Picture this: A family hires the perfect nanny through your agency. They’re experienced, professional, and fit seamlessly into their home. But a few months in, something goes wrong—pay issues pop up, tensions rise, and before you know it, the placement falls apart.
What happened? DIY payroll mistakes, tax confusion, and legal missteps can unravel even the best matches.
As a nanny agency owner, your goal isn’t just to place caregivers—it’s to create lasting, successful employment relationships. And that starts with legal pay. When families pay their caregivers legally, everyone wins: your agency, your clients, the caregivers you place, and even your community.
Let’s break down why fair and legal pay isn’t just the right thing to do—it’s a smart business move for your agency.
Stronger Placements, Stronger Agency Reputation
Families turn to your agency for expertise, and payroll, taxes, and labor laws should be part of that conversation. When nannies are paid legally, jobs are more stable, caregivers are more committed, and families feel secure.
How Legal Pay Strengthens Your Agency:
✔️ Higher-Quality Candidates – Professional caregivers prefer working with agencies that advocate for fair and legal pay. A reputation for legal placements attracts the best talent.
✔️ Fewer Payroll Headaches & Disputes – Legal pay eliminates wage disagreements, surprise tax bills, and potential legal trouble for families. That means fewer frantic calls for you to handle.
✔️ A Competitive Edge – Agencies that educate families on legal pay stand out as trusted, ethical industry leaders. When families know you care about compliance, they trust you more—and refer their friends.
An agency that promotes fair pay isn’t just placing nannies—it’s elevating the entire industry.
Why Families Benefit from Legal Pay
Many families don’t realize that paying a nanny under the table comes with serious financial and legal risks and silently sends a message that a nanny’s work isn’t valued. Helping them understand that legal pay isn’t just about following the rules—it’s about protecting their household and making their placement more secure.
Key Benefits for Families:
✔️ Tax Savings – Families can take advantage of tax breaks like the Dependent Care FSA or the Child and Dependent Care Tax Credit, which can help offset payroll costs.
✔️ Legal & Financial Protection – Families who pay under the table risk IRS penalties, audits, and even lawsuits from unpaid wages. Legal payroll ensures they’re protected.
✔️ Better Caregiver Relationships – A nanny who is paid legally feels valued and secure, leading to longer-lasting placements your clients rave about.
The bottom line? Legal payroll isn’t just compliance—it’s peace of mind.
How Legal Pay Protects Caregivers
Imagine dedicating your career to caring for children, only to find out you can’t get unemployment benefits when your job ends or collect social security benefits when you retire. Or you’re denied a loan because you don’t have verifiable income.
That’s the reality for caregivers paid under the table. As an agency, you have the power to change that.
How Legal Pay Supports Nannies & Caregivers:
✔️ Verifiable Income – A W-2 allows nannies to rent an apartment, apply for a car or home loan, or secure a credit card.
✔️ Access to Unemployment Benefits – If a family no longer needs their nanny, legal pay ensures they can receive unemployment support.
✔️ Social Security & Medicare – Paying into these programs means caregivers have the financial security they earned.
Advocating for legal pay helps professionalize the nanny industry and ensures caregivers are treated with the dignity and respect they deserve.
Fair Pay Strengthens Your Community
Legal payroll isn’t just good for individual families and caregivers—it supports the economy and strengthens the entire community.
✔️ Fair Wages & Labor Protections – Legal pay ensures nannies receive at least a legal wage, overtime pay, and paid leave where required.
✔️ Stronger Local Economies – Payroll taxes fund schools, healthcare, and infrastructure, benefiting everyone.
✔️ Fewer Legal & Financial Risks – When families comply with employment laws, it reduces tax fraud, wage disputes, and lawsuits that burden the legal system.
Your agency plays a key role in shaping the future of household employment—one where caregivers are treated as professionals and both families and caregivers are protected.
Make Payroll Easy for Your Families—Without Adding to Your Workload
We get it—talking to families about payroll can be tricky. But you don’t have to be a tax expert to steer them in the right direction.
Partnering with HomeWork Solutions allows you to provide families with stress-free payroll guidance, ensuring they stay compliant without extra work for you.
💡 Want to help your families get payroll right and earn referral bonuses for your agency at the same time?
Learn more about our Agency Partner Program today.
By promoting legal pay, you’re not just helping families and caregivers—you’re elevating your agency and setting a new standard for the industry.
Rachel Lawrence is a household payroll expert with HomeWork Solutions, which has been helping families and agencies navigate nanny taxes and labor laws for over 30 years. Passionate about ethical employment practices, Rachel works to simplify payroll compliance so agencies and families can focus on what matters most—strong, lasting caregiver relationships.