A common term you may hear in the household employment industry when hiring and employing a nanny is “guaranteed hours”.
Guaranteed hours for a nanny may be more convenient for you when paying them each week and preferred by your caregiver. In fact, many nannies – especially more experienced ones – may ask upfront for guaranteed hours.
Setting guaranteed hours may be unique to household employment but is considered an industry standard. Some placement agencies may even require you to offer guaranteed hours to your nanny if you plan to hire through them.
Our friends at GTM answer FAQs about about guaranteed hours for a nanny.
What are guaranteed hours?
Guaranteed hours are the set number of hours your nanny will be paid each week at their hourly rate. It can be 35, 40, 45, or whatever number of hours you need for childcare during a week. As long as they work the number of agreed-upon hours – or fewer – they get paid the same. Any hours worked over their guaranteed hours would be paid on top of their typical pay taking into account an overtime rate for any hours worked over 40 in a workweek.
You can think of guaranteed hours for a nanny as you would if you were sending your child to a daycare facility. If your child does not go to daycare for a day – or even a week if you are on vacation – you still pay the same fee. The daycare facility was available to care for your child – just like a nanny – you just chose not to use them.
In exchange for guaranteed hours, a nanny is guaranteeing their availability to your family during those hours.
How do guaranteed hours for a nanny work?
With guaranteed hours, you would set an hourly rate, an overtime rate (at least time-and-a-half), and the typical number of hours you would need your nanny each week.
Let’s give a couple of examples.
You have hired a nanny with guaranteed hours of Monday-Friday, 9 a.m.-5 p.m. at $35/hour. That means each week your nanny is paid $1,400/week as long as they work 40 hours or fewer.
Let’s say grandma and grandpa want to take their grandkids out for the day. You do not need your nanny that day, but they would still get paid their 40 hours. Or you get home from work a couple of hours early one day, so you let your nanny go home. Again, they still get their 40-hour paycheck.
It is important to note that guaranteed hours only apply to the schedule you have set with your nanny. If they work Monday-Friday and you let them go a few hours early one afternoon, you cannot ask them to come back Saturday night and babysit to “make up” those missing hours. They certainly could babysit for you, but you would need to pay them for those hour.
On those days when you need your nanny to come in early or stay late and they go over their guaranteed hours, then they will need to be paid for those extra hours. If those extra hours put them over 40 hours in a workweek, then they will need to be paid time-and-a-half for any hours over 40.
Why do nannies prefer guaranteed hours?
Your nanny has bills to pay and expenses to account for just like anyone else. Knowing what their pay will be each week helps them with their personal budget and finances. With guaranteed hours, you are providing your employee with a consistent income.
Why should families offer guaranteed hours?
Since guaranteed hours are an industry standard and preferred by more experienced nannies, offering them will help you hire and retain the best caregivers. You will likely keep your nanny for a longer period of time and not have the hassles of going through the hiring process over and over again.
Guaranteed hours also simplify your payroll. It is a set payment each week and with automated payroll processing from a firm like GTM Payroll Services you can set that amount once and forget it. Your nanny will automatically receive their correct pay by direct deposit or live check. You would only need to make changes when your nanny works more than their guaranteed hours.
You are also getting guaranteed availability that your nanny is open to work for you during those hours.
It may seem like a waste of money to pay your nanny when they are not working. But that is a small price when creating a professional relationship with your child’s caregiver. One that you will want to last for years and not lose over a few dollars.
Are guaranteed hours for a nanny like a salary?
Guaranteed hours for a nanny may seem like you are paying them a salary. It can be confusing.
There are basically two types of employees – exempt and non-exempt. Exempt workers do not need to be paid for overtime hours. To be considered “exempt,” an employee must perform executive, administrative, or professional duties and be paid a salary (not hourly). A nanny’s duties do not fall into one of these exemptions. This means they are non-exempt employees under the Fair Labor Standards Act, must be paid for each hour they work and are entitled to overtime pay. It would be illegal to pay a nanny by salary.
With guaranteed hours, a nanny who works 40 hours in a week gets paid for those hours at their agreed-upon hourly rate. Anything over those 40 hours would be paid at an overtime rate. With a salary, a nanny would be paid a flat rate no matter how many hours they worked and would not receive overtime pay. Again, this is illegal for household employees.
How do guaranteed hours work with paid time off?
When considering what are guaranteed hours and what would be considered paid time off, it comes down to a matter of choice. If your nanny chooses not to work during the time they agreed to be available, then that would be time off (paid or unpaid depending on your nanny contract or whether they still have any paid time remaining). Calling in sick or taking a vacation day would not be part of their guaranteed hours and would count towards their allotment of time off. If they are available, and you do not need them to work, then they would be paid as usual for those hours.
How do guaranteed hours work when the family is on vacation?
If you go on vacation and are not bringing your nanny with you, then they would be paid their guaranteed hours. They are available to work even though you do not need them for that week. Some families may just tell their nanny to take the week off. Others may have their nanny do errands, odd jobs, or light housework and organizing while they are away. Any tasks you ask them to do should fall within their normal working hours and be included in their job description. If that is the expectation, it should be spelled out in your nanny contract so there are no surprises when you take your vacation.
Some families may state in their work agreement that the nanny needs to use a week of their paid time off at the same time the family takes their vacation. In that case, your nanny would not be available for any tasks during the week you are away since they have time off.
We recommend GTM Payroll Services for all of your household payroll, tax, and compliance needs.
What does this mean for you?
As a valued client of Aunt Ann’s you’ll receive:
- Savings of $200 annually when choosing GTM over Care.com’s HomePay
- Setting your payroll once and having GTM automatically process it every week.
- Easily make changes online at your convenience.
- Superior security controls keep your financial data safe and help prevent fraud and identity theft.
- Online access to account information and self-service portal for employees.
- Unlimited phone, email, and live chat access to household employment experts.
- Integration of employee benefits like health insurance and 401k plans with your payroll.
GTM has been serving families with household help for more than 25 years and provides an exceptional level of support.
GTM Payroll Services relieves the administrative hassles of household payroll for domestic employers by providing a one-stop shop for payroll, tax filings, compliance and insurance. No risk. No hassles. No worries. If you or your employer have any questions about domestic employment, call (1-800-929-9213) or email GTM for a free, no obligation consultation.