When you hire the services of a nanny you automatically become an employer and as such you are required to meet certain obligations such as providing a pension, paying national insurance and deducting and paying over tax.
There are several obligations an employer must comply with when employing a nanny. Below we list some of the more important ones:
It is your responsibility to check whether your nanny has a legal right to be employed in the UK. Before formally hiring a nanny you should check her identification documents (identity card, passport, birth certificate) to verify authenticity and to check that she is allowed to work in the UK.
If you employ a nanny you will have to register as a new employer with HM Revenue & Customs and set up a PAYE scheme. As an employer, you will be responsible for deducting income tax contributions from your nanny’s wages and paying it over to the Revenue and Customs department. You are required to keep records of all payments made for both yourself and your nanny. Many organisations can help offer nanny PAYE services.
You will also be required to take out Employer’s Liability Insurance to cover you should anything happen to your nanny such as becoming ill or being injured while working on your premises. You may already have this type of cover on your existing insurance but check the details of the policy carefully to make sure.
You will be required to enter into a written contract with your nanny within two months of commencing work. The details should include salary, working hours, and employee responsibilities and duties. If any details of the contract should change, these have to discussed with your nanny and agreed to before being added to the contract as a signed addendum.
You must provide your nanny with a weekly or monthly payslip showing earnings and deductions.
As an employer, you will be required to adhere to the minimum wage requirement although you will most likely be paying much more than that. On average live-in nannies are paid between £300 and £350 per week while day nannies charge about £400 to £475 per week. The nanny you choose to employ may also have salary expectations that are higher depending on the duties required and based on her skills and qualifications to fulfill the position.
Every full time or part time employee in the UK is entitled to annual leave equivalent to 5.6 weeks per year of employment. You have a choice whether to include bank holidays in your nanny’s leave entitlement. Holiday periods should be negotiated between you and your nanny in advance.
You will be required to set up a pension scheme for your nanny if she earns more than £10,000 per year and is aged between 22 and the stated retirement age. You will be required to make a contribution towards the pension scheme every month calculated on the gross salary earned by your nanny.
One week’s notice of terminating the contract is required within the first month of employment by both you and your nanny. After the first month, one month’s written notice should be given although this can be negotiated. The agreed notice period must be reflected in the employment contract.
You will be required to adhere to the Working Time Directive which means your nanny cannot be expected to work more than 48 hours per week. If you require your nanny to work longer hours and she agrees, you can both sign a written agreement to this effect. However, you cannot force her to sign the agreement and she has the right to change her mind at any time by giving you one week’s notice.
If your nanny should fall pregnant while employed by you, she will be entitled to maternity leave in addition to her normal annual leave.
If you are at all unsure how to deal with all these responsibilities, there is help at hand. Professional services companies are available to help you with your legal responsibilities towards your nanny. They are able to run your payroll and take care of your national insurance and tax contributions for you and some also offer pension services.