Liberal MP Ruby Dhalla has stepped down from her position as the Liberal party's multiculturalism and youth critic, in an effort to address allegations by two former nannies who have claimed they were mistreated by members of her family.

Dhalla released a statement Wednesday explaining her reasons for stepping down.

"This morning I called the leader to personally tender my resignation as Multiculturalism & Youth Critic in order to focus my attention on clearing my name," Dhalla said in the statement. "I will work with the appropriate officials to ensure the facts of the matter are clarified and corrected regarding my family's experience with live-in caregivers and will work vigorously to defend my reputation."

Dhalla said she will continue to represent her Brampton, Ont., constituents.

"I am honoured to represent the people of Brampton-Springdale and I will continue to do so. My constituents remain my first priority," Dhalla said.

Late Wednesday morning, Liberal Leader Michael Ignatieff issued a statement saying he had "accepted Ruby Dhalla's resignation as Youth & Multiculturalism Critic."

"Ms. Dhalla will continue to serve as the Liberal Member of Parliament for Brampton-Springdale," Ignatieff said in the statement. "I look forward to a determination of the facts regarding her family's experience with live-in caregivers."

The nannies' allegations were recently reported in a Toronto newspaper.

The two caregivers were apparently hired to take care of Dhalla's mother, Tavinder Dhalla, at her Mississauga, Ont., home.

But speaking to the Toronto Star, the nannies allege they had their passports improperly seized by Dhalla, that they worked 12-16 hours per day for $250 per week and were made to do non-care giver jobs.

One nanny alleged she had to clean a chiropractic clinic run by Dhalla's brother, Neil Dhalla, and shine his shoes.

"I take the assertions in today's Toronto Star story very seriously. I have hired a lawyer to vigorously defend my reputation and ensure the facts of this matter are fully explored and corrected," Dhalla, 35, said in a written statement issued Tuesday.

The newspaper has written extensively about federal agencies failing to protect the rights of migrant nannies, who are sometimes brought to Canada for work under false pretences.

The two nannies are 31-year-old Magdalene Gordo and 37-year-old Richelyn Tongson.

Dhalla has flatly denied the allegations, and said she had nothing to do with employing the nannies.

"Anyone who has ever worked in our home has been treated with a lot of love, with a lot of care and compassion and money has never, ever been withheld from anyone," Dhalla told the Star.

In a written statement released Wednesday night, Dhalla said she was "saddened and troubled" by the allegations and that a transparent, third-party evaluation was required to clear her name.

Dhalla added that she had requested the ethics commissioner "commence a review to ensure that this matter is resolved in a fair and objective manner."

Dhalla's brother has also denied any wrongdoing in a telephone interview with CTV News.

"These are clearly baseless allegations, and they can't simply bring my sister into the picture," he said.

Ignatieff previously said he was looking into the matter.

Immigration Minister Jason Kenney said he was not aware of the specific allegations levelled against Dhalla and her family, and would not speak about that specific case. But he said employers should not hold the passport of a foreign worker.

"Employers should not be taking their employees' passports and that's the kind of tactic which a lot of, which some caregivers indicate makes them feel that they're especially vulnerable -- that if they don't have access to their own travel documents they can be easily exploited," Kenney told reporters earlier this week, outside the House of Commons.

The Commons standing committee on citizenship and immigration has studied the issues surrounding temporary foreign workers for the past year, and is expected to release a report on Wednesday.

Agencies estimate as many as 30,000 live-in care givers come to Canada each year.

With a report by CTV's Rosemary Thompson in Ottawa