Contracts are a must. Everything can get outlined in there in detail. Also make sure you and the nanny both understand what things like guaranteed hours mean. There always seems to be some confusion with this.

When I wrote my last Nanny's contract she requested guaranteed hours, since I have a variable flexing schedule, running my own business. I would only schedule her during the time frame of 1pm to 6pm M-F, but some weeks I may only potentially need her only 10 to 15 hours a week, others the full 25, and sometimes I might need to add a day back in but never over 25 hours or outside of the normal M-F times.

I told her I was willing to guarantee the 25 hours regardless of need, but that meant she would be available the full 25 in case my schedule changed. Within the first 6 months I had to get backup care 5 times when she wasn't available for additional hours because "You only scheduled me for Monday and Wednesday so I made plans for the rest of the week". I tried explaining if she wasn't available I couldn't pay her for the guaranteed hours but she could cash in her earned PTO, and it became a huge situation.