Avoid Nanny Hiring Mistakes with Tips from the Experts

In our experience placing nannies in the homes of private families for nearly 30 years, we have had to guide our clients in avoiding many nanny hiring mistakes. For our client families, two of the top drivers in seeking care are quality and cost. Measuring the “cost” of a nanny search at face value can end up costing a family far more than they bargained for. The following tips may help you to navigate your search and potentially keep you out of trouble. 

Nanny Hiring Mistake #1:

Failure to Understand the Market 

Your goal is to attract the highest quality candidates possible, for a rate that is affordable to you. To appeal to candidates, you must offer a wage that is livable and where possible, competitive.  When calculating your budget, do as much as you can to understand your local market around wages nannies are earning in your area. Then exercise caution. 

If an applicant suggests they are willing to accept a lower-than-market rate this should be a flag. Ask if they are authorized to accept work legally. Or it could be that limited experience prohibits them from being considered for higher-paying jobs. It could be that their references don’t stand up. 

Pro Tip to Avoid Nanny Hiring Mistakes:

Try not to rely on the variability of online market listings to determine current wages in your area. A more reliable source for what nannies are being paid near you would be to ask your friends, co-workers, or the local childcare placement agency. Once you understand the going rates, you can determine whether a nanny or in-home sitter will fit within your budget.  From there, you are better equipped to create a desirable job description to attract quality candidates. 

Pro Tip for Avoiding Mistakes Parents Make When Hiring a Nanny:

Avoid the temptation to list a range in your job listing. Try to settle on a solid dollar amount rather than a range from low to high “depending on experience.” Posting a pay range can lead to conflict as families may expect to pay the low end initially, while candidates are typically drawn to the job based on the potential of earning the high end. Unfortunately, we’ve observed a significant number of offers being declined due to this misalignment. Listing the job for a set hourly rate will eliminate delays and confusion. Any applicants who are not willing to work for the listed rate will simply not apply, saving all parties a lot of heartache.

Nanny Hiring Mistake #2 :

Failure to Pay the Nanny Legally 

One of the most costly mistakes is not paying the required taxes when employing a nanny or sitter. There are numerous hidden costs to paying “Off the Books.”

The most common way the IRS discovers your failure to pay the nanny legally is when your former employee unintentionally alerts the Internal Revenue Service by attempting to sign up for unemployment benefits. (This happened in waves during the pandemic of 2020). Your nanny or sitter inadvertently finds out that the months or years they were in service to your family do not qualify them for unemployment simply because they were paid “off the books”.

The IRS can and will fine your family for the months or years of back taxes owed, which is far more costly than if you had paid the nanny legally, to begin with.  The cost to the nanny of being paid “under the table” will follow them long after the job has ended. It will impact their ability to establish employment history and credit history. As they age, they will not be eligible for benefits such as social security. 

Pro Tip: A nanny payroll service specializes in payroll for domestic workers, which is a largely unregulated and unique industry. There are specific advantages to utilizing a nanny payroll service over a standard payroll service, or your accountant, who is not likely to be familiar with the nuances of the industry.

Nanny Hiring Mistake #3:

Failure to Conduct a Thorough Background Screening

When you hire someone to work in your home, background screening is arguably the most important piece of the puzzle. It is the main reason a family outsources a 3rd party firm to conduct their search. But there is so much more to a background screening than criminal background checks.

Sure, you can find easy-to-access online marketplaces to pull instant data search reports. From the consumer’s perspective, this seems like a great option. Bear in mind this is simply a compilation of information pulled from public records. There are limitations to such information and federal laws in place to protect the privacy of job seekers, thus keeping criminal and misdemeanor information private. The FCRA (Fair Credit Reporting Act) regulations protect job candidates and have different laws for different states. 

A true background check requires written permission from the job applicant to obtain court records. Some courts in small counties take an extended period a clerk quite literally has to manually access the records. An online “instant background check” is nothing more than a generalized search of online databases and is not necessarily complete.  Even the candidates seeking employment do not fully understand this, let alone the families who hire them.  Failure to unearth blemishes on a candidate’s background can cause significant harm.    

Nanny Hiring Mistake #4:

Failure to Understand the Cost of Vicarious Liability 

If your family requires a nanny or sitter who can drive your children, it is essential that you understand who may be at fault should they be involved in even a minor automobile accident while on shift. 

As their employer, even if they are insured, you could still be liable for the incident since they are working while driving your children. Before hiring, contact your insurance agent to discuss coverage, whether the children are driven in the nanny’s vehicle or your own. Ensure that your nanny also communicates with their insurance agent before commencing employment.

Due to the rise in online rideshare services, the rules around insuring drivers who drive people for employment (not food, or packages) have significantly changed. Many carriers will no longer insure a driver who is transporting humans (as opposed to goods) due to the risk involved. Don’t assume that automobile coverage extends to your nanny transporting your kids. 

Nanny Hiring Mistake #5:

The Cost of Making the Wrong Hire 

What happens when you realize the nanny you took so much time to find and hire, is ultimately not going to work out for the long term?  You may have fair warning, and time to engage a backup plan or conduct a new search. Or you may receive a text or email and be without care tomorrow. 

A full-service placement agency can provide two layers of protection that are not often available when a family makes a self-referred hire. Most agencies bundle in a “replacement” policy or warranty with your original fee. This means that for a duration of time after the hire, you may receive a replacement nanny free of charge. Many agencies also have a backup care service, where screened and vetted nannies can step in and assist when a family finds themselves without care. 

Nanny Hiring Mistake # 6:

Failure to Understand the Value of Your Own Time

Where do we begin in measuring the value of our time?  One thing we know for sure is that it’s limited!  Whether you are a “stay-at-home” parent or employed, you are busy and you are likely reading this because you need help with your household. 

When conducting an organic search, it’s worth evaluating the value of your time. Consider how this measure aligns with the potential benefits of outsourcing the job to professionals. As a nanny placement service, we spend on average roughly 135 payroll hours recruiting and screening each nanny we place with a family. This means that hundreds of hours are spent declining candidates, for numerous reasons. The vast majority of applicants to our agency are turned away. We thoroughly assess candidates for representation and invest significantly in those chosen to represent our company. Priority is given to candidates returning after successfully fulfilling a term with one of our clients

We find that successful nanny placements are a combination of both art and science. Our advocacy work for the industry is a natural draw for quality applicants who view this as a profession, but our recruiters eliminate the majority of candidates who apply. The candidates we do accept for review undergo a rigorous process of interviews and screening. Ultimately the chemistry between a candidate and family will be the deciding factor, once all practical measures have been taken. 

Nanny Hiring Mistake #7

No Written Agreement

There are so many reasons a written agreement is critical to long-term employment success. Due to the nature of this work boundaries are not as clear as they may be in other workplace settings. There is so much more to consider than just the standard clarifications of the role such as pay, schedule, and duties. Consider that your home is someone’s workplace. Take precautions around caregiver safety and create an environment that is conducive to caring for children. Organizations like Hand in Hand Domestic Employers have templates for nanny work agreements in both English and Spanish.

We find that having a work agreement is beneficial as it helps both parties understand their expectations. Additionally, it provides a point of reference in case disagreements arise regarding those expectations. A successful outcome for a placement comes down to communication and an employment agreement is the most formal example of expectations.

Check out our recent post “5 Aspects You Always See in the Most Successful Nanny Placements”