Dodgy nanny employment practices

[butadream]

We've just advertised for a nanny and TBH [naive emoticon] I'm shocked at how many seem to be exploited at the moment.

We've seen quite a few CVs from Romanians, Bulgarians and Turkish people who are "self-employed" nannies - but a nanny is always an employee under UK law so if they are "self-employed" then the family employing them at the moment is carrying out tax avoidance. I'm also pretty sure it's against immigration rules (well, it is for Romania and Bulgaria as I know they are "A2" European countries, I don't know quite what the position is for Turkey) unless they have a visa that doesn't just relate to their nationality.

We've also seen quite a few Phillippine applicants with and without British passports who are working as "nanny housekeepers" with apparently huge workloads and I'll bet not much pay.

From the applicants we've seen it seems quite common practice to be a dodgy employer even though you'd imagine most nanny employers have responsible jobs.

Must be tough for real nannies to find a decent employer if the black market in childcare is so huge.

If I were HMRC I think I'd do an advertising sting with the police (if that's legal) and fine all these "employers" to the hilt.

Thanks mranchovy, that's what I thought, based on the advice I got from the payroll service, and that's the p46 I have from her.

But I don't understand how to distinguish between a net pay and gross pay contract when what I pay her doesn't take her (or me) into a level of pay where this distinction would be effective - she doesn't earn enough (with me) for NI and tax to be an issue, so what she earns is both gross and net, if you see what I mean,

There are plenty of fab foreign nannies who are perfectly qualified to be my nanny. I don't actively seek forgeign nannies, but I seem to end up with them every time.

It does not necessarily follow that they are are taken advantage of. And they are also not substandard to their British counterparts.

Isn't this what being part of the EU is all about?

mranchovy - I am certain it is an employers responsibility to check that someone is not working for more than the 48 hours (collectievly) unless the person has opted out of the working time directive - even if some of those hours are being done for another employer

Treeesa I was explaining the position from a tax/NI point of view', but to cover the WTR aspect:

Workers 'employed as a domestic servant in a private household' (unfortunate and outdated wording, but this does include nannies) are exempt from the maximum weekly working time provisions of the Working Time Regulations.

The more general situation is complicated: it is now sometimes held to be best practice for an employer to take into account other employments when looking at the maximum weekly working time, but there are real practical difficulties in doing so, and the legal basis for this is IMHO uncertain.

maraisfrance a net pay contract would say something like:

"The employer shall pay the employee by way of remuneration such sum as shall, after deduction of Income Tax and National Insurance, result in a net payment to the employer of £80 per week."

thanks mranchovy - yes I guess my example in the NHS is a completely different case. It is still a burning issue for some hospitals and trusts so there'salwaysthingsflying around about it.

Going back to nannies - I find it strange and a bit antiquated in this day that a nanny is classed as a domestic servant even when they are living out?

mranchovy - so if my contract with our ASN says simply, 'We've agreed a maximum working week of 10 hours and I will pay you £90 a week,' that is a gross pay contract and I wouldn't be leaving myself open to subsequent problems with NI/tax issues?

MrA - is IMHO a valid legal disclaimer

Oops I'll try that again, with better grammar too:

"The employer shall pay the employee by way of remuneration such sum as shall result, after deduction of Income Tax and National Insurance, in a net payment to the employee of £80 per week."

Yes maraisfrance, that is a normal gross pay agreement and as long as you have that signed P46 with box A or B ticked HMRC cannot ask you for anything more.

Ah Treeesa, the situation in the NHS is a special one because one person may have more than one contract of employment covering essentially the same role - perrhaps with two different trusts (possibly acting on their own account, or possibly acting as agent for the Secretary of State for Health or whatever other statutory legal entities might exist - like I said, it is complicated).

In this case it may well be reasonable to expect the employers, possibly acting through a single head of department covering the two jobs, to take account of the total working hours.

A similar situation exists in schools where although the individual Governing Bodies are considered in some respects to be independent employers, the reality may be that there is only one job.

Actually maraisfrance, to totally cover all eventualities...

If the nanny took another job, earning say £300 for 35 hours a week she may well want her tax allowance to be applied to that job. She would have to write to her new employer's tax office giving them your details. The new tax office would then contact you, possibly saying 'why aren't you registered as an employer' until you point out that she is your only employee, earns less than the the threshold and had no other job when she started with you.

They may then require you to register as an employer, issue you with a tax code for her and require you to operate PAYE, which would be a real pain for such a small amount (you could use the words 'disproportionate regulatory burden' if you wanted to get grumpy with them). Now if you had a net contract, this would be bad because you would have agreed to increase her salary so that she still got £90 net - this could cost you an extra £23 a week! But as you haven't got a net payment, instead there would be roughly £18 tax to deduct from her salary.

So in this worst case, you would have to run a payroll or get an agent to do it for you (costing from £100 a year) but you wouldn't otherwise be worse off and, importantly, you don't have to do anything until HMRC contact you.

Bless you mranchovy, thank you for the advice! I really, really do not want to be a rip-off sleazy employer, but neither do I want to pay a payroll service and become a formal employer unless I have to. I was going to sign up with a payroll service, just because I was scared of putting a foot wrong (to be fair, the guy at the service said, 'Look, it's really not necessary, but if you want peace of mind, I'll send you the P46 and you're covered.,)

You are a very nice, helpful person. Thank you.

Considering hiring a nanny who is bulgarian. She has a yellow card meaning she is self employed. She has worked as a nanny before but I want to make sure that she is a legit employee. I think the yellow card is not sufficient.
Do I have to register as an employer + pay taxes as an employer? Does she need additionnal paper from Home Office?