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.
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).
Live In Nanny
Live Out Nanny
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.
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 FLSA allows up to 8 hours of "sleep time" to be uncompensated for overnight care that is BOTH contiguous with a scheduled work day (24 hour+ shift) AND truly affords the nanny 8 hours of uninterrupted sleep. Overtime rules apply, so hours over 40 in the work week must be properly calculated for overtime. Additionally, it is common to provide an additional stipend to the nanny for the occasional overnight.
Let's use an example. Nanny typically works Monday - Friday from 8 AM until 6 PM. She lives out and is paid $850 per week, or $15.45 per hour for the first 40 hours, and $23.18 for the 10 hours of overtime. She stays overnight Thursday - Friday. There are 14 additional hours, 8 that can be excluded if she really can sleep, and 6 to be compensated at the $23.18 overtime rate. Family's written work agreement provides a $50 overnight stipend.
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. The FLSA does not allow a sleep time exemption if the shift is less than 24 hours. At a minimum a nanny who is already scheduled 40 hours or more during the work week is entitled to her overtime rate for the weekend care. If nanny works Saturday 8 PM until Sunday 10 AM she must be paid for 14 hours. The family may or may not choose to provide an overnight stipend in this situation. 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 throughout the night - feedings, medications, diaper changes - is a different beast and the family should expect to pay a premium. When nanny's sleep will be interrupted in these cases, the entire shift must be compensated at the appropriate hourly rate.
Free Tip Sheet: Hourly Wage, Overtime & the FLSA
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