Should You Pay Your Nanny During COVID-19?

Many families and nannies are facing crisis right now when it comes to their jobs and their wallets. With CDC guidelines being updated daily and local guidance varying from city to city and from state to state, household employers are wondering if they should be paying their nannies who aren’t working during the pandemic and nannies are wondering if they’ll continue to be paid.

Here’s what we know.

According to nanny industry tax and payroll partners Homework Solutions, “The Fair Labor Standards Act (FLSA) does not require an employer to pay a non-exempt employee [nannies are classified as non-exempt and are covered under FLSA] for time not worked.  Bear in mind, however, that a family may have a legal obligation to keep paying employees because of an employment contract.” If a nanny and family have a contract in place, referring to that agreement and following the terms of that are agreement are essential.  

If, like many nannies, the nanny has a work agreement that guarantees minimum hours if she is able and willing to work, for example, she should still be paid. “If it is the family’s choice not to have the nanny come in and the nanny has a guaranteed pay benefit, this will come into play,” advises HomeWork Solutions.

If the nanny has no guarantee, however, she may wish to immediately file an unemployment claim if she finds herself out of work. An unemployment claim provides 40-70% income replacement when a worker’s employment ceases, even if employment ends due to a layoff that is no fault of the employees own, according to Homework Solutions. Employers must act quickly, however, in response to the state’s Department of Labor inquiry about the terms of the nanny’s job loss for nannies to quickly access this benefit.

And for nannies who are paid off the books? HomeWork Solutions issues caution. “If your nanny is being paid off the books, be very careful. Your nanny could still file for unemployment and you will become liable for all state and federal employment taxes. This includes the FICA taxes you did not deduct from her pay.”

For many families, however, they’ll want to continue to pay their nanny but due to the impacts of the pandemic, they find themselves in a position where paying their nanny while she is not working is simply not possible. Sue Downey, founder of NannyPalooza stresses the importance of finding mutually beneficial solutions during these times. “Now is the time that we should all look to mutually beneficial solutions and find ways to work together to meet everyone’s needs.” She encourages both nannies and families to think long-term as they consider their next steps. Downey cautions families to not end up a in position where they don’t pay their nanny now, only to find out that their nanny is not available later, when they really need him or her most. “Mutually beneficial planning is the best thing nannies and families can do,” according to Downey. “Even if parents can’t afford to keep their nanny on full-time or to pay 100%, they should consider what they can do, perhaps extending benefits or offering alternative hours or duties in the interim.”

Many families are also imposing restrictions on their nanny’s out of work activities as a condition of employment; however, families should be cautious in doing so.  Bob King of Legally Nanny advises that you can’t tell your nanny where she can and can’t go or what she can and can’t do while she’s off the clock. “While you cannot control your employee’s lawful off duty behavior, you do not need to continue to employ a nanny unless she adheres to reasonable expectations that you impose. For example, a family can tell a nanny that if you want to continue to work here, you must engage in activities that align with the CDC guidelines related to the Coronavirus,” says King.

So what’s the bottom line? Do what you can. Nannies have spent countless days taking care of the needs of the family they work for. Now families have the opportunity to take care of the needs of their nanny, too.