From time to time, we get questions from our readers such as the following: “Do I need to pay my nanny while she’s on leave? Do I have to pay her overtime? Do I need to pay social insurance for her?”
First, let’s see what kind of legal relationship exists between you and your nanny. Similar to employees working for an employer to get a salary in return (you may read our post “What are the Rights of Employee in China?” to know more), nannies provide domestic services to get remuneration in return. However, according to the explanation regarding the application of Chinese labour law provided by the former Ministry of Labour and Social Security (now Ministry of Human Resources and Social Security) of the PRC, “the scope of this law excludes agricultural workers, active-duty military personnel and family nannies.” Hence, the relationship between you and your nanny is not a labour relationship.
In another words, the principle of freedom of contract applies. This allows you to negotiate with your nanny the terms of her contract, which is a domestic services contract instead of a labour contract, freely.
So, technically, you don’t have to pay overtime or social insurance on her behalf as required under labour law, and you can terminate the contract with your nanny without worrying about severance pay, if you are not happy with your nanny’s service. Or you can ask her to work for you during holidays, as long as you both agree upon the respective remuneration.
Our legal tips:
1. We suggest that you sign a domestic services contract with your nanny, so that she will be aware of her duties and responsibilities and knows what you expect of her to avoid any future dispute.
2. Please remember, though it’s not required by law to pay social insurance on behalf of your nanny you might be faced with liability if any accident happens to your nanny while she is being on service for you. You remain responsible for the personal damage compensation (covered by civil law) instead of industrial injury compensation (covered by labor law), which may include: medical expenses, lost income, hospital meal subsidies, nutritional costs, care services, transportation costs and equipment costs of disability, if any. So, to be on the safe side you might as well consider concluding an insurance on her behalf.
3. Though the payment of overtime is not required, it’s a very common practice to give your nanny a “hongbao” on Chinese traditional holidays, such as CNY or the Mid-Autumn Festival. The amount is up to your personal discretion or the level of your community or local expenses.
