The Oxford Dictionary defines a nanny as “a person, typically a woman, employed to look after a child in the employer’s own home.” The key word in this is “employed”. In every other area of life, when someone is employed they are paid according to their skills and qualifications, they have rights and obligations and they deserve to be treated with respect for the job that they do. On the other side an employer when seeking to fill a job will look for the best person available and will pay them commensurately. When it comes to looking after your children, this cannot be underestimated. They are after all your most precious asset and need the best care possible. So how come when it comes to nannies, some employers (parents) choose to throw all the usual rules of employment out of the window, deciding often to disregard / ignore any legal rights and obligations their employee might have? Even worse, they choose to treat them almost like slaves.
It is not uncommon to hear parents say that they want a nanny but want to “pay as little as possible for as much as possible”. This very often leads to a complete disregard for the legal minimum wage, which is currently £6.70 gross for adults over 21. From April 2016, the national living wage will be £7.20 gross an hour for workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under. It is also not unusual for employers of nannies to actively choose not to give their employees their legal annual holiday entitlement. Most workers who work a 5-day week must receive 28 days’ paid annual leave per year. This is calculated by multiplying a normal week (5 days) by the annual entitlement of 5.6 weeks. Even if a nanny is part time, he / she is entitled to a minimum of 5.6 weeks of paid holiday each year, although this may amount to fewer actual days of paid holiday than a full-time worker would get.
The above paragraph assumes that a nanny has even been employed. Many nannies are engaged on a self-employed basis, even though this is in 99% of cases illegal, meaning they are expected to pay their own tax and insurances, they are not entitled to holidays and they will not receive any sick or maternity pay. There are several tests that HMRC and / or an employment tribunal will look at but in short a nanny would need to be working for various different people, at non-regular times/days to be considered self-employed. The more regular the hours, the less likely he /she will be self-employed. The general rule is that nannies who work for one family are not self-employed and that even when working for two families it would be rare for a nanny to be self-employed. If the nanny did a mixture of work for many families such as some maternity nursing, and some short term temping, then perhaps they could be self-employed but they would have to convince HMRC that this was genuinely the case.
If a nanny is deemed to be employed, the burden of paying tax and national insurance contributions falls on the parent as the nanny’s employer. Failure to pay can lead to heavy financial penalties. HMRC has said that if it thinks parents have been deliberately evading tax then they not only will have to pay the tax due, but could also face a fine equivalent to 100% of the tax due – effectively doubling the amount paid. If parents have been part-paying tax and adding a cash sum on top, this is likely to indicate that they were aware of the rules, and HMRC is unlikely to be lenient. Similarly it has said individuals who officials believe are aware of the rules – such as accountants and barristers – will face criminal prosecution.
It is a well-known fact that childcare is expensive in the UK but many nannies have years of experience and have undertaken qualifications in childcare to prepare them for their chosen careers. Because that is what it is for them, a career. Just as a lawyer, doctor, engineer or teacher has studied and worked for a career goal, so have many nannies. They genuinely love children and are experts in what they do. Just because they work in your home and not in your office, does not diminish their role; in fact quite the opposite. Whether they are live-in or live-out, they are entitled to a private life, to be treated equally and fairly and be paid commensurately for their job. They do not deserve to be fired just because they have a local boyfriend that may distract them from their work or cause them potentially to leave their jobs in the future!
Being a nanny is a career and a profession and parents should recognize this. As a parent I would not seek to scrimp on the person looking after my child. I know that childcare is expensive but by not getting the right person, with the right qualifications and experience and paying them accordingly then the only person I am letting down is my child.