Redundancy Pay for Nannies
Nannies, providing they meet the requirements, are entitled to redundancy pay like any other type of employee. Therefore, it is important to know about the legalities of Redundancy.
What is redundancy?
- Redundancy occurs when an employee is dismissed due to their services being no longer required or when the job they do becomes obsolete.
- It is against the law to make someone redundant due to their gender, age, race, religious beliefs, marital status, sexual orientation, disability or pregnancy/maternity.
What is the criteria for redundancy?
In order to qualify for reundancy the nanny must:
- Be 18 or over.
- Have at least two years continuous employment with the same family, without any breaks, apart from maternity, sickness and unpaid leave.
- Be working as an employee with a PAYE Scheme and under an Employment Contract*
*This does not necessarily mean a written contract, as some employers unfortunately don't provide this. She is still considered an employee working under a contract even if there is nothing in writing.
How much is Redundancy Pay?
This is dependent on age and the length of time in employment with that family. The table below shows the current rates, also on our Rates & Thresholds page:
|18-21||Half a week's pay or £244.50, whichever is lower|
|22-40||One week's pay or £489, whichever is lower|
|42-Retirement||One and a half week's pay or £733.50, whichever is lower|
Being on PAYE, a nanny is legally entitled to these amounts. However, the employer is free to pay more than the statutory minimum. No part of the costs can be claimed back from the state and the nanny does not have to pay tax on redundancy payments up to £30,000.
Sometimes circumstances change and an employer no longer has a full-time job for their nanny. If part-time work is still available the employer is required to first offer the 'new' position to the existing nanny.
If the nanny chooses not to continue working for them under the new conditions, they are still entitled to redundancy pay, unless they are on a fixed term contract.
The nanny will also qualify if the family relocates to another area, unless there is a relocation clause in the Employment Contract.
Contact Nannytax HR
- Nannytax HR offers our clients unlimited access to employment law support and advice through our team of HR specialists.
- If you need make your nanny redundant we strongly advise our clients to take full advantage of this service.
- Redundancy can be tricky to negotiate and it is important to follow the correct legal procedure.