Nanny Employment Agreement | FLSA & State-Compliant Template

A nanny and household employment agreement is an employment contract for domestic service work performed in a private home. The family is the employer, the worker is a W-2 employee, and the household is the worksite. That last point drives everything else. Because the family sets the hours, the methods and the tools, the common law control test used by the IRS makes the worker an employee, whatever the parties call the arrangement. The document does two jobs: it records the deal (rate, schedule, duties, benefits) and it builds the paper trail wage regulators expect a household employer to keep. Families who use a standard at-will employment agreement for US employers will recognize the skeleton, but the household version carries clauses no office contract needs, from car use and family travel to camera rules inside the home.

Two documents get confused with it. An agency placement contract binds the family to the agency rather than to the caregiver, and never satisfies a state written-contract mandate. An au pair placement runs through the J-1 Exchange Visitor Program under 22 C.F.R. Part 62, with a federally set stipend and an hours cap, so a nanny contract is the wrong instrument.

Domestic service employees have been inside the Fair Labor Standards Act since the 1974 amendments, and the implementing rules sit at 29 C.F.R. Part 552. Two exemptions get quoted at families constantly and almost never apply to a working nanny. The casual babysitting exclusion in §552.5 covers irregular, occasional sitting, not a scheduled position, and §552.103 gives babysitters working on any other basis the same protection as every domestic employee. The companionship exemption in §213(a)(15) reaches care for people unable to care for themselves through age or infirmity, so it says nothing about childcare. A live-out nanny earns time and a half after 40 hours in the workweek, and no salary arrangement changes that.

Live-in staff sit under a different rule. Section 13(b)(21) exempts an employee who resides in the household from federal overtime, never from minimum wage. The hours calculation is where the contract earns its keep: under the Cornell Legal Information Institute text of the live-in domestic service regulation, sleeping time, meal periods and stretches of complete freedom from duty drop out of hours worked only by agreement between the employer and the employee, and any interruption by a call to duty is paid. Without that written agreement, every hour the live-in nanny spends under your roof is arguably compensable.

Then comes the tax layer, which sinks more families than the wage rules. A household worker is reported on a Form W-2, never a 1099, with employment taxes computed on Schedule H and filed with the family's Form 1040 once the annual cash wage threshold in IRS Publication 926 is crossed. Misclassification is the most expensive error here, which is why a 1099 independent contractor agreement belongs to a different fact pattern.

The classic trigger is the end of parental leave. A family hires its first full-time nanny, agrees on a weekly figure over coffee, and discovers three months later that nobody wrote down what happens when the parents come home late. The second is upgrading an occasional sitter to a fixed schedule, the moment the casual babysitting exclusion stops applying. Live-in hires form a category of their own, because the sleep and meal exclusions have to be negotiated in advance and cannot be imposed later. Elder care arrives from the other direction: an adult child hiring a caregiver directly for a parent becomes a household employer with the same obligations.

Two edge cases generate real disputes. In a nanny share, two families employ the same person in one or both homes, which usually creates joint employment: hours are aggregated across both households for overtime, and each family can be held liable for the other family's unpaid wages. Separated co-parents sharing one nanny across two homes land in the same trap. Both call for a single agreement naming every employing household, signed by all of them.

• The identification of the employing household names every adult who will direct the work, which matters in nanny shares and separated-parent arrangements where joint employment aggregates hours and spreads liability.
• The duties and scope of work clause separates childcare or personal care from household tasks such as laundry, cooking and errands. The split is not cosmetic: several states set a different overtime standard depending on how much of the week goes to personal care.
• The schedule and guaranteed hours clause separates hours the family promises to pay from hours actually worked. Guaranteed hours protect the employee when the family travels, while the contract still records real time worked, since a guarantee never replaces the overtime math.
• The compensation and overtime clause fixes an hourly rate, the premium past the applicable weekly threshold, pay frequency and payment method. It commits both sides to the gross figure rather than a net take-home number, the most common source of conflict once withholding begins.
• The live-in terms clause covers private quarters, the sleep period, meal periods, off-duty time, lodging credits and house rules, drafted as the mutual written agreement contemplated by 29 C.F.R. §552.102.
• The confidentiality and privacy clause restricts disclosure of family information, sets social media rules for images of the children and governs cameras in the home, and it pairs with a dedicated employee non-disclosure agreement when the family wants more.

California runs the strictest split in the country. Under the Domestic Worker Bill of Rights, Labor Code §§1450 to 1454, a personal attendant, someone who spends at least 80 percent of working time supervising, feeding or dressing a child or a person needing supervision, earns overtime after 9 hours in a day or 45 hours in a week. A household employee who is not a personal attendant falls under Wage Order 15, with overtime after 8 hours in a day and 40 in a week. The 80 percent test turns on the real duty mix, so the duties clause is doing legal work here.

New York requires overtime after 40 hours for live-out staff and 44 hours for live-in staff, 24 consecutive hours of rest each week, and paid days of rest after a year with the same family. The Domestic Workers' Bill of Rights also extended state human rights protection to household workers, and families owe a written wage notice at hire under Labor Law §195(1).

New Jersey went furthest on paperwork. The Domestic Workers' Bill of Rights, N.J.S.A. 34:11-69 et seq., requires a signed written contract for any domestic worker doing more than five hours of work a month, in English and in the worker's preferred language, covering duties, pay, schedule, breaks, time off and, for live-in staff, sleep and personal time. On-duty meal breaks are lawful only if the contract provides for them.

Massachusetts mandates a written agreement once the employee works 16 hours a week under M.G.L. c.149 §190, with a timesheet every two weeks and three years of retained records. Illinois covers household workers under the state minimum wage, human rights and one-day-rest-in-seven statutes from the first employee, and Chicago adds a contract mandate in the worker's preferred language. Nevada, Virginia, Seattle and Philadelphia each have a version. In Texas and Florida no such statute exists, so the federal floor governs and the contract is the only record of the deal.

You begin by choosing the state where the work is performed, which drives the overtime thresholds, the mandatory notices and the written-contract rules the template applies. The form asks whether the position is live-in or live-out, and the live-in path opens the sleep, meal and off-duty clauses required by federal regulation. You enter the employing household or households, the employee's details, the start date and any trial period, then the duty mix between care work and household tasks, since that allocation decides which overtime standard prints in a state such as California.

Compensation comes next: gross hourly rate, guaranteed weekly hours, the overtime premium, pay frequency and payment method, plus any lodging credit for live-in staff. You then set paid time off, holidays, sick leave, use of the family car and confidentiality, and the last screen covers notice, severance and return of property. Review the draft, adjust the wording, and download the agreement in Word and PDF. The wider library of US employment templates covers the onboarding paperwork around it.

The first and costliest error is paying a nanny on a 1099. Families do it for simplicity, sometimes at the worker's request, and it exposes them to back taxes, penalties and interest once anyone examines who set the hours and supplied the equipment. Close behind is the flat weekly salary with no record of hours. A salary is a payment method, not an exemption, and when a family cannot show hours worked, the employee's own reconstruction stands. The burden of proof on hours falls on the employer, not on the household employee.

Deductions for room, board or a broken phone screen are the third trap, since most states demand written authorization and cap what may be credited against wages. The fourth is signing a live-in nanny to a schedule with no written sleep and meal agreement, which turns a whole overnight into paid time on paper. Nothing in a household employment contract can waive minimum wage, overtime or a statutory day of rest. Families also forget the exit, from final paycheck deadlines to the return of keys, and a caregiver who held medical information for an elderly employer needs a HIPAA authorization for release of medical records closed out properly.