These days, nannies are looking for more than a paycheck. They want to be treated as a professional employee, which means they want the types of benefits that many businesses offer their workers. But what benefits should you offer? Our payroll and HR partner, GTM, offers this guide to creating a benefits package to recruit and retain the best nannies.
When hiring a nanny, it’s easy to focus solely on the hourly wage. However, to attract and retain a professional who will be a true asset to your household, you should consider offering a comprehensive benefits package. A competitive package demonstrates that you value your nanny’s health, well-being, and professional dedication.
Here is a guide to the different types of benefits you could consider offering your nanny.
Financial and Time-Off Benefits
These benefits are a foundation of a professional nanny contract and are crucial for providing job stability and preventing burnout.
- Guaranteed Pay/Hours: This is considered standard in the nanny industry. The nanny is paid for a set number of hours per week, even if the family does not need their services (such as during a family vacation or when parents return home from work early). This ensures your nanny has a stable income, keeping them available when you need them.
- Overtime Pay: Since nannies are typically classified as non-exempt employees, they are entitled to 1.5 times their hourly rate for hours worked over 40 in a workweek. This is required by federal law for most domestic workers.
- Paid Time Off (PTO): Offering a bank of paid days the nanny can use for vacation or personal time is standard. Consider offering 5 to 15 days of paid time off per year.
- Paid Sick Days: Time off for illness or medical appointments is a common courtesy and essential. In some states and cities, it’s required under a paid sick or paid family leave law. Even when not mandated, it again shows your commitment to being a fair employer.
- Paid Holidays: If the nanny is required to work on a holiday, it is standard practice to compensate them at time and a half.
- Mileage Reimbursement: If your nanny uses their personal vehicle to transport children or run errands, you should reimburse them at the current IRS standard mileage rate. This applies only when using their own car for work duties.
Health and Wellness Benefits (Attracting Top Talent)
Health benefits are one of the most requested and valuable components of a compensation package, making your offer stand out in a competitive market.
- Health Insurance Stipend/Reimbursement: The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is an excellent option for employers with one employee. This allows you to reimburse your nanny, tax-free, for the cost of individual health insurance premiums and other medical expenses, up to an annual limit.
- You can offer a monthly stipend, but those are likely considered taxable income.
Discretionary Benefits (Long-Term Investment)
Offering these benefits demonstrates a commitment to your nanny’s professional growth and overall well-being, which fosters a long-term working relationship.
- Annual Bonus: A great way to show appreciation for hard work, often amounting to one to two weeks of extra pay, typically given around the holidays or the employee’s work anniversary.
- Continuing Education: Offering to cover the cost of relevant courses in early childhood development, or even to attend a childcare-focused conference, shows you view your nanny as a valued professional, and your children will benefit from this.
- Extra Perks: Consider things that hold value for the nanny, such as adding them to your family gym membership or offering occasional perks like the use of a family vacation property during an off-season.
Legal Obligation: What is Required?
It is essential to recognize that U.S. federal law does not mandate household employers to offer benefits such as paid vacation, sick leave, or health insurance. However, as noted, many states, counties, and cities have enacted local laws that mandate paid sick leave or paid time off.
Before finalizing any contract, verify your state and local labor laws to ensure compliance with any mandatory requirements. Even when not legally required, offering a strong benefits package is the best way to secure and retain an exceptional nanny. For more information on what benefits to provide, call us at (800) 929-9213 or book a complimentary, no-obligation consultation.
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