The very challenging economic climate we find ourselves in has some predictable effects on nanny payroll. Many nanny employers, when faced with a job loss or income reduction, need to take immediate steps to change their household expenses, and firing the nanny is often an unfortunate consequence.

When the employee (nanny) is involuntarily discharged, the timing of final wage payments is governed by state law. California for example requires that the discharged nanny be paid all wages due immediately at the time and place of discharge. The District of Columbia, Illinois and New York (and many other states) require that all wages to the discharged nanny be paid no later than the next business day.

The Bureau of National Affairs (BNA) reports "The issue of who is an independent contractor and who is an employee is getting more attention from lawyers and from cash-starved states, attorneys said during a recent session of the Labor and Employment Relations Association's annual meeting."

Montgomery County MD passed legislation requiring that domestic workers (nannies, housekeepers, maids, companions) be provided a written employment agreement effective January 18, 2009.