Erlinda Elemen claims that the 'Basic Instinct' star berated her time and again by calling her 'stupid Filipinos'.
According to Elemen, she began working for Stone, 54, as an back-up nanny before being promoted to head nanny in 2008 when she moved into Stone's house. She was terminated in 2011.
In her lawsuit, Elemen alleges that Stone made derogatory comments about her accent and ordered her not to talk to her children because she didn't want them to 'talk like' her, TMZ reported.
She says that the actress would not give her a break and even forbade her from reading the Bible in her own room.
The nanny claims Sharon tried to take back the overtime she was paid and when she challenged the actress on that, Stone repeatedly verbally attacked her for three weeks in front of guests, staff and others, and then fired her in February, 2011.
Stone's attorney has dismissed the allegations as "absurd".
"This is an absurd lawsuit that has been filed by a disgruntled ex-employee who is obviously looking to get money any way she can."