid to the proper entities. Nannies are subject to the minimum wage law and live out nannies are to be paid time and a half for hours worked over 40 in a workweek. Failure to abide by legal hiring and tax withholding guidelines as outlined by the Internal Revenue Service, puts you, the employer, at risk for significant fines and penalties.

To simplify your obligations as an employer we strongly recommend using payroll service providers or research nanny specific payroll and tax software. Using a service makes this process easier and keeps the financial and tax errors to a minimum, reducing the risk of fines and penalties caused by incomplete, late or inaccurate filings. It also significantly reduces your time involvement. GTM, the Household Employment Experts offers a complete line of products to make this process simple and stress free.

Buy the Right Insurance

Many of the risks associated with hiring a nanny can be minimized or eliminated with the proper insurance coverage. It is important not only to buy the right kind of insurance but also to buy it in sufficient quantities so that you're well protected in the event of a claim.

Workers’ Compensation Insurance: Workers’ Compensation is a type of insurance policy that provides financial assistance to employees if injured on the job. When an employee is injured on the job, Workers’ Compensation assists with lost wages, as well as medical expenses related to the injury and recovery. In addition, it protects employers from being sued. If the employer has not been negligent, an employee that is injured while on the job cannot sue his/her employer. Many states require that domestic employers carry workers compensation insurance.

Workers compensation has two significant advantages even if your state does not require it. First, if your employee is injured on-the-job, the insurance will pay his/her medical bills and lost wages, regardless of fault, and second, the law bars personal lawsuits against you if the injury was your fault. In short, with workers compensation insurance, your injured nanny is well taken care of and you are protected from lawsuits. Because of these two benefits, consider optionally buying workers compensation insurance if you live in a state that doesn't actually require the coverage.

The best place to buy the workers compensation insurance you need is probably from your homeowner’s insurance agent.

Auto Insurance: If the person that you hire will be required to drive your child/children (even occasionally), be sure to get the candidate’s driving history report, the nanny can request his or her own record from the state where she/he is licensed or you can ask to have a private investigator run the report for you, most nanny referral agencies run these reports as standard procedure, or if you are going to put the nanny on your auto insurance policy, your agent will check the nanny’s driving record. Don't hire anyone that has demonstrated a careless driving record.

If the nanny will be driving a vehicle that you own, you should contact your automobile insurance agent to add the nanny to your policy as an occasional or ‘on the job’ permitted driver. If he/she will be transporting your children in her own vehicle, verify that she is carrying reasonable liability coverage -- at least $250,000 per person for injuries. Make sure that you have proof that her policy covers her when transporting children as part of her job description. Many auto insurance policies do not.

Umbrella Liability Insurance: It is not difficult in today's quick to sue environment to get sued for more than the amount of coverage you're currently carrying under either your car insurance policy or your homeowner’s insurance policy. Having an extra person in your household increases your lawsuit risk. For example, if a child is left for a play date in the care of your nanny and while your nanny is pushing her on the swing she falls off and gets injured. The child’s parents may bring suit for injury claiming negligence on your or the nanny’s part.

An Umbrella liability policy provides $1 million or more of additional lawsuit coverage. An Umbrella policy may cost as little as an additional $150 per year. If you don't already have one, absolutely buy an umbrella policy for yourself. If you have workers compensation insurance coverage on your nanny, be sure that your umbrella policy does include excess employer's liability coverage as well as injuries caused by employees to others. The majority of umbrellas do not so you may need to shop around.

Use a Work Agreement

By far, the key to any successful nanny / employer relationship is effective communication. This all begins with a solid nanny/employer work agreement. The International Nanny Association has developed an agreement that is available for purchase through its website, to purchase the agreement along with additional educational information, go to www.nanny.org and order the Parent/Employer Education Packet. Having a written work agreement for future reference eliminates misunderstandings and also outlines the roles, responsibilities and expectations of the nanny and the employer. The work agreement addresses such things as; paid holidays, vacation and other benefits, tax responsibilities, daily responsibilities, and in general define the employer and employee’s obligations to one another.

Treat Your Nanny as a Professional

As with any good relationship, mutual respect, open communication and trust are very important. Show your child care provider that you respect him/her as a professional by paying them as you would a professional employee, offering standard benefits, (paid vacation time, health insurance, annual raises) or possibly offering other perks (such as health club memberships or frequent flyer miles). A nanny doesn’t want to be treated as domestic help. She/he truly loves working with children and wants the children to be the main focus of his/her responsibilities. In most cases, a professional nanny should not be asked to do your personal laundry or clean your bedroom or private bath. Respect your nanny’s privacy. This is especially important if you employ a live-in nanny. It is inappropriate to enter your nanny’s bedroom without her permission. Her weekend activities and other areas of her personal life are not your concern. If you plan to use a nanny camera, discuss it with your nanny. Nanny cams are meant to reduce the risk of abuse, not to capture it. The laws vary from state to state regarding the use of concealed cameras, such as where they may be located and whether audio recording is allowed. It is not legal to have a camera in a bedroom or bathroom. To avoid breaking the law, do some research regarding your state regulations. If you have the slightest doubt about your child’s well being, reevaluate your nanny and take the necessary steps to ensure your child’s safety.

Have a Backup Plan

Have a backup plan for those days when your nanny is sick or unable to be at work. This reduces the risk of you being left without childcare when you really need it. One good back-up plan would be to register with an agency that offers temporary nanny referral service, be sure to choose one that pre-screens candidates before sending them out to families. Your nanny may also have recommendations of individuals that can cover for him/her when an emergency situation arises.

Closing Remarks:

Michelle: Being a nanny and making a difference in the life of a child is an amazing experience. It’s not a choice; it’s a calling. The nannies that I know absolutely love what they do and exemplify professionalism as well as devotion to their vocation.

Jack: There are risks and insurance issues associated with hiring a nanny. Workers compensation, personal liability coverage and auto insurance issues are a few you may encounter. If you don't already have an agent who is an insurance expert on your team of advisers, this would be the time to find such a person. Agents with either the CPCU or CIC designation generally have the expertise to give you advice on such matters.

Together: Providing a professional caring nanny for your children can be a wonderful gift to them—and to you. If you follow our combined advice and pay attention to the details, you should be able to rest in the assurance that your child is well cared for and the time and effort you put into making an educated decision will be well worth it.

Recommended Practices for Nanny Placement Agencies
To promote quality child care and an environment for all children that nurture their well-being, the International Nanny Association has developed recommended practices for nanny placement agencies.