Issue Date: July 14, 2002
Hiring a great nanny
When it comes to your kids, saving cash isn't the point.
When you hire a nanny, you make an employment decision like no other -- one that is fraught with emotion for most parents.
But here's the thing: A good nanny can change a young family's life. "A professional nanny will always be one step ahead of the parent," says Katie Facey, owner of the California Nanny Company in Orange County. "She's not going to let the milk run out in the refrigerator. She's going to organize play dates, get the permission slip signed. She knows what books to read."
Nannies should have some training in child development and at least two years of baby-sitting experience, plus first aid and CPR training. At least 600,000, virtually all of whom are women, work in the United States today. (A more exact number is difficult to pinpoint, because so many work off the books.)
But savvy parents and seasoned nannies agree the relationship needs to be professional to work well for both parties. So let's look at what that means, practically (beyond the essential issues of warmth, ability and trust).
First, write a detailed job description. Are the hours set in stone, or do you need your nanny to be flexible? How will you handle (and pay for) overtime? What is the vacation policy? The International Nanny Association suggests two paid weeks a year. Is housekeeping, cooking or grocery shopping involved? Is she supposed to supervise homework or use her car to ferry your child around? If so, then agree on extra gas money.
Do your research. Many parents hire a reputable firm to find candidates. (Many good ones belong to the Alliance of Professional Nanny Agencies or the International Nanny Association.) Other families use the classifieds or word of mouth. Either way, be scrupulous about calling references and doing a criminal background check (criminal history, driving record, Social Security number). Hire an employee-screening firm to do the check if you're not working with a nanny agency that provides that service.
Determine the going rate, and pay it. Salaries differ greatly from city to city. In San Francisco, Boston and Washington, where the cost of living is steep, "live-out" nannies earn $12 to $16 per hour. In Chicago, Dallas and Houston, the rate is $10 to $14. (Live-in nannies earn about 25% less because you provide room and board.) Pay fairly, because nannies compare notes.
Test-drive each other. It's amazing that employers will fork over a $2,000 commission to an agency but won't spend a few days' salary to see how a nanny fits into their household, Facey says. Agree that you'll try each other out for a set time, then both decide whether to continue.
Do the paperwork. When you hire a nanny, you officially become a household employer. That means you are required to apply for federal and state household employment tax identification numbers. (Federal forms and instructions are available online at IRS.gov; search for Publication 15.) You also must pay half of the nanny's Social Security and Medicare payments, plus unemployment taxes. Basically, that means your financial obligation runs about 10% beyond the nanny's gross salary (e.g., $2,000 on a $20,000 base, for a total of $22,000).
"These are expenses many families don't know [how to deal with], and it discourages them from being legal," says Stephanie Breedlove, a Texas accountant who specializes in nanny taxes and handles filings for clients for $500 a year. (See breedlove-online.com for details.)
The good thing about being aboveboard is that you're entitled to a tax break. You can shelter up to $5,000 a year in a flexible spending account, if your company offers one, to pay for care; that's equivalent to a tax savings of about $1,500 to $2,000.
Jean Sherman Chatzky is the author of "Talking Money" (Warner Books, $24.95). Marcia Meyers contributed to this report.
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The "Nanny Diaries" duo dishes
Between them, Emma McLaughlin and Nicola Kraus have worked for more than two dozen
New York City families -- fodder enough to write the hysterically touching best seller "The Nanny Diaries" (St. Martin's Press, $24.95). In the novel, the relationship between the overbearing
Park Avenue mom and Nan (the nanny) ends badly, as these things all too often do. So we asked the pair how parents can avoid precisely that situation. Their thoughts:
Make the initial meeting a job interview -- not a first date. Notes Kraus, "When the parents and Nan first meet [in the book], the words 'child care' and 'nanny' are danced around." Act as if you were hiring someone at work. Focus on her qualifications and your expectations.
If you change the hours or responsibilities, discuss what that means in terms of salary and bonus. And put it in writing for everyone's understanding and comfort.
Make two-way communication easy. Some parents and caregivers write each other daily notes. Others e-mail or debrief at the end of the day or week.
Accept the fact that this relationship will end. "Leaving a job can be quite painful for both the child and the caregiver," McLaughlin says. Even if the nanny is leaving on bad terms with the parents, "it's really important to put your professional differences aside to allow for some sort of explanation and goodbye" for the child.
Photo by Todd Plitt, USA TODAY
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