Sharon Stone has reached a settlement with her former nanny, after she claimed the Oscar winner insulted her Filipino heritage.

Erlinda Elemen was fired by the star in February 2011, after Sharon reportedly discovered she had wrongly been paid overtime, and Ms Elemen alleges Sharon made a number of disparaging comments about Filipinos, including calling them stupid people.

According to the lawsuit, 'Basic Instinct' star Sharon ''criticised Plaintiff for frequently attending church and, on one occasion, forbade Plaintiff from reading the bible in Plaintiff's room in Defendant's residence,'' and ordered her not to speak to her three kids Roan, Laird and Quinn because she did not want them ''to talk'' like her.

The former nanny claimed she would work seven days a week at times but the actress accused of her ''stealing'' for getting overtime pay and demanded that she pay her back.

According to court documents, obtained by gossip website, the settlement was reached on May 31 but the terms will be kept private.

The former nanny had been seeking unspecified damages.