Finally, you’ve found the perfect nanny for your kids.
You’ve gone through the interviews, run the background checks, called the references and you’re ready to make an offer. Before you draw up the contract, there’s one thing left to do — it’s time to talk numbers.
But how do you determine a fair wage for this person whose workplace will be your home and whose job it will be to care for your loved ones while you’re away at your own job?
Whether you’re hiring a nanny, housekeeper or other domestic worker, committing to paying a fair wage contributes to a positive and respectful working environment. It shows your employee how much you value them and can be viewed as an investment on your part in the person who is taking care of the things you value most.
Here are six tips to help you determine a fair wage to pay your household employees.
1. Figure out what you can afford
To determine your budget, start by looking at your mortgage or rent, vehicle costs, household bills and other fixed expenses, and then compare your outgoing expenses against your full household income. If you need help creating your care budget, visit our free employer budget calculator at Care.com/HomePay. You can enter different hourly rates and see how it impacts your taxes and your employee’s take home pay — and see the tax breaks you’ll earn from paying legally.
2. Define the job responsibilities
Setting clear expectations from the outset is an important aspect of your employment agreement, as job responsibilities and a fair wage go hand-in-hand. If you’re hiring a nanny, will she be working full-time or part-time? How many kids will she care for? Will she be expected to perform housekeeping tasks in addition to child care? These and other variables should be factored into the hourly wages and spelled out in a mutually agreed-upon employment contract. Whenever the responsibilities change, like if you have a second child, then update the wages — and the contract — accordingly.
3. Consider the cost of living
When you commit to paying a fair wage to your household employees, you’re helping to make sure she has what she needs to support herself and her family. So, when calculating what constitutes a fair wage, be sure to consider the cost of living in your area. For example, in most major metropolitan areas, a living wage for caregivers and home attendants is around $15. To find out the going rate in your neighborhood, use our child care cost calculator.
4. Don’t forget about raises and overtime
Your household employees are professionals, and you should treat them as such. Part of that is budgeting for raises and overtime, which are reasonable expectations in a professional employment agreement. Prepare to pay an overtime rate (1.5 x the hourly wage) whenever your employee works more than 40 hours per week or eight hours per day. As you develop your budget, keep in mind that it’s fair practice to provide merit-based raises, especially when responsibilities increase or your caregiver receives new certifications. Lastly, at the very least you should be prepared to provide an annual cost of living (COLA) raise.
Learn more about the definition of Fair Pay and what MIT estimates as the living wage near you.
5. Provide paid time off
Sick days and vacation time are things most of us expect from our employers, so why shouldn’t your household employer expect it of theirs? While not required by federal law, remember that providing some paid time off, such as vacations, sick days or family leave, can go a long way to supporting your household employees and their families. Some cities and states do have their own requirements for the amounts of paid or unpaid time off for household employees, so it’s important to familiarize yourself with the legal requirements where you live.
6. Cover transportation time
If you employ a worker for very few hours per week you should consider compensating your employee for transportation time. Housekeepers, for example, often have long commute times because the nature of the work requires them to work for multiple families to make a full salary.
Remember, when you’re committing to paying your nanny, housekeeper or home attendant a fair wage, you’re making your home a great place to work and giving your household employees what they need to support their own families. And, if it feels like you’re stretching your budget, keep in mind that the wages you pay your nanny or housekeeper are a reinvestment in your household.
