Well, it works here in France - any domestic help (nanny, cleaner, gardener) has to be declared as a salaried employee (i.e. no cash in hand jobs, like in the UK), which means that as the employer you pay NI contributions etc, but get a 50% tax deduction in return.
In exchange, it means that the employee is now no longer officially unemployed, has sick/maternity cover, pension contributions etc.
Win/win, IMO!