Understanding Nanny Pay: Salary vs. Guaranteed Hours

Hiring a nanny is a significant decision, and it’s natural to have many questions. One of the critical areas families often wonder about is pay structure. You’ve probably heard terms like guaranteed hours and salary, but it’s important to know they are not the same thing. When it comes to household employment, paying a nanny a true salary is not allowed under U.S. law due to FLSA overtime rules. Let’s break down guaranteed hours and how they differ from a salary.

What Are Guaranteed Hours?

Guaranteed hours ensure your nanny has a consistent paycheck, even if the family’s needs change week to week. This means that if you guarantee 40 hours of work each week but end up needing less help on certain days, your nanny still gets paid for the full 40 hours. It provides financial stability for your caregiver, so they can count on their income regardless of how your family’s schedule shifts.

Here are a few examples of when guaranteed hours might apply:

• You take a family vacation but leave your nanny behind.
• Relatives come into town and want to spend time alone with the kids.
• A parent returns home earlier than expected and dismisses the nanny for the day.
• The nanny or child has a minor illness; the nanny is ready and willing to work, but the family opts to keep everyone apart as a precaution.
• Any scheduled hours where the nanny is available to work, but the family doesn’t need her.

In these situations, the nanny would still be paid for her guaranteed hours.

How Does a Salary Differ from Guaranteed Hours?

The term salary usually refers to a fixed wage for exempt employees, who are paid the same amount regardless of their work hours. Only certain types of workers, namely office workers, managers, salespeople, and computer professionals, can qualify as exempt under the law. Nannies and other household workers are considered non-exempt employees under the Fair Labor Standards Act (FLSA), which means they must be paid hourly and are entitled to overtime for any hours over 40 in a workweek under federal law. Some states have additional rules that entitle workers to daily overtime as well. Check out our state-specific quick facts sheets to see what the laws are in your area.

While guaranteed hours provide stability, your nanny’s pay is still based on an hourly wage. If she works extra hours beyond her regular schedule, additional pay will be due. If those hours are above 40 hrs. per week, she is owed overtime at 1.5 times her regular rate under federal law. Unlike salaried employees, nannies can’t be paid a flat amount that disregards extra hours worked. Misclassifying your nanny as a salaried worker without proper overtime pay can lead to legal trouble, so following wage laws carefully is crucial.

Why Offering Guaranteed Hours is a Smart Move

Providing guaranteed hours is a key benefit that professional nannies often look for. Offering this stability helps you attract top talent and builds trust and loyalty with your caregiver. After all, peace of mind goes both ways—your nanny can count on a reliable paycheck, and you can count on her commitment to your family.

Need Help Navigating Nanny Pay and Labor Laws?

Managing nanny payroll can feel overwhelming, especially when it comes to complying with wage and labor laws. HomeWork Solutions has been helping families like yours with household payroll and tax compliance since 1993. If you have any questions or need support, we’re here to guide you every step of the way.

Contact us today for personalized payroll advice—we’ll ensure everything runs smoothly so you can focus on what matters most: your family.