Structure it as a replacement obligation, not a money obligation. Your guarantee should promise one thing: if the placement ends inside a defined window and the family met the conditions you set, you will search again and place again without a new placement fee. Money leaves your business permanently. A second search costs you time you were going to spend recruiting anyway, and it often ends with a candidate you already had in the pipeline.
The margin damage almost never comes from the promise itself. It comes from a guarantee clause written in three sentences that does not say when the clock starts, what the family has to do to keep the guarantee alive, how many replacements are included, or what happens if the family simply decides they no longer want a nanny. Each of those gaps is a place where a frustrated parent will read the contract in the way that favors them, and you will not have language to point to.
So the work is in the scoping. Below is how the pieces fit together, and how to price the remedy so that a guarantee claim costs you a search rather than a quarter.
What a replacement guarantee promises versus what a refund promises
These are two different products and families conflate them constantly. A replacement guarantee says: we will find you another qualified candidate at no additional placement fee. A refund says: we will return some or all of the money you paid us. Only one of those keeps the relationship, and only one of those keeps the revenue.
Write the guarantee so replacement is the primary remedy and a refund is only available in narrow, named situations, typically when you have presented a defined number of qualified candidates within a defined period and the family has declined all of them. If you leave the family a free choice between replacement and cash, some will always take cash, because cash is simpler for them.
Language that works reads roughly like this: the agency's sole obligation under this section is to conduct a replacement search, and a refund is available only if the agency fails to present at least three candidates meeting the written job description within sixty days of a valid guarantee notice.
Keep reading: What questions actually get a former employer to tell me the truth about a candidate?
Choosing a window length that matches your fee and your market
Window length is a pricing decision, not a service decision. A longer guarantee is a larger contingent liability, and it should be paid for in the fee.
Think of it in terms of your own exposure. If your placement fee is a percentage of first year gross compensation, the fee scales with the role, but your cost to run a replacement search is roughly fixed: sourcing hours, screening hours, reference calls, and your time coordinating trials. Call that your search cost. If a full search costs you 20 hours of staff time at a loaded rate of 45 dollars an hour, your search cost is about 900 dollars. Those are assumptions, and you should substitute your own numbers, but the shape holds.
Now estimate how often a placement in your book breaks inside each window. You have this data in your own files. Count the placements you made in a year, count how many ended inside 30 days, inside 90 days, inside 180 days. Suppose out of 40 placements, 2 ended inside 90 days and 5 ended inside 180 days. Your 90 day claim rate is 5 percent and your 180 day rate is 12.5 percent.
| Window | Claim rate | Search cost per claim | Expected cost per placement |
|---|---|---|---|
| 30 days | 2.5% | $900 | $22.50 |
| 90 days | 5% | $900 | $45 |
| 180 days | 12.5% | $900 | $112.50 |
That is the arithmetic that tells you what a longer window is worth. Moving from 90 to 180 days costs you roughly 68 dollars per placement in expected search cost, so if a longer guarantee wins you even a modest share of competitive searches, it pays. What it must not be is free and undocumented. Price it, or at least know what you are giving away.
Conditions that must hold for the guarantee to apply
Conditions are what stop the guarantee from becoming an open ended obligation. Keep them few and keep them checkable. A condition you cannot verify is a condition you will not enforce.
- The placement fee has been paid in full by the due date stated in the agreement.
- The family employed the candidate on the terms in the written work agreement, including the compensation, schedule, and duties described at intake.
- The family is paying legally, with wages reported and required taxes withheld or paid through a household payroll provider.
- The family gave written notice of the separation within a stated number of days, commonly seven or ten.
- The family did not hire the candidate away from the agreed role, change the role materially, or reassign the candidate to another household.
The legal pay condition deserves particular attention. Household employment in the United States triggers real obligations once cash wages cross the annual Social Security and Medicare threshold, and separately federal unemployment tax once quarterly wages cross the FUTA threshold. Many states add their own registration and paid leave rules. When a family pays off the books and the nanny quits over it, that is not a failure of your match, and your guarantee should say so.
Keep reading: Why do so many of my placements fall apart in the first ninety days of the job?
Carve outs: relocation, change in family circumstance, wage disputes
A carve out names a cause of separation that does not trigger the guarantee. Without them you are insuring the family's life, not your placement.
The three that matter most:
- Family relocation or role elimination. The family moves, a parent stops working, a grandparent moves in, the child starts full day school. The placement ended and your candidate did nothing wrong. Carve it out, and offer a goodwill credit toward a future search if you want to protect the relationship.
- Material change to the job. The role was posted as nanny for two children with light child related tidying. By week three it includes the family's laundry, grocery runs, and a dog. If the family changed the job, they broke the match, not you.
- Wage and hour disputes arising from the family's own practice. Unpaid overtime, refusal to pay guaranteed hours, undocumented deductions. You supplied a candidate; you did not agree to underwrite the family's payroll behavior.
Write each one as a plain sentence in the agreement and walk the family through them at signing. A carve out you explain in advance is a boundary. A carve out you produce for the first time during a dispute is an ambush, and it will cost you the referral even if you win.
One replacement or unlimited replacements within the window
Offer one replacement, with the window running from the original start date rather than restarting.
Unlimited replacements inside a rolling window is how agencies end up running four searches on one fee. If the second placement also fails, that is information: something about the household or your intake is not working, and the answer is a conversation, not a third free search.
If you want to be generous without being exposed, offer the second replacement at a reduced fee, say 50 percent of the standard placement fee, and require a revised job description before you begin. The reduced fee is not really about money. It is about making the family stop and reconsider what they are actually asking for.
Whether the window restarts
Say it explicitly either way. The common and defensible position is that the guarantee period is measured from the first candidate's start date and does not renew. If you prefer to give the replacement its own short window, 30 days is a reasonable amount, but write the number down. Silence here is read generously by whoever is unhappy.
See how NannyMatchDesk handles this for nanny and household staffing agencies
Prorated refunds and how to calculate them cleanly
When a refund is genuinely owed, use a straight line proration against the guarantee window and disclose the formula in the contract. Families argue with judgment calls; they rarely argue with arithmetic they can reproduce.
A clean formula: refund equals the placement fee, less any non refundable retainer, multiplied by the days remaining in the guarantee window divided by the total days in the window.
Worked example. Placement fee of 9,000 dollars on a 90 day guarantee, with a 1,500 dollar retainer stated as non refundable at signing. The nanny works 36 days and resigns for a qualifying reason. Days remaining are 54. The refundable base is 7,500 dollars. So 7,500 multiplied by 54 divided by 90 gives 4,500 dollars. The family keeps 36 days of service and you keep the retainer plus the earned portion.
Two details make this hold up. State whether days means calendar days or scheduled work days, and pick calendar days for simplicity. And state that the retainer is earned on execution, in its own sentence, not buried in a fee schedule.
Documenting the trigger date and the family notice obligation
Nearly every guarantee dispute is really a dispute about a date. When did the nanny actually start. When did she actually stop. When did the family tell you.
Fix all three in writing. Require a signed start confirmation from both the family and the candidate on the first day, recording the actual start date. Require written notice of separation within seven days, sent to a stated email address, with the last day worked and a short statement of reason. Then record your own file note the day you receive it.
Keep the evidence in one place per placement: the signed work agreement, the start confirmation, the separation notice, and every message about the guarantee. If a family claims the nanny left in week two when your file shows a start confirmation and a notice email eleven weeks apart, the conversation ends quickly.
Putting it to work
A guarantee that protects your margin is specific in five places: the window, the conditions, the carve outs, the number of replacements, and the refund formula. Everything else is negotiation. Draft those five, price the window against your own claim history, and explain the carve outs before the family signs rather than after they are upset.
The operational half is keeping the dates and documents where you can find them under pressure. NannyMatchDesk holds the placement contract, the start confirmation, and the guarantee clock on one placement record, so when a family calls in month two you answer with a date instead of a search through your inbox.
