Nanny Industry Challenges, Here and Abroad
Louise Dunham, CEO of Placement Solutions, Australia
We have always benefited from the relationships we have built with others in our industry. Louise Dunham, CEO of Placement Solutions in Australia, recently interviewed Daryl and found that we share common goals and challenges while promoting best practices, even with over 7500 miles between us! Read Louise’s article below.
The ‘state of play’ of nannying here and in the USA
I’ve recently returned from a visit to the USA during which I attended the Association of Premier Nanny Agencies (APNA) conference. Those who attend this conference are running nanny agencies all over America and beyond, so collectively they provide a unique perspective on what is happening in the nanny industry in the States specifically, but with implications for all of us.
I subsequently interviewed Daryl Camarillo, who runs Stanford Park Nannies in the Silicon Valley area of California, and Kathy Webb, who runs HomeWork Solutions, a nanny payroll and tax compliance business on the other side of the country in Virginia. I wanted to get their views on where the nanny industry is heading. Perhaps unsurprisingly, they describe issues that have many similarities to what is happening in Australia.
I started by asking Daryl and Kathy what they see as the most significant changes to the industry in the last decade or so. For Daryl, this comes down to the impact of the internet (on which the nanny industry is hardly alone!). The rise of web-based matching services like care.com (findababysitter.com.au is another example in Australia) have, in Daryl’s view, “dumbed down the process of matching families and nannies”. The lack of scrutiny is leading to far too many children being “put in harm’s way by parents who were led to believe that the DIY method was safe and easy”.
Kathy also sees a lack of understanding in many parents about the distinction between online marketplaces and traditional agencies. However she also sees some light at the end of the tunnel in “the rise of domestic worker bills of rights at a state level, and increased scrutiny of the ‘independent contractor’ designation.” She also sees improvements in the background screening available to agencies as a positive, as well as a general improvement in the professionalism of the industry. However, there is a long way to go.
From Kathy’s perspective, a gradual (and legitimate) improvement in the pay of legally employed nannies over time is introducing a new challenge in that “many families feel priced out of the market”. While agencies are getting creative at finding ways around this (such as nanny sharing) there seems no doubt this situation is helping to boost online services and corner-cutting when it comes to legal employment.
Daryl believes there is still a lot of ignorance amongst both parents and nannies as to what constitutes proper legal employment. “The sad truth is that the challenges facing agencies today are the same challenges we have worked hard to overcome for decades,” namely widespread use of hiring standards and widespread failure to comply with employment labour and tax laws. She quotes figures suggesting that less than nine per cent of nannies are paid legally, which has ramifications much wider than the obvious underpayment of nannies along with their missing out on various protections. For instance, billions of dollars are foregone in unpaid federal income taxes and social security and Medicare contributions as a result. This is a very similar argument to that we’ve been making in Australia about the need for nannies to be legally employed.
Kathy believes the public perception of nannying being something less than a profession – and therefore the temptation to cut corners – would be helped by having a national standard, or credential for nannies. At present, “anyone can call themselves a nanny when looking for work, which makes the choice of candidates complicated for families.” She believes “background screening should be mandatory for all in-home caregivers, and families should be held responsible for this minimum level of candidate vetting”.
It’s not a question of changing or introducing new laws. “US law is quite clear that nannies are employees, that they and their employers have the obligation to pay taxes and benefits and provide protections,” says Kathy. As in Australia, the law is there, but that doesn’t mean it is adhered to.
What is needed, Daryl believes, is greater enforcement. “The chances of a family’s tax return being audited for failure to comply with household employment taxes is negligible. In my 26 years in this business, I have not heard of one case … I often hear families say, ‘I’m not running for public office, and none of my friends pay their nannies legally, so why should I?’”
All-in-all the picture painted by Daryl and Kathy – and which I have seen on my visits to the US – is not significantly different from the Australian situation. While we slowly increase the public perception of nannies as professionals, we are also fighting ongoing battles for formal accreditation, for nannies to be treated as employees and not contractors, and for those laws that do exist in these areas to be properly enforced.
Written by Louise Dunham, CEO of Placement Solutions, Australia
