As employers, we’re required to provide fair compensation to our nanny and that means either providing a solid hourly, weekly, or monthly rate. Many families feel that paying a flat rate is the simplest and most efficient way to do things; however by law a nanny is an hourly employee and entitled to pay for all hours worked at the hourly rate, and may be entitled to overtime. Because the Fair Labor Standards Act specifies that household workers are to be paid hourly, improperly wording your compensation offer to the nanny can put you at risk to unpaid wage and unpaid overtime claims.