Prepare for New Household Employee Overtime Rules

Posted by HomeWork Solutions on May 18, 2016 8:46:51 AM

Household employee overtime rules are commonly misunderstood, and often just plain ignored. The vast majority of household employees - nannies, senior caregivers, housekeepers, etc. - are classified as non-exempt (NOT exempt from overtime rules) employees. These household employees must be paid overtime. At the Federal level the rate of overtime pay is determined by whether the household employee lives with the employer or maintains their own separate residence. Live-in domestics are paid for their overtime hours at their regular hourly rate; live-out domestics are paid at 1.5 times their hourly rate for hours over 40 in the 7 day work week. Note MANY states extend the overtime differential of 1.5 times the hourly rate to live in domestics, and some states mandate daily, not weekly, overtime.

However some more skilled household employees - estate managers, head housekeeper or house managers for example - may be considered exempt or hourly employees. This classification is largely depended on the actual work performed and not on the employee's title. This is where the change is coming!

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Topics: overtime rules, nanny overtime

The Facts About Nanny Overtime

Posted by HomeWork Solutions on Oct 22, 2015 2:49:00 PM

When you have found a nanny that you trust and that your kids love being around, it’s a great feeling. Finding the right fit for your family can be tough at first, but once you’re over that hurdle, you can begin to rely on your nanny taking good care of your family while you’re away. If this means that you ask her to occasionally work more hours during the week or on the weekends, you should know the facts about paying your nanny overtime. Here are some basic 'must-know' facts about nanny overtime.

Special Update May 18, 2016: Effective December 1, 2016, ANY employee in the US, exclusive of live-in domestics,  who earns less than $913 for a 40 hour week ($22.83/hour) MUST be paid hourly and MUST be paid overtime at the rate of 1.5 times the regular hourly wage for hours over 40 in a 7 day work week.

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Topics: nanny overtime

Nanny Overtime: Just the Facts

Posted by HomeWork Solutions on Feb 12, 2015 7:00:00 AM

There’s all kinds of advice floating around out there about how to handle a nanny’s wages. Here, we’ve included only the facts on nannies and overtime:

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Topics: nanny hourly wage, nanny non-exempt employee, nanny overtime, nanny work agreement, nanny contract

What does the FLSA have to do with a Household Employer?

Posted by Vanessa Vidal, FPC on Nov 27, 2013 5:21:00 PM

Did you know that when you employ a nanny, housekeeper or other household employee who does not reside in your household, you must comply with FLSA overtime regulations?

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Topics: FLSA, overtime rules, nanny hourly wage, domestic employer legal responsibilities, nanny overtime

Court Affirms Undocumented Workers Are Entitled to Recover Unpaid Overtime Under the FLSA

Posted by Kathy Webb on Apr 3, 2013 1:56:00 PM

The Lamonica v. Safe Hurricane Shutters Inc. (11th Cir., 11-15743, 3/6/2013) ruling by the Eleventh Circuit Court confirmed that a worker's immigration status has no bearing on the worker's right to sue to recover unpaid overtime pay. The decision affirmed a lower court ruling in favor of the undocumented workers that awarded unpaid overtime and damages.

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Topics: domestic employer legal responsibilities, nanny overtime

NYTimes Article Confuses Household Workers' Rights

Posted by Kathy Webb on Nov 27, 2012 5:25:00 PM

Household employees - nannies, maids and housekeepers - and the families that employ them often don't understand how payroll tax, labor law, and the unemployment insurance system apply to this particular employment situation.

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Topics: domestic employer legal responsibilities, nanny non-exempt employee, nanny overtime

Don't Forget the Nanny Overtime

Posted by Kathy Webb on May 17, 2012 7:34:00 AM

Most nannies and their employers work and are paid on a set weekly schedule; however, from time to time the family will require additional hours from their nanny. Legally, nannies are entitled to additional compensation for additional hours worked, and live out nannies, at a minimum, are entitled to the overtime differential (1.5 times the hourly rate) for hours worked over 40 in a work week. *

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Topics: nanny employment practices, domestic employer legal responsibilities, nanny overtime

Calculating Nanny Overtime

Posted by HomeWork Solutions on Aug 25, 2011 9:12:00 AM

Many families have children heading back to school this month. It is not uncommon for a nanny who cares for both an elementary school child and a pre-schooler or younger to negotiate two different hourly rates - one for one child only, the other for both. The puzzle for many nanny employers is how to calculate the correct overtime rate. Legally, the "regular rate of pay," that which is used to calculate the overtime differential, must be at least the weighed average of all rates used in the work week. Here is an example:

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Topics: nanny payroll, nanny hourly wage, nanny overtime

Smartphone App Suitable for Nannies Introduced

Posted by Kathy Webb on Jun 19, 2011 8:40:00 AM
The US Department of Labor has introduced a new spartphone "app" to help hourly employees (nannies, housekeepers, maids and other household employees are ALL hourly under the Fair Labor Standards Act [FLSA]) track the hours they actually work. This is all a part of an effort to aide employees in independently tracking their work hours, independent of employer records, and will assist them in prosecuting claims for unpaid wages and unpaid overtime.

The free app is currently available for iPhone and iPod Touch. According to the US Department of Labor's press release, workers without a smartphone may access the US DOL's Wage and Hour Division's printable work hours calendar in English and Spanish to track rate of pay, work start and stop times, and arrival and departure times. The calendar also includes easy-to-understand information about workers' rights and how to file a wage violation complaint. Both the time card app and the printed forms are available here.
This is a huge advance for nannies, and an area of considerable risk for household employers. According to the US Department of Labor, these are the areas they routinely cite employers for failure to meet FLSA and other legal requirements:
  1. Failing to correctly classify non-exempt and exempt employees. This is the mistake investigators often target first. Household employees are non-exempt. This means they are required to be paid on an hourly basis, and that all household employees who do not live with their employers must be paid overtime. New York and Maryland extend overtime requirements to live in domestics - be sure you know your local rules and regulations.
  2. Failing to calculate overtime pay correctly.
  3. Misclassifying employees as independent contractors. According to the US Department of Labor's Wage and Hour Division [WHD], the "misclassification of employees as independent contractors is an alarming trend."

    Often, the WHD adds, "workers are deprived of overtime and minimum wages, forced to pay taxes that their employers are legally obligated to pay and left with no recourse if they are injured or discriminated against in the workplace."

    When the WHD finds cases of misclassification, it may refer the cases to state agencies and the IRS. Nannies ARE NOT independent contractors and employers who incorrectly treat them as such do so at considerable peril.
  4. Failing to pay for work during missed meal and rest periods. Wage-and-hour laws require employers to pay non-exempt employees for all time worked. Most nannies, and many household employees work without meal breaks or rest periods, and employers are required to pay for the time. If the nanny is not free to leave the premise on meal and rest periods, they must be paid. And when the extra time results in an employee putting in more than 40 hours in a workweek, the employer also owes overtime pay.
  5. Failing to pay for certain on-call time. If an employer engages an employee to wait to be put to work, the individual must be paid for the on-call time. Nannies who are required to be available during hours a child is in pre-school or in an organized activity such as sports practice session are considered on-call.
    10 Tips: Avoid Common Nanny Payroll Mistakes
  6. Failing to keep required records. Federal law requires employers to keep accurate and contemporaneous time tracking records. So if there is a dispute with an employee about hours and pay and the employer is unable to show accurately recorded time records, courts will favor the employee's claims and records. This new smartphone app makes it easy for the nanny to track work hours.
  7. Substituting comp time for overtime pay. Under federal law, compensatory time off or comp time in place of receiving overtime pay is generally only legal for government employees. Federal law generally requires that employees get paid overtime for all hours worked over 40 in a seven-day workweek established by the employer. (Note: Some states such as California require overtime pay for hours worked over eight in a day.)
  8. Taking unauthorized deductions from paychecks. An employer can only legally deduct from an employee's earned pay the amounts required or authorized by law (such as Social Security, income tax deductions, and court-ordered garnisheed amounts) as well as deductions authorized by the employee (such as deductions for insurance premiums and loan payments).

    Examples: A household employer cannot deduct amounts from a nanny or household employee's pay to cover damages to household property, including an auto provided for the nanny to transport the children or damage/breakage while cleaning, cooking, etc. And an employer cannot withhold a departing nanny's final paycheck as a way of collecting an amount the individual owes on a loan previously obtained from the employer -- unless the nanny has given authorization in advance.
  9. Failing to abide by state laws. States may have their own version of federal wage and hour rules. So employers need to be aware of and comply with the laws in the states where they have employees.

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Topics: worker misclassification independent contractor, nanny employee, domestic employer legal responsibilities, nanny return of family property, nanny non-exempt employee, nanny overtime

Update - California Domestic Worker's Bill of Rights

Posted by Kathy Webb on Jun 3, 2011 10:25:00 AM

California Assembly Bill AB889 passed the assembly in June 1 and now moves to the California Senate for consideration. We previously blogged on this bill last month. In addition to the workplace rules described in the previous blog, HomeWork Solutions has recently learned that household employers will now be required to provide itemized pay stubs with each wage payment. The requirements include:

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Topics: nanny workers compensation insurance, nanny employment practices, domestic workers bill of rights, domestic employer legal responsibilities, nanny overtime

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