Calculating Nanny's Overtime
Calculating Nanny's Overtime
Frequently Asked Questions
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How do I calculate overtime for my salaried nanny? What about compensation for occasional overnights?
Many nannies are paid on a salaried basis. What this typically means is that the family has agreed to pay the nanny a pre-determined salary for a given number of hours in a pay period. The full time nanny work schedule is often more than 40 hours per week. It is important to remember, however, that nannies are NON-EXEMPT employees according to Federal Law and are entitled to overtime compensation for hours worked in excess of 40 per week. Minimum wage and overtime requirements are set, as a floor, by Fair Labor Standards Act (FLSA) and states may have stricter requirements of their own. If the household employee receives a "salary" that covers a work week of more than 40 hours, your employment agreement must explicitly state the regular and overtime rates of pay. (See our exclusive Hourly Rate Calculator for help.) Protect yourself... read on.
Setting an Hourly Pay Rate
Stating the employee wage in an hourly pay rate form helps the employer remain compliant with the FLSA and state minimum wage rules and avoids wage disputes with the employee. In a formal dispute (Wage & Hours Board Complaint), a work agreement that simply stipulates a weekly salary will be evaluated based on a 40 hour work week. Our exclusive Hourly Pay Rate Calculator simplifies the conversion of a periodic salary to an hourly wage.
HomeWork Solutions strongly encourages families to develop a written work agreement that documents all terms and conditions of employment. This should include agreed pay rate, hours of duty, paid holidays, vacation/sick/personal days paid and the benefit accrual method.
Structuring FLSA Compliant Work Agreements
How, then, to calculate overtime for the salaried nanny? Employers must first translate the nanny's salary to an HOURLY PAY RATE. The means to do this will be different, depending on whether the nanny lives-in with the employer, or lives-out (come and go).
- Convert the nanny's salary to a weekly one.
Weekly Salary: No Conversion Needed.
Bi-Weekly Salary: Divide the salary by 2.
Semi-Monthly (2x Per Month) Salary: Multiply by 24 (number of payments in a year) and divide by 52 (number of weeks in a year).
Monthly Salary: Multiply by 12 (number of payments in a year) and divide by 52 (number of weeks in a year). - Calculate the number of hours worked in a week.
- If total weekly hours are less than 40, simply divide the weekly salary by the number of hours worked. Result is HOURLY PAY RATE. If total hours GREATER than 40, continue below.
Live In Nanny |
Live Out Nanny |
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Now that the HOURLY PAY RATE has been determined, simply multiply the additional hours worked (above the regularly scheduled/compensated hours) by the HOURLY PAY RATE, applying the overtime differential if a live-out employee, to determine the additional overtime compensation due.
Hourly Pay Rate Calculator Tool - FREE!
Compensation for Occasional Overnights
From time to time a nanny employer may require that the nanny stay overnight when parents are out of town. Employers and nannies alike often question how such overnight stays should be compensated, as the nanny is clearly sleeping for some portion of the time on duty.
Compensation for occasional overnights should be worked out in advance of the occasion, preferably memorialized within the written work agreement. The nanny industry standard practice for overnight care that is BOTH contiguous with a scheduled work day AND the nanny is 'salaried'* is to pay an overnight care differential of 1.5 times the nanny's normal daily rate. Salaried refers to a nanny who is paid a guaranteed weekly rate to cover a fixed number of hours. This means the nanny paid $500 per week Monday - Friday who provides Thursday overnight care would be compensated an additional $150 that week for the overnight portion of her services.
For nannies who are strictly hourly and have no weekly base, families will typically pay the hourly rate for waking hours (remember that time and one half applies over 40 hours) and then a stipend for the sleep time ranging from $50 - 100.
Non-contiguous overnight care - a Saturday night when the nanny is not scheduled to work either Saturday or Sunday - is typically much more generously compensated. Negotiating this type of compensation in advance is a good practice to avoid misunderstanding and conflict with the nanny.
These 'formulas' apply to older babies, preschoolers and older children who have a fixed nighttime routine and sleep through the night. Overnight care for infants requiring attention through out the night - feedings, medications, diaper changes - is a different beast and the family should expect to pay a premium.
* Be careful that the "salaried" nanny's work agreement correctly states her base hourly rate and over time rate. See discussion at the top of this FAQ.
More Information: Publication 926
Fair Labor Standards Act (FLSA) Overtime Rules for Household or Domestic Workers
For More Information contact HomeWork Solutions, Inc.
at 1-800-NaniTax or e-mail and submit a question.
