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Mutually agreed terms, but not lawful(46 Posts)
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.
Couldn't you lower the salary, or are you already talking minimum wage?
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?
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.
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.
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.
She is also British, not that it would change anything to me, but just so you know.
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..
Oh and not definite but it would surely be a contract type thing so should cover you?
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.
I haven't found anything about that in all the research I've done. Does anyone know?
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.
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?
I get a pay rise in 6 months due to expected promotion
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).
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?
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.
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.
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.
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!
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.
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.
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.
Oops, sorry, should probably have looked that up first since you'd already said that it has to be paid celine!
What about if someone was to volunteer to look after someone else's children for free, and that person just paid their expenses? Like if they were live-in, and they were provided bed and board and a maybe a bit of spending money but not actually paid a wage? I'm not saying the OP should do this, just hypothetically, would that be legal?
Or if they weren't live-in, and their travel and meals expenses were paid or something.
catlady leaving aside the exploitation problems, if it is a voluntary role then they could at any time stop providing the service with no notice and the person having not recourse for that. As in they could just stop turning up one morning and never even say why, and no damages would be payable.
It sounds a bit strange. Do you know shes ok with children? It all sounds a bit dodgy. Dont nannies have to be CRB checked? I can see this leading to potential problems.
You can't afford a nanny, so don't hire one.
What you are proposing is exploitative and illegal and no written agreement will cover you.
What happens if the nanny wanted/is claiming benefits? They may be needing to work (not volunteer) a certain number of hours a week.
If she wanted a volunteer role could she not volunteer for ALL the hours, so no pay at all? That is not what she is offering, so she needs pay for some reason, why? It seems to me to be that she needs pay but is not that bothered about the amount of pay. Bit odd?
To me this sounds highly illegal and the ex nursery worker sounds desperate
Who would really take on a job at nmw and then from that megre salary want to pay out costs like employers ni ( which I do think should be banned - why should people who employ a nanny pay twice?)
Yes it's a privilege to be able to take own child to work - but are they so few manny jobs in your area that she is willing to lose her rights to holiday and sickness (even ssp) and some of her salary to work for you?
Many girls leave nursery to become nannies and sure they would be looking at least £7gross for their first job
I think you need to use a cm if that's all you can afford op and not get tangled up into this situation
Just to be clear, under the arrangement I propose she will be employed for X hours per week, and will be entitled to at least 5.6 weeks paid annual leave, and (subject to the normal qualifying conditions), Statutory Sick Pay, Maternity Leave, Statutory Maternity Pay, the right not to be unfairly dismissed and all the other rights that attach to employment.
I suggest that the contracted hours should be for the full period required Monday to Thursday. You could write in to the employment contract that any arrangements for overtime will be made in writing.
On Fridays the person that is the employee is free to do whatever they want: it would help to emphasise that any arrangements made for this day are separate from the contract of employment if they are as different as possible: perhaps she could look after the children at her house that day?
There would obviously be a risk that the employee could claim that the arrangements for Fridays are a sham and this time should be construed as hours worked under the contract of employment, and the employer would need to assess this risk.
I am imagining a conversation with HMRC where the op has to explain that she wasn't evading tax and ni because the nanny is volunteering for 15 hours per week...
"well, you see, she works 25 hours a week as normal and of course I pay her properly. Then she does 15 hours as a volunteer... erm, yes well it's hard to say which are voluntary exactly and which are paid... erm, yes she does exactly the same work for both" <<hmrc throws the book at op>> <<reports to NMW who also throw book>> <<nanny tootles off to employment tribunal and claims>>
The legalities are almost irrelevant though. Who wants to be involved in such exploitation?
What about finding another family to participate in a nanny share where you both employ her, together paying minimum wage and the associated benefits (incl. hols, etc.).
I sympathise with you. Childcare should be tax deuctible, making it affordable for you to work and employ childcare legally. But, it isn't...
I have agreed a contract with her whereby I pay her her net salary after I pay her tax and NI (as advised by the payroll company) and she will qualify for SSP and 28 days paid annual leave. She works for slightly less than the minimum wage but it is within the limits permitted once the £33 or so a week is taken off for the fact that I provide accommodation (the guest bedroom is now officially her bedroom and where her kids cot will be set up). It is up to her whether she voluntarily pays me back the employers NI. If she doesn't then so be it and I will just have to live on less somehow and know the trust/verbal agreement element has failed. I'm not going to get her to agree it in writing, as that may be illegal. The above all seems fine to me. She has said that she will get herself Ofsted registered in the next three months so that I can use childcare vouchers. That is also written into the contract.
It may come back to bite me if she waltzes off for the next month on annual leave or has lots of sick pay, but she really doesn't seem like that to me and she's serious about being a nanny so wants a good CV. We have written into the contract that the remuneration will be reviewed in 6 months.
Any other advice gratefully received but please don't slate me as you haven't met her and this set up benefits both of us. The only other thing I need to check before she starts is that my house insurance covers her. It's specifically written into her contract that she is responsible for her sons safety at my house, as I figured most policies only cover 'domestic employees' and not their offspring.
A contract does not have to be in writing for it to be a contract and/or unlawful.
I cannot believe you are expecting her to pay back the employer's NI when you're not even paying NMW with that dodgy bedroom business. The reduction is for accommodation, not use of a bedroom during working hours.
So far I've counted at least 3 breaches of employment legislation, just off the top of my head, if you count tax evasion.
Having a bedroom during working hours is not the same as living in - therefore the fact you pay less the the nmw is illegal
The paying back employers ni is dodgy
You say she is not desperate but that's all I read into the situation - why else would she agree to these terms?
All exploitative employers can claim that their exploitation suits the enoyee they're exploiting.
That's how it works - people only agree to be exploited because there is some advantage (however derisory) for them.
We have employment legislation specifically to stop people like you making arrangements such as these.
You think getting agreement from her in writing that she will pay back the NI might be illegal - that's not the only thing that is illegal in this scenario! She is not live-in so you cannot charge her for accommodation. Dress it up whatever way you like, you are paying her less than NMW with an implicit agreement that she is going to hand even more of it back to you each week/month. What was agreed about who would pay the payroll bureau as she had also offered to pay that?
On a slightly different note, you mentioned net pay in your last post, hopefully you have agreed a gross and not net salary with her in her contract?
The employee is choosing not to occupy the provided accommodation outside of working hours. That I believe is lawful, I think the accomodation only has to be provided, not that the person actually occupies it.
House insurance varies, not all policies provide Employers Liability, so do check the fine print. There may also be some exclusions for main part of contents insurance policy, such as theft by domestic staff (think this came up recently on a Moneybox call-in, thus why I am remembering it).
Really nick? Surely that would mean that every family (if had space) could offer a bedroom and make the job live in and thus not havin to pay nmw - and then say the nanny didnt accept/want it and therefore is live out iyswim but still paying a live in salary
I am not paying under NMW under the fact that I'm providing accommodation, I'm using the £4.82 or something per day that you can take off if accommodation is offered.
From payefornannies.co.uk : Employers should also note that the regulations relating to the National Minimum Wage (for nannies who are NOT living as part of the family) are very strict in relation to the amount that can be "offset" in respect of food and accommodation provided, if this reduces pay below that set out in the regulations. A maximum of £4.82 (gross) for each day accommodation is provided may be offset against the gross wage for the purposes of calculating if the National Minimum Wage regulations are being observed (£33.74 per seven day week).
I'll ask whether she wants to make any voluntary contributions to the activities/outings kitty. That thing about verbal exchanges being contracts? Where are the borders to that i.e. I say I'll be there in 10 min and it takes me 20min, can the person waiting take me to court?? Just interested really because if verbal contracts are legally binding, why do people ask for deposits? Surely they can sue if you don't do what you said you would.
Verbal contracts are as legally-binding as written ones, at least in Scotland. But, as the saying goes, "they're worth as much as the paper they're written on", ie, difficult/impossible to prove.
Why doesn't she become self employed. She can then bill you and also become an ofsted registered home child Carer.
If she's working in the OP's home as a nanny, she can't be self-employed.
HMRC aren't that daft.
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