Nanny Employer Blog

Q: Should I offer health insurance benefits to my nanny or other household staff?  Is this common practice?

A: Yes!  At Mom’s Best Friend, we seek to provide you with the best advice and most current trends to enable you to make the best hiring decisions! We always advocate that our clients offer health insurance because of the tax advantage to both parties, as well as the peace of mind you receive from caring for your employee and from knowing your employee can get access to the medical coverage they need when they need it. 

A 2010 International Nanny Association Survey and Benefits Recap reported that 16.38% of nannies receive insurance paid at 100% and 13.75% receive insurance paid at 50%.  While 30% of professional nannies is not a majority, Breedlove & Associates (www.breedlove-online.com), a national tax and payroll firm exclusively for household staff, reports seeing an upward trend in the offering of medical benefits.  Perhaps the reason for this trend is greater education of parent employers about the advantages. 

Even if you are not in a financial position to cover any of the cost of your employees’ insurance, both parties are still better off reducing the salary by the amount of the insurance premium and then paying the full insurance amount because neither party will pay taxes on that deduction.  The type of plan chosen and thus the amount of the premium may determine what contribution, if any, is comfortable for your family’s budget.  Just keep in mind that this stipend is tax free dollars allocated to this expense.    

You can go about setting this up in a variety of ways.  If you are able, you can make your position very attractive by offering this benefit above and beyond the salary negotiated to ’sweeten the deal” and secure a top caliber candidate.  Otherwise, offer to contribute a stipend of a flat dollar amount, to contribute half of the monthly rate, or to provide a separate check for the whole amount in exchange for a reduction in salary of that same amount.  Find out from your nanny or household staff if they are currently carrying their own personal policy.  If so, ask for a copy of the invoice/receipt from this policy for your files and to get the exact amount.  If not, ask him/her to research a desirable policy and provide you with the information so the two if you can discuss together.  Most employers do not cover the cost of the spouse and/or child(ren) but make sure the policy allows for these additions, so they are able to cover them at their own expense if desired.  Do NOT add these employees to your business payroll or benefit plans, as it is a violation of the law. 

Helping out your employees in this way will make them feel valued, viewed as a professional, and secure in knowing they have medical coverage.  You can feel secure in knowing that they will be able to get care as needed and thus be more healthy and able to give the most to their position with you.  If you have additional questions in this regard, please ask your MBF placement counselor or call Breedlove and Associates at 1-888-BREEDLOVE.

     A trend that we have seen recently has been for two families to pool resources and share a nanny for their combined children. Not only does this significantly reduce the amount that each family pays, but it can be a great avenue for children to play and socialize with others outside of their immediate family. I have touched on this issue in previous blogs in reference to long-term options and advocated that families consider this when determining the solution that best fits their in-home childcare needs.

     However, lately, we have been experiencing this same trend among temporary client families who call in for a need that is brief in duration, and can even be last-minute. Families may forget to mention in advance that there will be children present in the home that do not belong to the client family or commonly, neighborhood kids may wander over to the home for a spontaneous play date. We want to make sure that we are doing a good job of locating a suitable caregiver based upon the information provided so that she is prepared to handle the number of children and particular ages present at any given job. In order to do this, we need to make sure that we are notified in advance of the addition of more children needing supervision.

     We can usually accommodate these needs but our caregivers may be thrown for a loop if unprepared. It is also critical that the family lets both the agency and caregiver know who can or cannot come over to the home while parents are away (eg. neighborhood kids). As a reminder, in order to prevent complicated billing, any additional children that will be cared for at any point in time within the job assignment will incur an additional $1 per hour charge for the job’s entirety, even if the extra child is only there a portion of the total time.

     As a reminder, per the contract that you signed with MBF, the other family may not call the MBF caregiver directly to book her to watch their children without going through the agency (this is referred to as an “indirect referral” by you). Your caregiver has also signed an agreement committing to redirect these inquiries to MBF. Thank you for helping us to enforce these agreements without which we could not remain in business.

     Our sitters love your kids and want to make sure we can always over deliver on our attentiveness and care for your little ones, so please make sure to let your placement counselor know of any additions the next time you book a job!

Hiring a nanny can be a daunting process and, for many, the idea of bringing someone new into their home and leaving their kids in the sole care of someone they don’t know can be scary. It’s very important to identify each step needed to carefully navigate this search, the end result of which yields comfort and peace of mind. Whether using an agency or not, this same 10 step process will help you gain a better understanding of how to approach hiring a professional and loving caregiver who is the right match for your family and your unique needs and expectations.

1. Determine your needs: map out the criteria most important to you, from personality to special skills, hours and schedule, salary/package, age experience, education, training, childcare and discipline philosophy, responsibilities, etc.
2. Write a job description: put your thoughts down on paper and spell them out in a one page summary that you can share with an agency and/or potential candidates. This will be the framework of your future employment agreement and a conversational piece for an interview.
3. Register with an agency or post your job: turning over your search to a reputable and experienced agency will allow you to greatly minimize your time and effort in the remaining steps. However, if you are a do-it-yourselfer, you can write a short blurb with the key points in your job description and post it online or in the paper, but be prepared for a flood of unqualified applicants you may have to weed through in order to move on to the next step(s). If your needs are time sensitive or you are very busy, this may not be an option for you.
4. Screen applicants/conduct phone interviews: make sure to screen for the most important criteria (hours, salary, age experience, responsibilities willing to perform, area of town) before moving on to any more detailed probing (an agency will already have done this for you). Above and beyond having the right experience on paper, you will want to have enough chemistry on the phone to warrant an in-person meeting. A good fit is a combination of both!
5. In-person interview: arrange for promising candidates to come to your home to meet with you and get a preview of the potential future work environment. You may want to meet without the children in case it is not a good fit, or bring the kids in for part of the interview to observe the interaction. This initial meeting mainly serves to feel out compatibility (assuming the main needs will be able to be met by this person); a good candidate should interview you too!
6. Trial time/working interview: observing someone while working will give you the best indicator of future performance. Trial time is typically 3-5 days for local non live-in candidates. Try to duplicate the duties, hours, etc. as closely as possible so that the candidate can experience the job as accurately as possible (ex. morning traffic patterns) before moving forward. This time should serve as reinforcement for your decision or bring up possible red flags to halt you from moving forward. A good agency will provide a guarantee period (typically 90 days) in which you can get a free replacement.
7. Reference/background checks: when deciding between two great candidates, a reference check can be the tie breaker. An agency will already have checked references prior to sending you a profile. However, after you have interviewed with a certain candidate, you may have specific questions that are generated that a former employer can specifically address, above and beyond verifying simply whether or not they are qualified for the job. Background checks are essential for peace of mind and the security of your children. Individual families may not know how to conduct these checks themselves or where to go to obtain the most comprehensive and up-to-date information. An experienced agency can assist and can provide ongoing monitoring services as well.
8. Job offer/employment agreement: an extensive written agreement is the key to a long-term relationship where expectations are clear and misunderstandings minimized. An agency may provide a template for you that addresses the most typical scenarios in question in a comprehensive way. The job offer should come in the form of this written proposal with an expectation for some negotiation back and forth to ultimately arrive at a clearly spelled out and mutually beneficial , agreed upon working arrangement. An agency can act as the middle man in cases where negotiating directly is uncomfortable or an awkward way to kick off the new relationship.
9. Job begins: the employment agreement is signed and a start date is set!
10. Post-hire relationship maintenance/job satisfaction: the greatest way to ensure success is to set up regularly scheduled one-on-ones to discuss the job and what is working well and what is not. Providing an open forum for communication and discussion of struggles, obstacles and accomplishments as well (recommended at least monthly) will ensure the long lasting satisfaction of both parties involved. Semi-annual reviews and annual opportunities for bonuses and raises will also demonstrate the perceived value of the performance and relationship.

Good luck in hiring a great nanny! We would love to assist you in this important process with our years of experience and expertise!

The International Nanny Association just released its 2009 Salary and Benefits Survey based on 2008. 667 in-home childcare providers responded to the survey. 86.6% identified themselves exclusively as a nanny, while others were temp nannies, travelling nannies, involved in a nanny share, newborn care specialists, doulas, governesses, etc.

Almost 30% reported completing a Bachelor’s degree, 36% completed some college, and almost 20% completed high school only. The majority are live-out (85%), while 13% are live-in. About 25% have 5-10 years experience, 20% have 10-15 years of experience, and 11% had 15-20 years of experience. Most care for 2 children (46%), ages 3-5 (41%).

Of these professionals, 46% reported using an agency to find their current position.

Salaries are all over the board, typically ranging from $300-1000 per week (pre-tax). About two-thirds report employers withholding federal and state taxes, while about 27% do not withhold taxes. About 24% get paid $15 per hour for hourly babysitting, while 19% get paid $20 per hour, and almost 30% get paid between $10-12 per hour. Full-time live out nannies in Texas earn on average $12.54 per hour.

About 45% of live-out nannies are paid between $50-100 for an overnight, while another 15% receive no additional compensation and 25% report receiving other types of compensation. Most did not receive additional compensation when (and if) they travelled with the family. 74% are paid their normal compensation if the employer doesn’t need them to work and they have the time off. About 18% received the equivalent of one week’s pay as a year end bonus. Many others received bonuses or gifts as well of a different equivalent. However, over 80% of employers did not report their end of year gift as taxed!

About two-thirds receive paid national and religious holidays and paid sick days. 47% report receiving 2 weeks paid vacation (26% receive more vacation), 20% get paid personal days. 17% get their health insurance completely paid for, while 12% get half paid by their employer. 34% get reimbursement for use of their own vehicle, while 34% are provided a vehicle to use by their employer. Others get additional reimbursements like health club memberships, travel, conference fees, retirement plans, association dues, college education contributions, disability insurance, and clothing allowance.

About two-thirds work for a professional couple, 12% work for a family where at least one parent works from home, and 11% work for parents where one is a professional and the other is at home.

We, at Mom’s Best Friend, try and attract the highest caliber caregivers, and thus want to help equip our client families with information so that they can then put together an appealing package that is in line with the current market.

If you would like a copy of the entire survey and results, please feel free to email me at kathy.dupuy@mbfagency.com.