Hiring a nanny is gaining popularity as the cost of child care centres increases, and families with two or more children find that having a nanny is a cost-effective and time-saving option. Below, we look at the legal issues you should consider when looking to hire a nanny.

1.    Document your Relationship

Many families don’t bother formally documenting their relationship with their nanny. This is a mistake. Your nanny is taking care of your children – the least you can do is document the legal relationship you have with him or her!

2.    Contractor or Employee

It is extremely common for families to pay their nanny an hourly rate without bothering with superannuation, PAYG tax, and other tax matters. Often this happens because the nanny advises the family that they have an ABN and are working as an independent contractor. Unfortunately, this is not an approach you should take.

The ATO sets out a number of rules which can be used to determine whether a nanny is an Employee or a Contractor. A nanny will typically be considered an employee if he or she:

(i)     Is paid for time worked;

(ii)   Isn’t responsible for providing the materials or equipment required to do their job;

(iii)   Must perform the duties of their position;

(iv)  Agrees to provide their personal services; and

(v)  Works hours set by agreement.

It’s clear that based on the above rules, the ATO will consider your nanny an employee. After all, you don’t want your nanny to be setting his or her own work hours!

3.    Employment Contract

Consequently, you’ll need an Employment Contract to document the terms and conditions of your nanny’s employment. Your starting point should be an Employment Contract in line with the National Employment Standards and conditions as set out by Fair Work Australia. There are a number of clear advantages to having a valid and binding Employment Contract with your nanny, including:

  1. Protecting you from unfair dismissal claims (your Employment Contract will allow you to terminate your nanny’s employment for misconduct).
  2. Ensuring that he or she maintains your family’s confidentiality (you can include in a clause preventing your nanny for posting on social networks etc.)
  3. Ensuring that you provide a set notice period (meaning you’re not rushing around looking for another nanny if your current one resigns abruptly!)
  4. Allowing you to confirm the nanny’s suitability through a probation period.

It’s important that before you create your Employment Contract, you decide whether you want to employ your nanny on a full-time, part-time or casual basis. Nannies may fall under the Miscellaneous Award 2010, and so it’s important to comply with the award’s minimum. You will also need to use an “award” employment contract.

4.    Work Eligibility

It’s important to make sure that your nanny can legally work in Australia. You should ask for either proof of citizenship, residency or visa.

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Hiring a nanny is an important step, and you should make sure you hire on a legally sound basis. Do you have any questions about drafting your nanny’s employment contract? Get in touch and ask one of our employment lawyers on 1300 544 755.

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