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@runnerd: We don't have a nanny, but my husband and I both sometimes have to do work from home while the other one watches the kids. Our office is off of our foyer and even then it's impossible for the kids to restrain themselves from barging in. So, we always go up to our 3rd floor bonus room where are 100% out of sight of the kids. If our office was in between the kitchen and the living room this would be impossible (for us anyway). The person working wouldn't be able to accomplish anything and the nanny would be spending her whole day trying to distract the kids from bothering mom and dad. So if you want to do this, I would move the office to the basement where you are out of sight and just not interact with the kids at all (and pay the regular expected rate to your nanny).

I guess I don't see why having the office in between the living room and kitchen doesn't work...as long as it has a door you can fully shut and the kids can't see into it, is it an alcove or something?

What's your basement like...I can't imagine working in a basement unless it's got a ton of natural light.

BTW--our nanny tries SO HARD to be "out of the way" when my husband works from home, that she will sometimes go sit in our girls room while our youngest is sleeping--and just read her phone in the dark! We've told her she's welcome to just hang in the living room, but I guess she feels awkward. Most nannies will feel awkward just hanging around while you two are home, even if it's well deserved break time while the kids are sleeping.

So I would make a plan with your husband now to let her know expectations up front--like, if kids are asleep, you know it's her lunch/break time and you don't expect her to be doing anything except eating her lunch and taking a break.

@runnerd: Then yeah, I would think you need to move to the basement, or put up doors. Maybe French doors, and then do a roman shade over the glass?

@runnerd: our house has a similar setup to yours I think (dining room where I set up shop when I WAH that is open to kitchen on one side and main hallway on other) and it's a pain to work there if our nanny share is at my house. It's definitely more of a pain for the nanny than for the WAH parent. I agree with @Truth Bombs: that to make it work regularly, you probably need to relocate the office to the basement.

I WAH mostly and having the kids at home worked out fine for a period of time. I started when DS1 was 3.4 and went to school 2 days a week. He was old enough to understand that he could not interrupt me. DS2 was 9 months when we got the nanny and he started going to school 3 days when he was 21 months. At first it was great b/c I was still nursing so didn't need to pump. As a toddler, it worked fine for DS2 and for the most part he didn't interrupt me except a few times a day when nanny knew it would be ok (after lunch or after an outing). HOWEVER, when we stopped using a nanny and he was in school more after age 2, the days when we did have him home with a sitter he interrupted me all day. My office is right off the family room with french doors so I'm clearly seen. We are getting a nanny again for the fall b/c of new baby but the older kids will be in school 5 days.

I don't think you can offer to pay a reduced rate b/c you are home....since you don't want to help with child care during work hours or for them to interrupt you.

I WAH two days a week with a nanny watching my baby and my 3 year old niece at my house. For me, having a door I can shut is absolutely necessary to keep the kids from coming in and wanting to play/nurse/be held. I even try to wait till they're asleep or outside to get lunch or go to the bathroom, because the second they see me they're all over me and want to follow me into the office. My nanny's pretty great about distracting them and letting me get work done, but I still need the door. So, yeah, your setup would never work for me.
I pay the nanny exactly the same as I would if I were not at home. She says (and I believe her) that her job is more difficult with me there because she needs to run interference on the kids disturbing my work and they're occasionally less well behaved when I'm around - like asking me for something she says they can't have or trying to get away from her to find me.

My husband's office is situated same place as your's but we have solid French doors so he isn't visible. He wears ear plugs or headphones to block out any extra noise and both our boys have been trained to never go in the office unless we are with them. So the boys never really try to go in there. Sometimes the boys will go and knock on his door and say hi through the door, but DH thinks it's cute.

Generally if they are home with me or a sitter we keep them out of the house, but arrange interaction with the SAH parent at designated times so that the boys don't feel the need to try and bother the WAH parent. So DH will eat breakfast with the boys and then say daddy has to go to work, bye! And then he's in his office. Then usually DH will pop out to pour himself a coffee when the boys are having morning snack. Then he joins them for lunch. Then he usually gets them up from their naps. Then we always eat dinner together and DH handles baths.

Our sitter usually takes our eldest to the park after breakfast, then comes back for a light morning snack and a little screen time to cool off, then some quiet play like coloring until lunch. If there's time between lunch and nap there's some outside patio time. Then nap. Then another light snack and playing with toys until dinner. The 1 year old follows the same schedule but I prefer he takes a morning nap for about an hour at some point, which happens while the toddler is having screentime and coloring before lunch.

I think the key is to not be visibly around. My husband is on calls all day so we can hear him but that doesn't bug the kids. It's more when they see him and don't get to talk to him they get weird. Creating regular times to talk to him really helps.

Mine is a more infrequent situation with my 16 year old babysitter who currently comes over 2-4 times a month for 4 hour chunks so I can work- which will increase to 4-8+ now that DD is out of school for 10 weeks.

For me I don't expect a ton and am ok with occasional interruptions because I'm on the computer editing and doing email- not on the phone. Also she's a teen not a professional nanny- so it's not second nature for her to be good at distracting when T is crying for me. Sometimes DH is WAH too and it's more important that T is kept upstairs or in her room since he is often on the phone. I think it really depends on the skill level of the nanny and the temperament/age of the kid.