Many people have busy schedules and require some assistance with their childcare. In some cases, they opt to hire a nanny and, thus, become an employer. In this situation, you will have certain employer obligations to meet, such as paying national insurance, paying tax and provision of a pension for the nanny.
What Are the Legal Obligations for the Employer?
The majority of an employer’s obligations involve complying with certain regulations. The most important of these obligations are noted below:
#1: Checking the Nanny’s Right to Work in the United Kingdom
It is vital that you review the individual’s legal right to work in the United Kingdom. Before any hiring of the nanny can take place, it is important to check all identification documents including a birth certificate, identity card and passport.
#2: Tax Contributions
As an employer, you will be responsible for payment and deduction of the nanny’s income tax contributions. It is your obligation to contact HMRC to first register as an employer and register a PAYE scheme. You will also need to maintain records of all payments you make as an employer for yourself and for the employee/nanny.
#3: The Pension
If the nanny is aged between 22 and state retirement age earning over £10,000 per annum, it is necessary to set up pensions for nannies. You will need to make a regular contribution to the pension scheme on a monthly basis according to the nanny’s gross salary.
#4: National Insurance Contributions
Employers are responsible for payment and deduction of the nanny’s national insurance contributions. National insurance contributions are payable on the employee’s salary if they earn above a specific threshold amount. Any contributions from the nanny or yourself will be calculated as a percentage of the employee’s earnings.
#5: Liability Insurance
When employing a nanny, it is essential that you obtain employer’s liability insurance. This insurance will provide you with coverage should the nanny become ill or sustain an injury at work. While you may be covered by other types of insurance policies, it is recommended that you check the policies very carefully to avoid any legal situations.
#6: The Employment Contract
It is necessary to issue a written agreement to the nanny before she begins work, or within two months of the start date. The contract must include details of the salary, work hours, holiday entitlement and a description of the work duties. If any details change in the employment contract, it needs to be agreed between the employer and employee.
#7: The Payslip
As an employer, you are required to give the nanny a monthly or weekly payslip. The payslip is a document reporting all earnings and deductions made.
#8: The National Minimum Wage
It is necessary to pay a nanny the minimum wage in the United Kingdom. However, it is likely that you will pay them more than this amount. On average, a live-in nanny earns £300 to £350 per week; whereas, day nannies charge more earning approximately £400 or £475 per week. It is important to note that the nanny will have salary expectations according to their experience, qualifications, skills and the duties to be fulfilled.
#9: Paid Annual Leave
Regardless of whether the employee is part or full-time, they are entitled to an equivalent of five weeks annual leave. The employer can opt whether or not to include bank holidays in this leave period. Holiday periods can be negotiated with the employee directly.
#10: The Termination Of Employment Notice
During the initial month of employment, a single week of notice for termination of the contract can be given by the nanny or you. After the first month, a one month period should be offered; however, this can be negotiated with the employer. It is essential, however, that the agreed upon notice period is clearly and carefully stated in the contract.
#11: The Maximum Working Hours
The maximum working hours an employee can work in the United Kingdom is no more than 48 hours per week. You cannot insist on the nanny working more than these hours, and this is known by law as the working time directive.
If the nanny is aged over 18, they may work more than the allotted 48 hours if a contract is signed. However, you cannot force her to sign the contract and she can change her mind as long as a week’s notice is provided.