Hi M.,
I think at this point, most of the world has herpes of some form, mainly on the lips or face. Some people call them cold sores, but a cold sore is herpes, just a different type than the one you get in the genital area. There are certain times when it is VERY contageous, mostly when you can see the oozy outbreak. She should NOT touch her face whatsoever during this time as she could even spread it to herself. Most people get it innocently enough, by getting kissed by an aunt when they are little, or by kissing as teens when they are not aware of what it is, or even by using the same towel.
I'm guessing she told you that she has this which is very noble of her. If so, I would have her wear gloves when changing the baby's. The main concern if she does wear the gloves is when the kids get close to her to hug her or horse around with her. I have herpes on my chin from a boyfriend. He had been to the doctor but the dr just told him it was a virus, which it is, but the dr never said the "H" word which he should have so we would have been horrorified by the word, and we would have been way more careful. A simple kiss from a boyfriend 20 years ago has left me with a lifetime of this disgusting virus. as it lays dormant in the back of the neck until something causes an outbreak (it is never contageous while dormant, only when there is an outbreak)
Now, I have two kids. I am VERY careful not to let them too close to me when I have the outbreak which can last up to 10 days if untreated. The have never gotten it and will never get it from me if I can help it. They are more at risk of getting it on their faces because I don't touch it with my hands and I make it a point to wash my hands more often anyway when I am having an outbreak.
There is medecine that the dr can prescribe so that she may never get it again called Valtrex, or there is medicine that she can take as soon as she feels the tingle that will totally shorten the length of time she has it to maybe even a couple of days, and it may not get to the point where it is contageous. I got it a lot when I first started getting it, now I hardly get it once a year. Stress, sunlight, and menses are three of the most common things that can bring it on.
There are so many people that have it and we are not even aware, at least you know and you can take appropriate measures, whatever that means for you. I certainly would not fire her if she is good to your kids as it is not her fault that she has it. Good luck, oh, and I have two girls also, 3 and 6:)