Monday, July 21, 2014

How to Hire and Pay your Child's Caregiver

If you live in the Washington Metro area, I don't need to tell you how difficult it is to find child care for children under 3. I also don't need to tell you how expensive it is.

In our case, I called three different day care centers the morning I found out I was pregnant. The waitlist for each location would extend far beyond my maternity leave.  This mean that I knew that I would have to seek out alternatives to a group child care setting (nanny share, home day care, in-home nanny).  After taking into account our different needs, my husband and I decided to hire a nanny. 

We soon learned that finding and securing in-home childcare is a bit more difficult than going the day care route.  You are responsible for making sure your child is in the care of a trustworthy and dependable person.  You also have to take on the responsibilities that other employers have which means that you need to set up your own systems so that you can properly manage this employee. 

Here is a guide that I put together based on my experiences of hiring and employing our nanny.   

  1. Decide on What you Need

    • Budget: In the United States, childcare is typically your second highest expenditure after housing.  Figure out how much you think you can afford to pay hourly and don't forget about taxes, insurance and other costs. 
    • Hours: Do you need a full time caregiver? Will you need the caregiver to work on weekends, or weeknights?  Will you need overnight help? 
    • Types of Responsibilities:  Do you want the caregiver to perform housekeeping duties? Will driving be required?  How about cooking?
    • Type of Person:  What do you envision this person to be like?  Are you looking for Alice, Mr. Belvedere or maybe the Nanny? Do you want someone with a lot of experience with children? Do you want someone who is outgoing?  Do you want this person to be like a member of the family?  

  2. The Search

    • After you figure out what you are looking for, it's time to be strategic about looking for the person that you are entrusting your child to.
    • People you know: Tell your friends, family and coworkers you are searching for a nanny.  Childcare is fluid and situations often change, so people with children are often the first people who know when a friend is moving or when someone is looking for work.   
    • Neighborhood Listserves: Get yourself on every neighborhood listserve possible.  Employers often post ads for their employees, sometimes you might know that person listing the job. 
    • Online.  We didn't hire a nanny from but we did interview several that we found on the site. 

  3. Hiring and Screening

    • Interviews: You owe it to yourself and your child to interview a few people.  If possible see how they do holding and interacting with your child. 
    • References: Be sure to call everyone on that list and confirm their identities.  This is why knowing a previous employer is helpful.  If you find the references don’t check out or you feel something is off, this is your first red flag. 
    • A Background Check:  Background checks simply tell you the facts about a potential employee.  You can find out about driving and arrest records.  There are firms that can run these checks for you, we used Sitter City but there are other companies out there. 
  4. Payroll and Record Keeping
    • If you pay a domestic employee more than $1,900 in a calendar year, you are required to withhold social security, and Medicare as well as any other state obligations like unemployment insurance. 
    • The easiest thing to do is hire a payroll company, we currently use Breedlove, but there are others.  If you want to do this on your own then IRS Publication 926 will provide you with information on what you need to do. 
    • The key things you need to do are:
      1. Set up a Federal Employee Identification Number (EIN). You can obtain your Federal EIN onnline (

      2. Verify that your employee is eligible to work in the United States. Fill out federal Form I-9 from the United States Citizenship and Immigration Services.

      3. Find out what your local and state requirements are.   
  5. Insurance

    • Call your insurance company and let them know you have an employee that will be working inside your home.  They should be able to expand your homeowners or rental polcies to cover that employee.
    • Some employees require health insurance.  Talk through this prior to the start date. 
  6. A Contract
    • A contract between you and your child's caregiver is probably non-bining.  The benefit to having one is that it spells out the expections both the employer and employee have.  If you disagree on vacation or salary, you always have a document to go back to.

  7. Onboarding
    • If you can, have a provisional period where either you or your partner is on hand to see how.  Once you return to work do spot checks.  Come home for lunch, or come home early.  Stick around in the morning.  Trust your instincts.
    • If the nanny you hired requires additioanl training (i.e. infant CPR) be sure to pay for your employee to receive this training.   

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