[Editor's Note: The following post was submitted by regular reader and occasional contributor, Dr. Matthew Pirotte, MD, FACEP, an Assistant Residency Director for the Northwestern Memorial Hospital Emergency Medicine Residency Program. You can follow him on Twitter @ MJP_MD. We have no financial relationship.]
Many couples will end up paying for childcare in one form or another. This is especially true for households where both spouses are working and almost certainly true for dual physician households. You love your little bundle of joy — but you gotta go to work. At physician levels of income, most people avoid the second income trap and especially in two physician homes it usually makes financial sense for both parents to work. If you’re lucky enough to have a great parent-in-law who wants to come over and take care of things then stop reading now and go study how you set your portfolio. Daycare is an option, but many daycare centers are not open at 5 am when an emergency doc is headed in for her 6 am shift. Many busy docs will find themselves hiring a nanny to care for their kids. Here are some tips and tricks my anesthesiologist wife and I learned on our own journey.
8 Tips for Hiring a Nanny
1) Follow IRS rules and make the nanny an employee
Many docs pay their nanny in cash. This is a bad idea and clearly not consistent with IRS rules. If you pay a domestic employee more than $2100 a year the IRS says you need to treat them like an employee, not a contractor. As strange as it sounds if you have a cleaning lady for $100 twice a month the IRS says very clearly that you should not just be using Venmo. Certainly, for a nanny making what you hope is a living wage you’re going to need to do this “over the table.” You will need an Employer Identification Number (easy to get from the IRS) and a way to calculate payroll. You’ll need to produce an I9 form proving that the nanny is eligible to work in the United States. You will be responsible for employer taxes and unemployment insurance. You will need to file a Schedule H with the IRS. None of this is particularly complicated but it all needs to be done and there can be consequences for those who ignore these rules. We use a company that just deducts from our checking, figures it all out, cuts our nanny a paycheck with a paystub and retains all of the tax information (I have no financial relationship with this company other than being a client).
2) Insist on a nanny who will also follow the tax rules
While a wad of cash every 2 weeks is a good idea for domestic employees looking to maximize their take-home pay, it is not legal. These cash arrangements are bad for the nanny if they are trying to build employment history, get injured on the job, file for unemployment assistance, or want to collect a nice Social Security check in retirement. We met one great candidate who was looking for a cash job because she did not have a work visa. As two people with professional licenses, we did not want to get involved in a situation like that and passed on this otherwise lovely person.
3) Use a reputable source to find nannies online
Some of us will be lucky enough to get a great person through word of mouth at your hospital, office, church, or the like. Others will have to rely on the internet for help. Many sites like Care.com and SitterCity can perform background checks on the nannies they list. These seem to me to be the industry leaders. Both are good services and inexpensive to use. In some cities, there are nanny placement services although these can be fairly expensive. There also exist some higher-end websites and placement agencies. My personal experience with these is limited but I have friends who have used the services. The nannies coming through these services are the type who are going to perform full-service house management and have a gourmet dinner on the table when you get home in addition to having Junior in a clean romper. Expect to pay a significant premium if you enter these waters but for some very high-income doctors, this may be money well spent.
4) Be very clear about your needs in your online post
We have hired two nannies. For the first I wrote a fairly generic job post, 1 baby, looking for full-time work, etc. I was overwhelmed with responses and had to spend quite a bit of time sorting through and communicating with many applicants. When our first nanny moved away and we went back on the hunt I was much more explicit: we needed someone with full-time availability who had no side gigs interfering with the main job. We needed a dog-lover who was willing to do sick care, be paid through payroll, and to work shifting and somewhat crazy hours. I even posted a sample schedule as a “worst week scenario.” We got many fewer responses and most were more considered than before. This was a very large time saver for us.
5) Establish clear expectations and have a contract
Want your nanny to do dishes and household laundry? What about dog walking and grocery shopping? Will he or she be willing to work when your toddler is puking her brains out? These are all things to decide before the first day on the job. Simple nanny contracts are available online and you can edit these to suit your needs. Review by an attorney doesn’t seem to be necessary but would likely be relatively inexpensive. Be clear and straightforward, be as specific as possible. “Nanny will perform 3-5 household errands a week as requested” is far better than “Nanny to help as needed.” “Dishes done and countertops clean each day” is superior to “Light housekeeping expected.” Expect some negotiation especially if you are hiring an experienced nanny. It is better to that before work starts than to try to change gears in the middle of the race.
6) Think about a “salaried” position
Technically any domestic employee must be paid by the hour. With my shifting ED schedule and my wife’s long days in the OR, we needed someone full time and placed a high value on their not constantly trying to do side gigs. For this reason, we worked out an arrangement where our nanny would be guaranteed 40 hours pay a week regardless of hours worked. We agreed on a yearly salary and so while technically she is paid by the hour it is a simple math equation to arrive at her biweekly paycheck. If we have a light week and she works 25 hours she gets paid her full time “salary.” When we take a long trip she is still getting paid. On the flip side, we have asked that our nanny not expect overtime for a single 50-hour week scattered here and there if most of her weeks are at or under 40 hours.
[Update by author after publication: Some commenters have very correctly pointed out that employers cannot negotiate away overtime from nannies. In composing this piece I just should have left this sentence out because it is not reflective of what we are doing and those commenters are correct that it would be illegal if it were. You cannot “bank” hours to use them later and work hours for hourly workers cannot be averaged over several weeks to avoid paying overtime. I was trying to make a point about guaranteed hours and it did not come off well. What we actually do is guarantee hours for our nanny partly because we want to make sure we have her when we need her and party because see #8 below.]
We also made it clear up front that for a generous salary we expected to have first dibs on her time during the week. This has encouraged professionalism and buy-in on our nanny’s part; she is motivated to hold a job where she will get a steady paycheck even while we are overseas.
7) Consider a tech-savvy hire for ease and convenience
We do all of our scheduling through a shared google calendar with hours sketched out well in advance. This allows us to track hours and our nanny to plan her life. We also have a text message chain with our nanny that is a deluge of photos of our daughter and dog romping around various parks and playgrounds. Our nanny carries a credit card for household purchases rather than petty cash and we immediately reimburse her electronically for any expenses. All of the financials are online as well; our nanny experience is paperless and seamless. While there are surely many lovely people out there who do great child-care and are still using flip phones and pocket calendars, we enjoy the added convenience of our smartphone system.
8) Be a great boss
Life is hard for people who are trying to support themselves and their families on relatively low-wage jobs. While nannies are critical to many households, the average salary for a full-time nanny is below the national average. We wanted our nanny to feel that they had a fair compensation structure and great bosses and were willing to pay more than the absolute minimum rate out there. One question I asked nannies as I was interviewing was “what makes a great boss for you?” and “what makes a bad boss?” The most common thing I heard in the bad boss column was disrespect for the nanny as a person and an employee, one nanny I interviewed said she quit a job where she loved the kids because the dad “made it clear to me that he thought being a nanny was a joke.” Don’t be that guy. Be fair and communicative, provide schedules in advance, and consider being generous with tips and bonuses when someone does great work.
The right nanny makes your life work. There is nothing quite like getting home from a tough shift and seeing your baby giggling with delight as a caring, professional nanny sings and plays with her. If you put in the time to find the right person and arrive a fair employment agreement those salary checks you pay out will seem like some of the best money in your budget.
What has been your experience with hiring a nanny for your children? Do you have other tips to share with readers looking to hire a nanny? Comment below!