When hiring a nanny, one of the first questions employers and nannies will be about how much to pay them. There is almost always a negotiation process where the aim is to make both parties feel the compensation is fair. But how do you ensure that you are negotiating the right way? Our payroll and HR partner, GTM Payroll & HR, provides this look at helpful negotiation tactics to make the process go smoothly and get you to hire the right person for your family.
One of the most complex aspects of hiring a nanny is negotiating a pay rate. You want the best caregiver you can find at a reasonable rate. And that shouldn’t be an issue if you approach this negotiation as a conversation, not a conflict. It’s not a matter of one side winning or losing. Seek common ground, understand each other’s needs, and develop a shared solution. Both sides are satisfied, which is an excellent start to your professional relationship!
Your nanny will work in your home and care for your children. You’ll want them to feel valued and respected, while remaining financially responsible.
With proper preparation and the right mindset, negotiating pay with your nanny will be just like a conversation. Here are some tips on how to negotiate your nanny’s pay.
Understand your local market
The going rates for nannies vary by city. Even moving from a metropolitan area to its suburbs can result in a significant change in caregivers’ pay. Knowing what nannies get paid in your city or town is essential. The International Nanny Association (INA)’s Nanny Salary and Benefits Survey is a good resource. If you’re working with a placement agency, they will help you set a reasonable pay rate for the nanny you want. You can check online job sites to see what rates families seeking help are offering. However, the wages offered on these sites are often far too low to attract a high-quality, professional caregiver.
Here are some other factors to consider when budgeting for a nanny.
Use a nanny tax calculator
You’ll have other expenses on top of your nanny’s pay, including payroll and unemployment taxes. A Dependent Care Flexible Spending Account through your employer, along with the Child and Dependent Care Tax Credit, can help offset these expenses. Using a nanny tax calculator gives you a complete picture of your financial obligation. That way, your pay rate is one you can afford, and you know the most you can offer before turning away a candidate.
Always treat your candidates with respect
A high-quality nanny will not be interested in a job with a family that doesn’t respect them. That includes pay negotiations. There is no need to be condescending, demeaning, or confrontational. Treat your candidates as the professionals they are. You’re starting a relationship with someone who will work in your home and care for your children. It’s an important hire, and you want the best candidates for your position.
Negotiate an hourly gross pay rate
Nannies are required by law to be paid an hourly rate and not a flat salary. You could offer guaranteed hours, which is like a salary, because your nanny can rely on a steady weekly pay. Many nannies prefer guaranteed hours because they help them budget and pay their bills.
Gross pay is your nanny’s hourly rate before taxes and other deductions. Your nanny can also use a nanny tax calculator to enter their personal tax information and determine their net or “take-home” pay.
Remember overtime is time and a half
Nannies are also required by law to be paid at least time-and-a-half for hours worked over 40 in a workweek. If you’re offering your candidate $20/hour for 50 hours/week, that’s $20/hour for the first 40 hours and $30/hour for the additional 10 hours. Nannies may prefer a job that offers overtime, as it allows them to increase their pay.
Live-in nannies typically do not need to be paid overtime, but state laws vary. For example, in New York, live-in household employees receive overtime for hours worked in excess of 44 in a workweek.
Pay “on the books”
There’s too much financial and legal risk involved for your family to take the chance and pay your nanny “under the table.” So, paying illegally should be a non-starter. The top nannies understand this and will only take jobs that pay “on the books.” They want to be treated like professionals and to enjoy the benefits of legal pay, such as an employment history and verified income, when applying for credit, a loan, or a mortgage.
Offer benefits
Pay rate is not the only consideration for a nanny when deciding whether to take a position. You could consider offering health benefits to help your nanny reduce their health insurance costs. Many plans are funded pre-tax, so you’re both saving money by reducing your nanny’s taxable income.
While some paid time off is standard, you could also be generous with vacation and sick days. That could be attractive to a nanny, even if your pay rate is slightly low.
Know employment laws in your state
Some states are making it illegal for employers to ask about a candidate’s salary history. Make sure you understand the applicable labor laws in your state. Remember, as a family hiring someone to work in your home, you are considered an employer, and these labor laws may apply to you.
Agree to an evaluation period
Let’s say you have an applicant you are fond of, and they would like to work for you. But you’re a little bit apart on the rate of pay. You could ask your candidate to work for a few months at the lower rate, then revisit their wages at the end of the “introductory” or “trial” period. You would need to put this in writing and, when the time comes, determine whether your nanny is worth paying more to keep them on board or end the relationship and restart your job search.
Make a fair offer
It may be tempting to lowball your candidate and then plan to negotiate that rate. However, offering a low pay rate (without benefits to offset it) could be a deterrent to a high-quality, professional nanny. They may say “no” and move on to a family that respects their work.
Do your research and make a reasonable offer. You can negotiate higher, but always stay within your budget. Offering a fair pay and benefits package will also make your candidate feel validated. If they believe you value their work, it gives them even more incentive to do a good job. You’re also building trust in your employee, and that doesn’t come with a price tag.
Put it in writing
Once you’ve agreed to a rate of pay and benefits package, make sure it’s documented in your work agreement. Your employee’s hourly rate, overtime rate, paid time off, and other wage and benefit details should be clearly stated so there’s no confusion come payday.
Hire Your Nanny from A New England Nanny
Before you even consider negotiating a nanny’s pay, you want to make sure you’re looking in the right place for your nanny. With more than 34 years of placing professional, experienced, thoroughly screened caregivers in the Capital Region, our agency is a great place to start. Not only will we help find the right candidates for you to interview, we are here for all the support you need after you hire.
And if you need full- or part-time care, or just occasional babysitting, after-school care, housekeeping, or anything else in your home, let us know how we can help!
Request a service or give us a call at (518) 348-0400 and we’ll provide a free consultation to get you the care you need.