The nanny industry is an unregulated "gray market" that predominantly employs women of color who aren't citizens. Because there's so little oversight and so few protections, nannies have little recourse in dealing with discrimination and workplace abuses, including in some cases pay as low as $5 an hour and racist remarks. The coronavirus has only exacerbated and entrenched these inequities as parents face their own employment uncertainties and need additional help with children who are learning from home. Business Insider talked to 16 nannies in the New York City area who are now confronting financial ruin or expected to fill the roles of educator, cook, and cleaner, while barely getting compensated for the position of one person. Parents who talked to Business Insider say the economics aren't so simple and that if you don't pay under the table, you are effectively taxed twice, adding that the practice allows the nanny to take home more money.
In March, when Angela's employers asked her to relocate with them from Brooklyn, New York, to the Hamptons to escape the coronavirus, the career nanny reluctantly agreed. Angela didn't want to leave her family behind at the height of the pandemic. But at the same time, she didn't feel she had much of a choice.
Angela is a single mother unauthorized to live in the US, and she needed the money.
In addition to helping support her two oldest children, who live with her in Brooklyn, Angela also sends money every month to her mother in Ecuador, who is raising Angela's younger daughter and son in her home country. Angela's ex-husband, whom she said abused her when they were together, doesn't pay child support.
Before the pandemic, Angela worked about nine hours a day at a rate of $20 an hour, taking care of the couple's children, who are an infant and 4 years old. That's standard for nannies in New York City.
But when Angela and the family of four pulled into the rental home in the Hamptons, her job requirements and salary suddenly and drastically changed, Angela told Business Insider through a translator. She was expected to wake up with the couple's baby at about 5:00 a.m. and worked until 9:00 p.m. most nights - seven days a week. Angela was clocking in about 70 hours a week, she said. In addition to watching the kids, Angela was now expected to cook and clean.
"I barely had time to shower," Angela told Business Insider.
When payday came, even with the increased hours, the couple slashed Angela's salary. While she was working at the family's apartment in Brooklyn, Angela took home $900 a week. In the Hamptons, without discussion, the couple cut her pay to $500. The husband and wife, who work in finance and sales, respectively, told Angela that they had docked her salary to help cover the cost of the rental home and food.
Angela tolerated the grueling work environment and reduced salary for a month. Then in April, she said she had had enough and quit.
"There are many, many women like me," Angela told Business Insider. "We keep quiet because we need the money."
The pandemic stumbled over a 'gray market' already rife with abuse, underpayment, and racial profiling
Nannies and advocates who work to improve the rights of caregivers said that while Angela's experience was disconcerting, it wasn't all that unusual.
Business Insider talked to 16 nannies in the New York City area, many of them with decades of caregiving experience and extensive childcare training. Many reported experiencing abuse and discrimination over the years, a heavy workload, and tenuous job security. Most nannies spoke under the condition of anonymity so they could speak honestly without hurting their careers. Since the pandemic hit, parents have often raised the bar even further. Many employers want a caregiver who can also serve as an educator and activities coordinator.
Because of a lack of oversight and the fact that caregiving hasn't historically been considered "real" work, the job is often filled by women of color who aren't citizens, making nanny ecosystems like New York City's function as "gray markets," said Haeyoung Yoon, senior policy director at the National Domestic Workers Association, a group that fights for the rights of domestic workers. Workers are often paid low wages under the table, without W-2 employment forms.
On top of that, many nannies say they're subjected to racism and other workplace abuses. But they often bear it because they have little, if any, recourse. Besides their immigration status, many said one of the main reasons they stick with it is that they love working with children.
Nannying can be a rewarding and lucrative job option. But the most coveted jobs often go to nannies of certain ethnicities.
Nannies say that those who are Black, Hispanic, or not native English speakers often get passed over for the well-paying jobs that come with benefits, or get paid well below the market rate.
"If a family is paying accordingly on the books and is providing a MetroCard and vacation days, you're least likely to get that job because it's so competitive," Ronide, a Black nanny who's been working in the industry for about 10 years, said. "They want nannies that speak a different language and can cook vegan meals."
Diamond Knights, who has worked as a nanny for nearly a decade, said expectations have also changed since the pandemic hit. She said parents will say: "'We require you to have a bachelor's degree, play the piano, speak Mandarin."
At the same time, employers will pay only $15 to $20 an hour, with no mention of overtime and benefits. "There are so many top-tier nannies that are taking jobs like this," Knights added.
Some parents who ask for nannies who speak another language are really looking for immigrants who might take lower pay, Knights, who's Black, said. Another nanny said parents sometimes hire nannies that speak different languages so their kids can be bilingual.
Still, other families, prefer to hire nannies who don't speak or understand English so they can talk freely about sensitive topics in front of their caregivers without their understanding, a mother, who's currently hiring and who spoke on the condition of anonymity, told Business Insider.
Racial profiling and 'nanny shaming' run amok
All four of the Black nannies interviewed for this piece said say they are constantly up against entrenched racism and have to work extra hard to come off as upbeat and likeable.
"Black people, in general, do not like it when white people see us as being aggressive," Ronide said. "I always have to police the tone of my voice because I don't want you to think that I'm a threat."
"Nanny shaming" is one common way employers try to control their employees. That's when people post photos online of nannies who appear to be mistreating a child in public, in hopes that their bosses may come across the images. These photos typically depict women of color taking care of white children and lack any sort of context to indicate whether the caregiver committed an indiscretion.
For this reason, Ronide said she often dreaded taking the children she watched to the park.
"The paranoia is intense," she said. "Going to the park is supposed to be fun. It's the complete opposite."
A nanny from Brazil, who spoke on condition of anonymity to protect her employer, shared a similar sentiment. On the first day of a nannying job, a bystander "caught" her talking to a parent momentarily, and then posted a photo of her to a mommy blog without consent, she said. The nanny added that the child she was watching was never in danger.
"There's always a parent that is recording," she said. "They are always blaming the nannies."
The Black nannies that spoke with Insider, however, said they'd faced incidents that were indisputably racist. Over the years, Ronide said employers, even those who said they were liberal and supported the Black Lives Matter movement, have made overt racist remarks. When Ronide went one day to a job in Manhattan wearing her hair naturally, she said her employer pointed and laughed at her hairstyle. She proceeded to ask if she could touch it.
Agencies and hiring families can discriminate in other ways, too, asking questions that are arguably improper and potentially illegal for an employer to ask during hiring about nannies' personal lives. One nanny, who spoke on condition of anonymity for fear of job repercussions, said an agency asked her whether she had a boyfriend because some parents want only nannies who are "attached to the family."
One parent who recently hired a nanny through an agency said she was asked what "size, shape, and age" she wanted her nanny to be, and was presented details about every candidate's personal life, down to whether or not the candidate had children or hoped to have children soon.
How the pandemic worsened longstanding inequality - a gray market inside every home
The pandemic has exacerbated and entrenched preexisting abuses and inequalities in caregiving.
"There's been longstanding inequity that these workers were facing; the pandemic just made everything worse," Yoon told Insider. "They're the first to lose their jobs and the last to get rehired."
When shelter-in-place orders first went into effect in March, many nannies, like Angela, were expected to abandon their own lives and move in with their employers as they left the city to keep their jobs.
"Families are becoming more needy; they want a hybrid nanny. The nanny needs to do the caretaking part as well as the housekeeping part. They know there are so many desperate nannies out there looking for jobs that they lowball you," another nanny said in an interview with Business Insider. "Even though [families] demand more, we are really fighting really hard right now to get those nannies to say no and stand their ground."
But work appears to have become more scarce. Some nannies said they were notified over text that they'd been terminated as the pandemic spread. Others said they were furloughed at their regular rate or a reduced one.
During a call, a nanny who recently lost her job showed Yoon her latest bank statement. It showed she had $0.05 in her account.
"Domestic workers are earning low wages to begin with," Yoon said. "This industry is wired to have an unequal power dynamic."
Getting away with paying meager wages isn't unique to the pandemic, though, even among affluent families who can afford to compensate their employees fairly. These families sometimes also pay their employees in cash and don't report that salary to the IRS. It's less complicated than paying on the books. It's also significantly cheaper, since the employer doesn't pay taxes on those funds, Randi Cohen, a parent and an employment lawyer, said. It also allows the employee to take home more money.
Another common way to pay is part on the books, part off, so it looks like the full amount is being reported to the IRS. A parent said many nannies request this, and parents are happy to oblige.
It typically costs about $5 to $7 more per hour to pay a nanny on the books than the alternative, adding thousands to an annual salary of roughly $40,000, based on a $20 hourly rate. These costs can force people, often women, out of the workforce when they have kids, since it can be cheaper to leave your job than to pay for childcare. And given that a family pays its nanny out of its after-tax earnings, paying on the books means the family is effectively taxed twice.
This is a risky dynamic for both parties. If a nanny loses her job, she won't have unemployment insurance to fall back on. If the two ever end up in court for any reason, a judge will likely rule against the parent in the case, Cohen said. A parent could also risk losing their professional license if an illegal arrangement is uncovered.
One of the most famous examples of this was the 1990s political scandal dubbed "nannygate," in which President Bill Clinton's nominee for attorney general, Zoe Baird, was withdrawn after she was found to have unpaid taxes related to a domestic worker unauthorized to work in the US. In fact, the next nominee after Baird, Kimba Wood, was withdrawn for the same reason.
Cohen said she has hired two part-time nannies within the past two years and has paid nannies on the books via Cash App. She tracks their hours in emails every two weeks.
She also consults with other parents looking for advice on how to manage nanny relationships.
Cohen said parents must tow a thin line between employing nannies and making sure the caretakers feel like part of the family: "This isn't an adversarial relationship. Everybody wants these relationships to be happy and healthy and filled with love for the children," she said.
Some parents who pay off the books say they're not all that concerned about legal consequences. A mother of two in Manhattan, who has employed her nanny for more than a year, told Business Insider that both she and her caregiver wanted to keep the arrangement off the books. It saves the family a significant amount of funds in taxes that they'd otherwise have to pay, and the employee takes home more money than she would otherwise.
The mother pays her nanny $23 an hour, and her nanny works about 50 hours a week. The employer said she was not worried about getting caught because "everyone is doing it."
One nanny also told Business Insider that she preferred to be paid off the books because it qualifies her for Medicaid. The nanny said she was diagnosed with cancer before the pandemic and needed to undergo surgery.
This is part of what makes nannies so vulnerable. Angela's first job in the US, in the early 2000s, was with a French couple in Brooklyn who had two young children. She worked about 50 hours a week and earned $250 a week. Her hourly rate amounted to about $5 an hour. Angela said the family didn't lack the means to pay her fairly but that they exploited her.
She stayed with the family for eight years, saying she's never relied on government benefits.
While she says she knows many nannies don't, Angela pays her taxes every year, which come to about $1,500. She said she remained hopeful that doing her civic duty may help "fix" her situation.
Angela has been out of work since April but is interviewing for jobs. Some nannies said they weren't sure when they'd find employment again.
What's next for the nanny economy
Once a disparate industry, nannies are now using social media and other groups to offer each other support and guidance as they navigate the industry.
A nanny who has worked on the East Coast for a decade said online groups were helping nannies organize and alert job seekers of unfair hiring and employment practices. She said the underground network of caregivers in the New York City area, supported by the National Domestic Workers Alliance, has been "on fire" during the pandemic. The alliance, for example, is advocating for caregivers to be included in the next coronavirus relief package.
Jacqueline Patchen, a former nanny, now works at Feed the Freelancers, a nonprofit created to distribute groceries to non-union freelancers who are unemployed because of the pandemic. She said that on the side, she's helping teach caregivers how to negotiate better rates and employment terms.
"Your caregivers have a right to work-life balance. They're not your indentured servants," Patchen said.
Nannies say bringing about change to the profession is changing the way caregiving as a profession is culturally undervalued.
Sue Downey, a nanny for two decades and the founder of Nannypalooza, a nationwide conference that aims to connect and empower nannies, said she's seen some improvements in the industry as more nannies advocate for better working conditions. Downey said she noticed the number of nannies being paid on the books has gone up from just five years ago. As more high-earning parents continue to work remotely during the pandemic and keep children home from school, Downey said she expected demand for nannies to increase.
A nanny in Brooklyn said of the issues regarding pay inequity and work abuse, "There's not much you can do in those kinds of situations because you're your own human resources."
She said people have to be careful when living paycheck to paycheck. "You can't make any moves that would put you further into poverty than you already are," she said.
Angela said she wanted to see the government get more involved in protecting caregivers who provide essential services. She wants nannies to get basic rights so they can afford to feed families, pay rent, and have some money to fall back on when they're no longer able to work.
"I've suffered a lot. I want things to change. We want rights because we're human," Angela said. "But given all these lack of protections, we're not recognized. We live in the shadows."