According to the Department of Labor (DOL), when you hire a nanny, senior caregiver or other household employee, you must pay them hourly instead of giving them a set salary each pay period. The reason is because the type of work that in-home caregivers do doesn’t meet the exemption tests under the Fair Labor Standards Act that allows you to prevent them from earning overtime.
This means you, as a household employer, need to take extra care when tracking your caregiver’s hours. Fluctuations to what you expect your caregiver’s work week to be can result in needing to pay them more than what you’re used to. And since taking care of children or aging loved ones rarely goes exactly as planned each week, this may happen more often than you think. Tracking hours can also get confusing when travel or overnight shifts are needed.
Here are a few common questions about wage and hour laws we hear from families and what you can do to make sure you don’t accidentally break the law or short-change your employee.
How does overtime work for nannies and caregivers?
Household employees are generally considered non-exempt, which means they are entitled to time-and-a-half for all hours over 40 in a 7-day work week. This is true whether they are full-time, part-time or a temporary back-up caregiver. Failure to pay overtime correctly is a common mistake with very expensive consequences if a former employee files a successful wage dispute with the state. You can be held liable for the overtime wages you failed to pay, as well as be fined for not complying with federal and state labor laws.
Note: In most states, live-in employees do not have to be paid overtime. However, several states (CA, HI, MA, MD, ME, MN, NJ, NV, NY and OR) have special overtime laws for live-in employees. You can check the specific requirements in these states here. Additionally, senior caregivers providing companionship services (fellowship activities, such as reading, games, crafts, conversation and watching TV) are exempt from overtime in most states.
How does payroll work for overnight and 24-hour shifts?
It’s common for nannies to stay overnight at a family’s home from time to time. And senior caregivers can work 24 hours or more on a regular basis if the person they’re caring for requires around-the-clock care. Federal wage and hour law states that household employees do not have to be paid for up to 8 hours of sleeping time when they work 24 consecutive hours or more.
Note: Employers in California are unable to take this sleep time exemption.
It is important to remember that this law can only be applied if your caregiver can actually sleep for this extended period of time uninterrupted for at least five of the eight hours. Your caregiver must also be given adequate sleeping arrangements, such as a guest room.
How do I track hours if I travel with my caregiver?
Many families want or need to have help while on vacation. When travelling with your caregiver, federal law requires you to compensate them for all hours worked during the trip, including time spent traveling. Your caregiver’s travel expenses, such as airfare, lodging and meals, are not taxable income to the employee. They are expenses you incur to have them on-the-job when they travel – much like you would receive if you traveled for your job.
The hours your caregiver works when traveling are treated no differently than when they are working in your home. Because it’s vacation, there is often a question about what should be considered working time. The rule of thumb is that if your employee is not free to come and go on their own, they’re working for you. Even if it means they’re sitting with you by the pool while your kids play, it’s considered working time if you’re requiring them to be there.
Remember if the working time exceeds 40 hours in a 7-day period, you are required to pay overtime at a rate of 1.5 times the regular wage. If you’re not used to your employee working more than 40 hours in a week, it’s a good idea to write down their daily hours while you’re on vacation so you don’t make a mistake calculating their payroll.
Am I required to give sick time and vacation time to my caregiver?
Federal wage and hour law does not require families to provide paid time off to their employee for sick days or vacation days. However, many state and local laws do require some form of paid time off and it’s an important benefit to offer in order to attract and retain a quality caregiver.
Ideally, any paid time off should be discussed in the interview process and detailed in an employment contract so all parties are on the same page from day one. Additionally, please check the paid time off and/or paid sick time requirements in your state or contact HomePay at (888) 273-3356 to make sure you’re in compliance.
Next Steps: