How to Attract and Retain a Good Nanny

1. Set Clear Expectations From The Beginning

• Create a thorough job description that outlines a typical day and the personality of your family

• Establish a contract (also referred to as a work agreement) at the time of hire.

  • Be willing to make adjustments to the work agreement or schedule as things arise. Just as you would like your nanny to be flexible at times they appreciate some flexibility from you as well.

• Kindly express the ground rules on how you like things done. This can said verbally, in the contract, or maybe less formally in the form of a “family fact sheet".

  • For example:

    • When the child is sleeping - Is this the time to get chores done around the house? Or is the welcome to take a break? There’s nothing worse than not knowing, or feeling like you will be judged for choosing to lounge on the couch during a particularly stressful day.

    • Laundry - Are there are certain items that should not go in the dryer that you would be upset if they were accidentally shrunk?

    • Cleaning - Is the nanny responsible for child’s dishes or for the entire household? Which common areas should be tidied up each day?

• Offer quarterly reviews or just check in from time to time to make sure your employee feels appreciated and any questions or concerns that they may have been withholding are addressed.

2. Offer Guaranteed Hours

• This is a MUST in the nanny world if you want a happy employee. Guaranteed hours apply when the employee is scheduled, is able to work, and the family chooses not to have him or her come in.

3. Provide A Family Credit Card for Job-Related Expenses

• When you hire a nanny, family assistant, or house manager, they will be running errands for you, taking children to activities that require admission, or taking children out to lunch. It’s important to discus upfront what the money should be used for and how to track expenses. Instead of making your employee carry around an envelope of cash or having them pay for big expenses from their own personal credit card and repaying them later it’s possible to add your employee as an authorized user to your credit or debit card.

4. Pay Your Employee Legally, “On The Books” Via Payroll

• Professional domestic staff understand the benefits of being paid legally as a W-2 employee. This takes a huge tax burden off of the employee, allows them to provide verifiable income to apply for any loans, and it helps you avoid fines and money owed in back-taxes.

5. Pay Overtime and Do Not “Bank” Hours

• Household employers in Illinois must pay overtime at 1.5 times the regular rate of pay after 40 hours of work in a calendar week. If your employee lives in your home, you do not have to pay overtime.

6. Offer Generous PTO, Sick Days, and Paid Vacation

• Chicago household employers are required to offer paid sick leave to their employees. Workers can accrue up to 5 days of paid sick days (40 hours) per year.

• According to Home Work Solutions, average PTO is 5-15 days, some of which can be scheduled at the family’s discretion.

• In addition to PTO, It is standard to offer 6 or more federal paid holidays. Typically, a paid holiday that falls on a Saturday is recognized on the prior Friday (paid, no work), and a holiday that falls on a Sunday is observed the following Monday. A family that needs their nanny to work on a day that would be an observed paid holiday should either pay him/her double time (for the actual work and for the holiday) OR negotiate a mutually acceptable alternate paid day off. (See end of this blog post for list of federal holidays)

7. Offer a Health Insurance Benefits Package, a Health Insurance Stipend, or a 401(k)

• If your employee is being paid legally they can purchase their own health insurance through the health insurance marketplace. You may choose to offer a healthcare stipend. This is a payment in addition to a salary that covers a portion or all of their monthly healthcare premium. It is also possible to enroll your employee in a healthcare plan of your own. HomePay offers a great article on this subject here. GTM Payroll Services lists some affordable and tax-friendly options aside from a healthcare stipend.

• There are also options to set up a retirement savings account.

8. Offer Bonuses and Raises

• Yearly bonuses are another benefit to reward your employee and keep them satisfied for the long-term. It is typical to pay 1-2 weeks salary as bonus or holiday pay.

• The average nanny raise is typically about 5-10% of his or her salary at the end of each year.

• Did you have a new baby or is your nanny now responsible for the care of an additional child? It is typical to pay your nanny about $2 dollars per additional child, or some parents choose to increase the nanny’s hourly rate by 1.2x their hourly pay. (Ex: If you nanny makes $20 per hour, they will be paid $24 for an additional child).

9. Offer Mileage Reimbursement

• In some states, Illinois included, if an employee uses their own car while on the job they are legally required to be reimbursed for mileage driven while working (in 2024 the rate is 67 cents per mile). Their commute to and from your home is not included. This is designed to cover the cost of gas, insurance, maintenance, and vehicle depreciation. Since the IRS does not deem mileage reimbursement as compensation, it is not taxable to you or your employee and the employee can file the reimbursement as a tax deduction.

10. Adhere to the “One Day of Rest in Seven” Act

• Under the Illinois One Day of Rest In Seven Act , a domestic worker is entitled to at least 24 consecutive hours of rest in every calendar week. If the employee voluntarily agrees to work on their day of rest, the employer must compensate the employee at the overtime rate for all hours worked that day. The day of rest should, whenever possible, coincide with the traditional day reserved by the domestic worker for religious worship. (Does not apply to part-time employees working less than 20 hours/week).

11. Provide Workers Compensation

• Illinois household employers are required to have workers compensation insurance if their employee works 40 or more hours per week for 13 weeks in a year. This act ensures that workers can cover medical expenses, lost wages, ongoing care costs if they are hurt on the job. According to Illinois.gov, “An employee who is injured during the time the employer was uninsured may sue the employer in civil court, where benefits are unlimited.”

Be sure to inform yourself of the Department of Labor’s Illinois Domestic Workers Bill of Rights , with a more easy to comprehend summary here.

When Should You Give Your Nanny a Raise?

Most nannies are accustomed to receiving a yearly raise of about 3-5% to adjust for inflation and to reflect the increased job duties they likely picked up throughout the year.

Nanny pay is determined by experience, eduction level, number of children they are responsible for, job duties, and how demanding their particular job is. Other things to consider that justify paying a nanny a higher wage include: Bi-lingual nanny teaching a child a second/third language, twins/multiples, helping with occupational or speech therapy, working with special needs children, and the ability to be flexible with scheduling.

Which Days Are Holidays for Nannies and Other Household Staff?

List of Federal Holidays:

• New Year’s Day (January 1)

• Inauguration Day (January 20 every fourth year)

• Birthday of Martin Luther King, Jr. (3rd Monday in January)

• Washington’s Birthday (3rd Monday in February)

• Memorial Day (last Monday in May)

• Juneteenth National Independence Day (June 19)

• Independence Day (July 4)

• Labor Day (1st Monday in September)

• Columbus Day (2nd Monday in October)

• Veterans Day (November 11)

• Thanksgiving Day (4th Thursday in November)

• Christmas Day (December 25)

8 Commonly Paid Holidays for Nannies and Household Staff:

New year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, Christmas Day

You’ve got enough on your plate in your day-to-day life — let us make your life easier by handling your unique household staffing needs.

If you are a family looking to hire a nanny, household employee or other home service, submit an application with My Household Managed.

If you are a professional nanny, house manager, or other household employee looking for a job, apply at My Household Managed.