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Mutually agreed terms, but not lawful

(46 Posts)
katieks Wed 06-Feb-13 22:24:58

Hi, I'm looking into hiring a nanny for the first time. She has never worked as a nanny before. Initially we met up and discussed initial duties, pay, etc. Because my research after this initial meeting and discussion showed that having a nanny was just way too expensive once I factored in all my extra costs, I told her that this was the reason I couldn't hire her, rather than her being unsuitable for the job. She replied saying that she would pay the employers NI contributions, didn't expect sick pay or paid annual leave, etc. All of this sounds great for me, but I'm worried about the legal aspect. I'd love to hire her, and she's keen for the job. Does anyone know whether if I get her agreements in writing, will that cover me legally? P.S. We did plan to have a review at 6 months so that if things are working well, I would increase pay, benefits, etc.

nannynick Wed 06-Feb-13 22:32:12

Couldn't you lower the salary, or are you already talking minimum wage?

OutragedFromLeeds Wed 06-Feb-13 22:35:32

I can't imagine you would be allowed to do that, imagine the scope for exploitation if it was legal to agree to forfeit all your rights.

Why is she so desperate to work for you? Is it because she can't get a job anywhere else? Is that someone you want to leave your baby with?

katieks Wed 06-Feb-13 22:36:32

Already minimum wage which sounds bad but the amount of hours means I can't otherwise and she gets to bring her son with her.

katieks Wed 06-Feb-13 22:38:25

She's not desperate, she's keen to get nannying experience on her CV. I would completely trust her with my kids.
I've made it clear to her that I don't want her to feel taken advantage of and made it clear that it would be up to her.

katieks Wed 06-Feb-13 22:40:09

BTW, in case you are all thinking 'cruel woman exploiting clueless foreigner', this is an ex-nursery worker who trained as a nurse but wants to look after her own son (along with other kids) and has already looked into, and discounted, the childminding option.

katieks Wed 06-Feb-13 22:40:46

She is also British, not that it would change anything to me, but just so you know.

Locketjuice Wed 06-Feb-13 22:45:48

Hmm I would want it in writing... Seems all a bit off the top of her head .. Like ohh no don't worry about sick pay etc when in reality she would (possibly,highly likely) need it especially with her own children to support..

Locketjuice Wed 06-Feb-13 22:46:44

Oh and not definite but it would surely be a contract type thing so should cover you?

redandwhitesprinkles Wed 06-Feb-13 22:53:31

Surely the fact she is bringing her own child would impact on pay-even at min wage? What other min wage job would you be allowed to take your child? How about you pay her more but then she pays you some sort of child are costs? Then tax and ni would be in order but she can bring her child.

katieks Wed 06-Feb-13 22:56:09

I haven't found anything about that in all the research I've done. Does anyone know?

fraktion Wed 06-Feb-13 23:16:32

You can't do that - those are basic rights enshrined in law. You have to pay min wage, you as the employer have to cover deductions. The fact she brings her own child is a perk, you can't charge her for looking after her child, unless you got around it by her giving you a contribution to the food her child eats etc, but that's really pushing it.

You might think now that she wouldn't turn around and claim but you can never, ever be sure and I wouldn't personally put myself in a position as unclear as that.

annh Wed 06-Feb-13 23:25:20

It is not up to the employee to determine her employment status, if she is working for you on fixed days for fixed hours then she is your employee and you must pay tax and NI on her behalf. It doesn't matter what you have between you in writing, if you are caught HMRC will be coming after you as the employer and the fines are hefty. Nanny wages are usually quite a bit above minimum wage so it is suspicious that she is so desperate for experience that she is willing to compromise that much. As an example, I have paid nannies with their own children the equivalent of £8 per hour and several nannies have wanted more than that even with child. So unless you are in a particularly isolated part of the country, I would think she should be able to get work at a higher salary.

On the one hand you say you can't pay her any more but on the other say that you will increase her salary after 6 months if things work out. If you can afford it them can't you pay her tax/NI now instead?

katieks Wed 06-Feb-13 23:28:16

I get a pay rise in 6 months due to expected promotion

katieks Wed 06-Feb-13 23:29:32

I will pay her tax and NI, she has offered to 'reimburse' me for the employers NI and the fees to have the payroll done (I don't have the time or expertise to do that myself).

OutragedFromLeeds Wed 06-Feb-13 23:30:34

She wants a job with minimum wage pay and without benefits she is legally entitled to? Sounds pretty desperate to me.

Is she suggesting that you pay her cash in hand or would you pay her tax/NI?

Is she Ofsted registered? Have you looked into childcare vouchers?

OutragedFromLeeds Wed 06-Feb-13 23:31:08

x-post

katieks Wed 06-Feb-13 23:39:25

She is willing to become Ofsted registered, so that I could use Childcare vouchers. Basically, I explained to her that she is great, but much more expensive than a childminder (which I can afford) and therefore I can't hire her. She came back with her suggestions to make herself more 'competitive'.

Not cash in had. I'd pay her tax and NI and pay her net pay. She then said she'd give me back the equivalent to what I'd pay in employers NI. She'll be able to log on and see the accounts so that she knew. I may be taking a risk if she didn't pay this back, but I think she will. She just wants the opportunity and I don't want to deny her it, when she's quite willing to do all she can to help me and make her hire her.

katieks Wed 06-Feb-13 23:40:48

The contract would be due reviewing in August and she's got three days holiday planned before then which I'd just pay her for.

annh Wed 06-Feb-13 23:46:36

So she is going to hand you back (what is the rate - 12%?) of her minimum wage salary each month? Surely this cannot be legal, we need Mr Anchovy to come along and tell us? Either way, this "scheme" sounds morally dubious to me.

MrAnchovy Thu 07-Feb-13 01:27:20

I can understand the problem, being able to bring your own child to work and look after them alongside a child or children (how many?) you are paid to look after is a HUGE benefit, worth IMHO 30-50% of salary. If you are in an area where wages are not high (where are you?), £6ph for a NWOC may be a good deal - but it is less than the NMW.

An employee cannot "opt out" of the NMW even if they want to, but a better way to make a legal contract fit what seems to be the agreement in practice would be to contract for fewer hours at the NMW or more. The nanny would then be free to volunteer for the additional hours - she could not work these additional hours as unpaid overtime as the overall rate including overtime cannot fall below NMW, and she could not be paid ANYTHING for this time otherwise it would count as part of the employment. As she would be volunteering there would be no way to require her to work additional hours, but as the whole arrangement depends on willingness and trust on both sides this should not be a problem.

Much better than paying additional employers and employees NI and tax - for every £1 that the nanny paid you back, an additional 67p would go to HMRC!

CelineMcBean Thu 07-Feb-13 02:07:39

I disagree about the volunteering to do unpaid overtime. That's going to breach the NMW Act. There's a massive difference between staying a few minutes over as a one off and actually making an arrangement to work unpaid. It just looks like a way of trying to dodge the law - which it is and so is unlawful.

You must also pay holidays (working time regulations) and statutory pay and benefits like sick although you can claim the cost back.

Op you should pop over to Employment Issues and ask there. I strongly suspect the regs will agree with what I've just said.

catladycourtney1 Thu 07-Feb-13 02:30:21

I would be very dubious about the tax and NI thing - I would imagine it's not legal, and so if you draw up a written agreement for it, and then things turn sour, she could show that agreement to whoever the relevant authorities are and make out that you were exploiting her or something, as essentially you're not paying her minimum wage.

I don't think you have to pay sick pay or annual leave, although you do have to grant her a certain amount of annual leave.

I was going to suggest that you contract her a certain amount of hours, and let her volunteer for the rest, as MrAnchovy said, but I'm not sure about the legality of this. Surely if someone wants to volunteer, they can? Like work experience?

As you can probably see, I'm by no means certain about any of this, you'd be better off asking someone with experience in these kinds of matters.

Can't she be a childminder instead, and look after your dc in her own home with her own? Surely that would be easier for her, and cheaper for you. And probably look better on her CV, if anything, since childminders have to be trained and vetted, while nannies don't.

CelineMcBean Thu 07-Feb-13 02:58:07

Well i do know and annual leave has to be paid as per the Working Time Regulations. As do all other statutory pay and benefits (statutory means legally entitled to).

Pertinent bit of NMW legislation here: www.legislation.gov.uk/ukpga/1998/39/section/31 either she's working at gets paid or she's not working.

Op you could possibly get round this if she was live in. Different rules apply for domestic staff that live in.

CelineMcBean Thu 07-Feb-13 03:04:11

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