"Nanny cam" is a colloquial term used to describe small hidden cameras that people install in their homes for the purposes of monitoring a babysitter and making sure their child is not being abused. A nanny cam is often disguised as another object, such as a teddy bear.
It is currently legal in every state to make a video-only recording of anything happening at your home, at any time, without informing anyone. The fact that the camera is hidden has no effect on this concept. If your camera is video only (no sound is recorded), then you can do whatever you like with it, in your own home (but be careful about accidentally recording things beyond that, like the street in front of your yard).
Audio recordings are a different story. While some states have no special laws regarding these either, it is illegal to record someone’s voice without their permission in California, Connecticut, Delaware, Florida, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Montana, Nevada, New Hampshire, Oregon, Pennsylvania and Washington State. The merchant selling the camera will likely be familiar with your state’s laws concerning this, so be sure to ask before you buy anything or consult with an employment lawyer first.
You should be careful to note, however, that since most nanny-cams are wireless cameras, which transmit from the camera to a base (usually a television or computer), the signals can easily be intercepted. Unless the camera is very sophisticated and includes some form of signal scrambling, the camera’s images can be picked up quite easily from up to a quarter-mile away with very basic equipment.
This is all the more disturbing because there is little to no law against this sort of interception. Current wire-tapping laws only provide protection for audio wiretapping, so quite literally anyone with the desire and $200 worth of equipment could use your own camera to spy on your house with legal impunity.
The courts are split over this issue, but most states are leaning toward allowing it to be entered as evidence. While many states have laws regulating the taping of someone in an area where they have an expectation of privacy, most agree that you cannot have such an expectation in a home that isn’t yours. Obviously, there are some exceptions to this rule (your employer cannot put cameras in a bathroom that he expects others to use), but in general, he can film anything in his home, including you, and can later use it in court.
However, if you live in one of the previously mentioned 13 states, and the video has sound, then it will likely violate wiretapping laws, and will not be admissible. But the sound on a video can easily be muted, so unless the incriminating portion of the video is speech itself, the video portion may be allowed into evidence (although the courts have yet to rule specifically on this issue).
Courts only allow these devices to be used for acceptable and "reasonable" purposes, though (i.e. monitoring the baby and/or your behavior with the child, or preventing theft). If the court finds that the cameras were for some illegal purpose (such as voyeurism, or disclosing private information to the public, or using the video for any sort of commercial purpose), then they will certainly not be covered, and may be found liable to you.
Those generally are only applied to businesses. If you are working out of someone’s home, you have little legal recourse to being videotaped without your knowledge. However, this is obviously a very modern issue, so just because there are no current rulings regading it does not mean there won’t ever be.
If you think you have been filmed illicitly, or that a video portrayed you inaccurately and you were charged with a crime (because these hidden cameras usually only transmit 5 frames per second, they can often make movements seem more violent then they are), you should contact a good employment lawyer who can help you protect yourself from false claims as well as discuss the possible liability of your employer.