Legal Question in Landlord & Tenant Law in New York

This can be a tough one to answer without having more information and a copy of the ad. It appears she is an employee and NY is an at-will employment state. Having said that, I personally would be very concerned about someone doing something like this that is not just living in one's home but also watching the kids. Going forward, I would recommend seeing an attorney to put everything in writing and for further guidance because your brother can be running afoul of Labor rules on how much she is being compensated, and I don't know the rules in detail on live-in nannies/babysitters off-hand. I know child care is so expensive and having a babysitter/nanny partially compensated by not having to pay rent and utilities, which the parents would be paying for anyway as part of their overhead (plus any additional costs to feed her and her pets, maybe a bit more on the utilities) helps make this far more affordable for people, and hence getting an attorney beforehand is tough but may, as we see here, a necessary thing. The sitter needs to consider that it is difficult to find a rental when you have pets unless you put up a large security deposit and pay first and last month's rent, plus landlords usually want great credit, income and reference checks from where a potential tenant was living before. This puts her at a disadvantage should she attempt to find a rental, so odds are, she is actually apparently, depending on her hours and conditions, doing OK living in a situation like this, and should she no longer have this job, finding another live-in position. This is not the time to be penny-wise and pound-foolish so next time, perhaps consult an attorney.