Be sure to do a thorough job checking the nanny’s background and references.  Make sure you and the nanny are clear regarding expectations of discipline, childcare style, pay, and benefits. If your children are old enough to have a say, be sure to get their opinion on the candidate.

You’ll need to draft a work agreement. The agreement should be specific and include the following:

• Compensation
• When performance reviews will be held
• When raises or cost of living increases will be administered
• How taxes will be handled
• Holidays, vacation, and sick days
• Insurance
• Details on living arrangements for live-in nannies
• Schedule
• Duties
• Transportation of children
• Details of the parenting philosophy
• What the nanny needs to do in case of emergency
• If there is a trial period, how long that is
• How much notice is required for either the nanny or the employer to terminate the contract

You can get a sample work agreement online with a quick search. There are many different styles and preferences.  Find one that suits your needs.