Bad nannies are the wicked stepmothers of the ’90s. “The Hand That Rocks the Cradle,” which features a psychopath who tries to murder her employer and run off with the children, is the top-grossing movie in the country. In a real-life tragedy last month, 3-month-old Kristie Fischer died in a fire in her Thornwood, N.Y., house. Police have charged Olivia Riner, 20, the Swiss woman Denise and William Fischer had hired, with murder and arson. Riner, who pleaded innocent, is awaiting trial. Fortunately, such a case is rare. As more families have two working parents, the demand for live-in child care is increasing. Nannies are now big business. The International Nanny Association, a nonprofit service organization based in Austin, Texas, estimates that there are 75,000 experienced nannies in the United States. For every family who hires one, there are several more waiting.

The term nanny is often used to describe any in-home child-care worker. In fact, a nanny is someone who may or may not have formal training, but usually has experience, often lives with the family and takes on almost all child-related tasks. A nanny often considers the job a career and may be paid commensurately. An au pair is usually a young woman, often from abroad, who lives in, helps with the kids, does some housework and gets a small salary. An au pair (Riner was one) may or may not be experienced, is supervised by the employer and usually stays for a limited period. A babysitter minds the children but is not expected to be trained, or to do housework, may work only part time and usually is not paid as well as a nanny.

Nannies, however, are no longer only for the rich. “This is becoming a real middle-class phenomenon,” says Janet Shannon, executive director of the INA. For families who have room and are willing to sacrifice some privacy, nannies can be both convenient and economical. Larry and Barbara Cafero of Norwalk, Conn., pay $175 to $200 a week for a nanny to look after their two children and do some chores. Some of their friends pay $150 a week just for day care, Larry says, “and they have to bundle the kids up, drive them across town, drop them off at the center and bring them home at night. They have no quality time with their kids. I think I’m paying less money than they are.” Urban families can draw on a pool of immigrants who may have no special training but need a place to live and will work for low wages.

All parents worry about child care, but there are many things they can do to reduce the risk of hiring someone unsuitable. It’s possible, and less expensive, to find a good person through the want ads. But, says a New Jersey father who has hired many nannies for his two daughters, “The worst ones were the ones we found on our own.” Reputable employment agencies can help weed out the bad prospects; some hire private detectives to do background checks. (The INA supplies names of approved agencies.)

The burden is still on the employers (chart). They should double-check every reference, even if they’re using an agency. Most important, they should make their needs very clear. “You have to be absolutely honest about what the job is, that they’ll be emptying the trash as well as playing Candyland,” says Charlotte Smith, a Neshanic N.J. mother of four. “Sometimes nannies come back from meeting parents,” says Sandra Costantino, who runs Neighborhood Nannies in Haddonfield, N.J., “and we say, ‘Did they ten you about their German shepherd that has to be walked?’ The nanny says, ‘No.’ Fido comes up to your waist and, oh yeah, the family just forgot to mention it.” Poor communication is often the root of a nanny problem. Parents should take a few minutes every day to talk to the nanny about the day’s events, and once a week hold a general discussion, including grievances on either side. “Above all,” the INA recommends, “express your appreciation often.”

When there’s trouble, the nanny is not always to blame. Some employers demand too much, asking nannies to wash windows, clean the garage and mow the lawn. Others make more serious demands. Last month, a 23-year-old nanny in California told the wife in the household that the husband was sexually harassing her. The woman didn’t believe her. When the nanny quit, the couple refused to pay. Elaine Santor, owner of Santor ABC Services in Ventura, Calif., the agency that had placed the nanny, convinced her to sue for back pay and report the sexual-harassment charges. Two weeks later the wife called the young woman to say that every nanny she had had made the same complaints. “She knew something was wrong,” says Santor, “but what could she do? She loved her husband.”

“Everybody wants Mary Poppins,” says Carole Johnson, director of Malibu Mamas in Malibu, Calif. “But if she was around today, she would probably be making about $750 a week, have her own guest house, health insurance and a three-week vacation.” With nannies, as with many things, you get what you pay for. A young, inexperienced person can work out well, but if you hire one, says Margaret Ann Campbell, 32, who works for NBC and lives with her husband and son in South Orange, N.J., “you’re also somewhat a parent. You have to set rules.” The INA urges nannies to get some training; the National Council of Nanny Schools in University Center, Mich., is in the process of accrediting various programs. Sacramento’s California Nanny College graduates 200 people (some male) a year. Students get six months of intensive classes in everything from child development and nutrition to infant and toddler health and safety. All are CPR-certified and do a supervised internship while in college. Mary Jo Fanning, 28, couldn’t make ends meet as a day-care worker. Now, after graduating from the nanny training program at Oakton College in Des Plaines, Ill., she’s a nanny for 13-month-old Alex and Kalen Borre, 2, in Chicago. “I love it,” she says. “As far as jobs go, this is it. I feel like I’ve found my niche.”

Maggie Weber, a single parent in Port Washington, N.Y., has three children, including disabled twins. “Nannies have been a lifeline,” she says. She’s learned that what’s most important is to roll with the punches. “I don’t care if we tap dance in banana pudding on the floor,” she says, “as long as it’s a good experience.” The best nannies are remembered happily long after they have moved on. This spring, one of Charlotte Smith’s daughters will be a flower girl in the wedding of her former nanny-proof positive that the hired hand that rocks the cradle can be loving indeed.

Photos: Who’s minding the kids? Rinner after her arrest (top), California Nanny College students learning infant CPR, Fanning with the Borre children (AP, JAMES D. WILSON-NEWSWEEK, DAVID WALBERG)

Hiring a nanny is easy if you follow some common-sense rules.

Be very specific in describing your household and the nanny’s responsibilities.

Reinterview any candidate you’re seriously considering.

Have a prospective nanny spend time with your children and watch how they react to one another.

Double-check all references and ask home-town police if the candidate has a record.

Ask plenty of “What would you do if…?” questions.

If you’re hiring a professionally trained nanny, ask for a complete description of the training.