Nannies, providing they meet the requirements, are entitled to redundancy pay like any other employee. Therefore, it is important to know about the legalities of redundancy. Redundancy can be a tricky subject and difficult to negotiate. That’s why at Nannytax our payroll and HR team can provide our customers with end-to-end support with this process.
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 redundancy the nanny must:
- Have at least two years continuous employment with the same family
- 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. A nanny is still considered an employee working under a contract even if there is nothing in writing.
How much is nanny 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:
|Under 22||Half a week’s pay for every year of service|
|22 – 41||One week’s pay for every year of service|
|41 – Retirement||One and a half week’s pay for every year of service|
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.
Nannytax and Redundancy
Redundancy isn’t commonplace as it should only occur if a family no longer require a nanny’s childcare. If you are in a situation where you are required to make your nanny redundant we can guide and support you to follow the correctly process. We’ll calculate the redundancy pay due to produce the final pay slip and ensure all the legal documentation is in place. Contact us to find out more about the Nannytax service today and a member of our subscriptions team will be happy to assist.
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