hiring a nanny – Page 2

Points to consider before signing a contract with your employee

Once you have decided to employ a nanny, and give them an offer letter, it is advisable to

include the key terms and conditions of the role, such as:

Job title,

Job description,

Days/hours of work,

Holiday entitlement,

Notice period,

Statutory payments,

Disciplinary and Grievance procedures

It is essential that all the terms and conditions of the employment are addressed in the form

of a contract of employment and this must be given to nanny to sign within 2 months of them

starting the position.

Once nanny accepts your offer of employment, you have entered into a legal arrangement,

(subject to satisfactory references) therefore the sooner a contract is drawn up between the

employer and the nanny, the better.

Qualifying Criteria for the Work Place Pension

Whether or not your nanny qualifies for the work place pension depends principally on your nanny’s age and their earnings. The new law requires every employer to automatically enrol workers into a work place pension scheme if they are aged between 22 and the State Pension Age, and earn over £10,000.00 per annum.

If nanny is automatically enrolled in a pension, they can opt-out up to 30 days after the initial set up has been completed and get a refund on the amounts which have been deducted from their salary. They must complete and return an opt-out form and inform their pension provider.

If your nanny does not qualify to be automatically enrolled they still have the right to join a work place pension. This is known as a Non-eligible job holder.

Non-eligible job holder is an employee who doesn’t have to be automatically enrolled into a work place pension, but can ask to be joined into a pension scheme if so wish. If they do, both the employer and the nanny will have to pay into the pension pot each month.

The minimum auto enrolment contribution rates are currently 8% of qualifying earnings. This is split between 3% which must be paid by the employer and 5% which must be paid by the employee.

DBS Check

The Disclosure and Barring Service (DBS) is a government body which processes criminal record checks that prevent unsuitable people from working with children and other vulnerable groups.

There are three types of checks –

Standard check shows spent and unspent convictions, cautions, reprimands and final warnings.

Enhanced check shows the same as standard and any information held by local police that’s considered relevant to the role.

Enhanced check with barred lists shows the same as enhanced check plus whether applicant is on the list of people on the list barred from doing the role.

These usually take around 8 weeks.

Cost of a DBS check –

Standard £26.00

Enhanced £44.00

Enhanced with Barred lists £44.00

SMP Statutory Maternity Pay

Holiday pay

Employees accrue holiday entitlement as normal throughout the maternity leave and this includes any bank holidays that may fall during that leave and this is a cost to the employer.

Any such holiday accrued is normally either taken or paid for at the end of the leave.

Antenatal classes

Employees are entitled to paid time off to attend these and except from the first appointment you can request proof of this.

If possible they should arrange these appointments at times she is not working although if full time employee this may not be possible.

Keeping in Touch Days

Employees are entitled up to 10 days classed as keeping in touch and any days worked are paid in addition to any paid SMP and is at a cost to the employer.

These days can be used for work and irrespective of the hours worked each day it is classed as a full day for Keeping in Touch purposes.

Pension

If employee contributing to pension when they go maternity leave their pension contributions will be based on the SMP paid, but the employers contributions need to remain at the same level they were on before the maternity leave started.

For example if the employers contribution was £15.00 then irrespective of the SMP paid the employers contribution would remain at the £15.00 throughout the maternity leave.

SSP Statutory Sick Pay

All nannies are entitled to Statutory Sick Pay (SSP), as long as they earn over the lower earnings limit of £118 a week and give you the correct notice.

SSP is paid to nannies on the 4^th consecutive working day off and the first 3 working days are classed as waiting days and any salary for these 3 days are paid at employers discretion, unless they have something specific in the contract regarding paid sickness.

If a nanny has more than one job then she is entitled to SSP from each employer should she qualify.

Nanny must provide a Doctor’s fit note if she is off sick for more than 7 days in a row, for first 7 days they can self-certify.

How much is SSP

For this tax year, 2019/20 SSP it is £94.25 per week. Nanny can get SSP up to 28 weeks.

As of the start of the 2014/15 tax year the Government abolished any compensation on SSP for small employers and this is now a cost to the employer.

Nannies do not qualify

If they have already had 28 weeks of SSP paid.

Have already taken 3 or more years ‘linked periods of sickness – where 4 or more days of sickness happen within 8 weeks of each other.

Receiving other statutory payments (SMP for example).

Nanny may be able to apply for Employment and Support Allowance (ESA) if she is not entitled to SSP with you or has had 28 weeks of SSP. In order to apply for this, you must give nanny a SSP1 form.

Nannies and Mobile Phones

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for parents and have created this content.

A lot of parents are becoming increasingly concerned regarding nannies and their use of mobile devices when they should be concentrating on their job, which of course is looking after the children in their care.

People generally, not just nannies, seem to spend a lot of their time on mobile devices whether texting friends or checking their social media apps.

Some parents are now putting a clause in the nanny contract limiting the amount of use a mobile phone or even supplying nanny with a work mobile phone and then nanny not permitted to use their personal mobile.

We would perhaps suggest erring on the side of caution as nanny may feel that if implemented you are not trusting them entirely.

Nanny-State Pension Age

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for parents and have created this content.

What happens when nanny reaches state pension age

If nanny reaches state pension age, she will then not have to pay employees NI, this then increases the amount of money she will then take home in her pocket if she is on a gross wage.

If nanny is on a net wage, then the employer will then get the benefit of employee then not paying NI and will then see a reduction in the overall total cost each pay period.

Nanny believes she has paid too much in tax

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for

parents and have created this content.

Parents, nanny may come to you as the employer, and claim she believes she has been

paying too much tax in either the current tax year or previous years.

If relating to previous tax years it is best for nanny to contact HMRC directly by writing to

them with an explanation of why she thinks she has paid too much tax and she should

enclose relevant P60’s for the tax years involved. If it is then the case that she has overpaid

tax in a previous year HMRC would then issue a cheque directly to her.

If nanny believes she is paying too much tax for the current tax year, it is advisable that she

first contacts the employers payroll provider, such as us here at payroll4nannies to see if

they can help or she will need to call HMRC direct on 0300 200 3300 and will need to quote

her national insurance number and have other personal information to hand. HMRC will

issue a revised tax code if incorrect to the employer and any tax then previously overpaid in

this tax year would be repaid through the employer.

Things to consider when employing a non UK nanny

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for

parents and have created this content.

It is important to make sure you take proper steps to make sure nanny can be employed

legally in the UK. If you do not you could face a £20,000 penalty or worst case scenario a 2

year prison sentence!

You must take a photocopy for identity check of a passport, birth certificate or national ID

card. We would always recommend you see an original version before taking a copy.

An EEA (European Economic Area), employers must check their right to work documents,

take a photocopy, and make sure they are from the EEA country.

For a more detailed guide:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_da

ta/file/441957/employers_guide_to_acceptable_right_to_work_documents_v5.pdf

Payment in Lieu of Notice (PILON)

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for

parents and have created this content.

Payment in lieu of notice or (PILON) is when a nanny has been terminated from employment

and not required to work her notice.

In nanny’s contract you can stipulate that nanny’s employment can be terminated by PILON

immediately and payment in lieu of her basic salary will be paid for the notice period, then

you will not need to pay benefits and extra costs that accrue during her notice period.

If in the contract PILON does not specify the pay for this period or no mention to PILON in

the contract, then you as an employer will need to pay benefits and extra costs for this

period.

Tax and national must be deducted from PILON.

In the case of gross misconduct, PILON is not normally paid to the nann