Are Nannies Household Employees or Independent Contractors?
One of the most common questions families ask when hiring a nanny is whether the nanny should be classified as an independent contractor or a household employee. It’s an understandable question — many families want to do things correctly but aren’t sure where to start.
The short answer is this:
In almost all cases, nannies are household employees, not independent contractors.
Here’s what that means, why it matters, and how families typically handle it.
Why Classification Matters
How a nanny is classified affects:
Taxes and payroll
Legal compliance
Protections for both the family and the nanny
Long-term stability of the working relationship
Misclassification — even when unintentional — can create problems later, including back taxes, penalties, and stress for everyone involved. That’s why it’s important to understand the distinction upfront.
Household Employee vs. Independent Contractor: What’s the Difference?
A nanny is generally considered a household employee when:
The family controls what work is done and how it’s done
The nanny works in the family’s home
The family sets the schedule
The nanny provides care using the family’s guidelines and expectations
This is true whether the nanny works full-time or part-time.
Independent contractors, by contrast:
Control how they perform their work
Set their own schedules
Typically work for many clients at once
Offer services independently to the public
Most nannies do not meet these criteria, which is why federal and state guidelines classify them as household employees.
What Being a Household Employer Involves (At a High Level)
Families are often relieved to learn that being a household employer doesn’t have to be complicated.
In general, it means:
Paying the nanny hourly
Withholding and remitting applicable taxes
Providing a year-end tax form
Following wage and hour laws (including overtime when applicable)
Many families choose to use a household payroll service to handle these details. These services manage tax filings, payroll, and compliance, making the process far more straightforward than families often expect.
Why Some Families Are Tempted to Use a 1099 — and Why It’s Risky
Families sometimes assume that paying a nanny as an independent contractor is easier or more affordable. In reality, this classification is usually incorrect and can shift risk onto both parties.
When a nanny is misclassified:
The family may be liable for unpaid employer taxes
The nanny may lack legal protections and benefits
Both parties may face issues if audited
At Thrive, we educate families about proper classification because it protects everyone involved and supports a professional, sustainable working relationship.
Thrive’s Approach
Thrive works exclusively with families and caregivers who are prepared to establish legal, transparent employment relationships. This includes:
Proper employee classification
Clear expectations around pay and hours
Encouraging compliant payroll practices
We don’t expect families to be experts — that’s part of what we help guide you through. Our goal is to make sure you feel informed, supported, and confident as you move forward.
The Bottom Line
If you’re hiring a nanny to work in your home, on your schedule, caring for your children according to your family’s needs, that nanny is almost certainly a household employee.
Starting with the correct classification sets the tone for a positive, professional relationship — and avoids complications down the road.
If you have questions about what this looks like for your specific situation, we’re always happy to help talk it through.
