Nanny's Lunch Hour

I am not a lawyer. However, I looked up California laws related to this, and basically you are required to give a 30 minute unpaid, totally off duty (naps or any "on call" time doesn't count!) lunch PLUS two 10 minute paid totally off duty rest breaks in an 8 hour shift. So, in your case, if you're home to provide breaks and she works 9-5, takes two 10 minute breaks and a 30 minute lunch, she'll be paid for 7.5 hours, since lunch is unpaid. She can start 30 minutes earlier or stay 30 minutes later if you want the full 8 hours. HOWEVER, once you're back at work out of the house, if you cannot provide those breaks that she's legally entitled to (because, reality!), you must pay a one hour penalty for missing the rest breaks and a one hour penalty for missing the lunch break. Therefore, if she worked 9-5 with no totally off duty time, she should be paid for 10 hours (8 hours work, plus 1 hour penalty for missed lunch and 1 hour penalty for missed rest breaks). So you could say, in your contract, that the rate of pay is $16/hour, so in the case of no breaks, she'd be making $800/week for 40 hours of work (plus 10 penalty hours), but when she does get all of her breaks, she'll only end up with $600 for 37.5 hours of work. For the $200/week you save, you might be able find someone to come cover those 50 minutes/day of breaks! You can look up California Wage Order 15 for details, and you may want to consult a lawyer to confirm what's required of you. 

So that's legally... What parents are doing may be different, but may not be legal. That's up to you, like whether you've decided to pay under the table or keep it legal.

In my experience, we've never provided a lunch hour for our nannies (nor have I ever heard of friends doing this). Expectation is that the nanny is in charge of the child for the set number of hours you are paying them, and they either eat their lunch with the child or when the child naps. In our case, we currently have a child home from pre-school that does not nap, so we're letting our child use a tablet for an hour a day to give our nanny a break. However, the expectation is that she still has responsibility for him during this time.  

We set up a contract following an example from the Hand in Hand Domestic Employers Network that encourages fair pay/working conditions. It said to offer 15 minute "on duty" rest breaks for every 3 hours worked and a 30 minutes "on duty" lunch break. Our nanny probably does not take that long of a break, but she does rest/eat some when both babies are napping and she knows she is entitled to this. But since she is still "on duty" she is getting paid for this as a part of her 8 hours/day of work. I have only had a nanny for a little over a month, but I don't think its common to give an hour totally off in the middle of the day.

I've never heard of a nanny take a lunch hour. Our first child's nanny brought her own lunch as well. I don't know if she is only thinking about the current situation (ie you working at home) so as a compromise, maybe you could agree to give her an lunch hour now (without pay)  but once you are physically back at work, she wouldn't get lunch hour. Keep in mind, she is getting paid while the babies naps. She can eat during that time.

Oy!

This relationship is a deck of cards waiting to fall.

I'm a 30 year plus nanny, I've worked in homes and hotels, as an au pair, travel nanny and infant caregiver.

I've subbed for families in between au-pairs and I've seen some nannies who are basically there to hang out, not to be a nanny.  You need to be firm, that there will be no more "errands" during her time at work, ask her to please do errands before or after work or on her days off.  She does not get a lunch hour.  She is paid caregiver.  She get's paid to work. 
She eats when the baby sleeps.  She should not be doing much else.  Reading, having tea, maybe bay laundry.
You may need to start looking for a new nanny.  This one, not so good.  You've been too lax.  And it's harder when you have your nanny living with you, I know. 
There was a nanny working with one of my families a few years back who would get up right when she was to start work and would then prepare her breakfast; right in the middle of parents rushing around trying to get out the door.  I was shocked. Her breakfasts were homemade Brazilan goodnesss, but very badly timed.
I mentioned to her that she may want to get up an hour earlier to make her breakfast so that she would be ready for handoff right at her start time.  She was there to see California, not to be a nanny.  Many au-pairs are very bad caregivers but are cute and sweet, so they get hired.  You can do much better!  
Please, please don't bank hours, nannies will only end up resenting you.  They will feel they are working all the time.

Make a schedule and stick to it.  Make sure you are offering pto on holidays and at least one week vacation.
Pay her when you go away or don't need her.  Show her you value the time she's set aside for you week in and week out.
Just because you are home, does not mean she can leave you with the baby! OY! Boundaries. 
Honestly, start looking asap.  This fruit won't last, and it kinda smells over-ripe.  

Best of luck!