Basic Nanny Laws: Everything You Need To Know

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Nannies face the unique challenge of being in a largely unregulated industry. It makes it hard to ensure you're protected, paid, and treated fairly. That puts you in a vulnerable position.

But there are rules to protect you and strategies to help you self-advocate.

Before you start your job search, take time to educate yourself about nanny laws. Once you understand your rights, you’ll know what to expect. You’ll see what you’re willing to put up with from an employer. In short—you’ll recognize your worth.  

Once you know your rights, you set yourself up for success. You get paid on time, and you have access to medicare. You also get paid sick time and paid vacation time. 

Being treated like a professional

Are nannies considered contractors?

No, and that’s good because it means you get benefits. Nannies are employees, not contractors. Contractors set their schedules and bring their own tools and supplies while employees receive schedules and responsibilities from an employer (the family). 

As an employee, you’ll need to fill out an Employment Eligibility Verification form - known as a form l-9. This form proves your identity and your eligibility to work in the U.S.

Being an employee also means your family file and pays taxes on your behalf, while “independent contractors” lose 7.65% of their income. 

Getting paid

What’s the difference between hourly and salaried?

The Fair Labor Standards Act (FLSA) defines nannies as “hourly” employees. That means you get paid an hourly rate based on the hours you’ve worked, while a salary is a mutually-agreed upon amount.  

Even if you settle on a weekly rate with your employer, they still have to break it into an hourly rate to ensure you get paid for any overtime. 

How does minimum wage work?

Minimum wage varies depending on what city, state, or even county you live in. Look up your city’s average rate to know what to charge employers when negotiating. The FLSA ensures workers get paid a minimum wage of $7.25 an hour (at the very least). 

Overtime increases your earnings. You make 1.5x your regular hourly rate after you’ve worked more than 40 hours. Each state has its own rules about overtime hours. Do your homework to understand the regulations in your area. 

Do nannies get sick time?

It’s no surprise that nannies get exposed to lots of germs and sometimes they get sick. Depending on your state, you can earn 1 hour of paid sick time for every 40 hours worked.  For full-time nannies, that’s close to 52 hours of paid leave a year. 

You’re also entitled to your regular wage 52 weeks a year (also known as “guaranteed pay”). If a parent comes home early or stays home sick, you still get paid. Same goes for holidays or family vacations.

Remember to discuss guaranteed pay with your family before you take the job.

What other benefits can nannies collect?

Nannies can also collect extra benefits like paid family leave and disability insurance. 

In some states, disability insurance is covered as long as a family pays you legally. In others, your employer must buy an insurance policy on your behalf. Not all families are aware of this. 

Remember, you are your best advocate. If you need more information, contact the state or an insurance agency.

The more you learn about nanny employment laws, the better you can protect yourself. 

Educating yourself about payroll

What is nanny payroll?

Some nannies accept cash. Some get intimidated by the word “payroll,” but payroll just means a regular payment issued to an employee from an employer that follows the necessary employment laws.  

How do unemployment benefits work?

Nanny jobs are impermanent by nature; as kids get older, the needs of the family change. If you get paid legally, you can collect unemployment benefits. Benefits tide you over while you look for a new job. 

You can apply for benefits if you’re paid in cash, but the government might deny your application. At the very least, they’ll delay it.  

What happens with medical care?

The Affordable Care Act gives nannies that are paid legally access to medical insurance. You’ll be able to go to the doctor based on how you feel, not whether you can afford it. 

Being a nanny involves lots of adventure—sometimes even a little danger. If you get hurt and you're paid legally, you get the support of Worker’s Compensation to handle medical bills. 

If you suffer an injury and you’re not on paid legally, you risk racking up debt in medical expenses.

How can paying taxes save you money? 

Being paid legally makes you eligible for refundable tax credits. You can also collect health insurance subsidies. Depending on your pay, you qualify for the Earned Income Credit. This credit can lower your taxes. It might even spell a refund.

What if you need a loan?

Without a formal income, you’ll have a harder time applying for credit or a loan if you aren’t being paid legally. Your employer could also be on the hook for several years of back taxes and a potential audit. 

Who is required to pay taxes?

If you earn $2,300 or more a year as a nanny, you are legally required to pay taxes every year. The easiest way to do this is by having your employer set aside a portion of your weekly pay. 

Typical nanny taxes include Social Security and Medicare. There are also state and federal income taxes and even county taxes. 

It’s important to know your actual weekly pay once taxes have been removed, especially when negotiating compensation. This is called your “take-home pay,” versus “gross” salary.  A nanny tax calculator helps you determine the final number in your bank account.  

Be sure to ask your employer for a W-2 form at the end of the year so that you can file your nanny taxes on time. 

Before taking the job

When interviewing with families, it's essential to talk about how you want to be treated. The nanny industry is highly variable. Each family is quite different—for better and for worse. 

A nanny contract sets clear expectations and helps avoid any surprises. Most importantly, it encourages families to become aware of the employment laws in the area. The more you learn about nanny employment laws, the better you can protect yourself. 

With our payroll service, you'll ensure that you're getting paid accurately and on-time while getting access to medicare, unemployment insurance, and so much more.

You’ll want to sort out the details before you start the job. Nanny Lane can help simplify the process.


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