How to Navigate a Guaranteed Hours Policy for a Nanny, Personal Assistant, House Manager or Other Household Staff
Attracting high-quality candidates to fulfill your family’s nanny needs means offering a high-quality, professional opportunity. One of the most important ways to show your nanny that they’re a valued and respected employee is to ensure that they are well paid. Providing adequate compensation goes beyond what a family offers per hour for pay. Nannies will, and should, be looking for families offering to pay guaranteed hours.
Guaranteed hours is an employment benefit that has become an industry standard for household employees/nannies. In fact, many agencies, such as My Household Managed, will suggest that families offer 20 or more guaranteed hours when hiring a long-term nanny.
What Does “Guaranteed Hours” Mean?
Guaranteed hours are a set amount of hours that a nanny commits to working each week. It is the nanny’s responsibility to be available for this amount of time each week, much like a daycare promises to be available during certain hours each week. In turn, it is the family’s responsibility to pay the nanny for these guaranteed hours every week. This creates stable employment for the nanny and can help families retain quality care providers.
The employing family agrees to pay their nanny for guaranteed hours each week, even if they choose not to use their nanny’s services for all of those hours in a week. That means if the family releases their nanny a few hours early on a Friday, they still get paid for the hours they were committed to working. The same goes for any time a family takes a vacation without their nanny or has other family commitments when they won’t need their nanny to work.
GTM Payroll & HR recommends that if a family would like their nanny to take care of their home while they are away on vacation or requires their nanny to use their vacation time during the same week as the family, these details, “should be spelled out in your nanny contract so there are no surprises when you take your vacation.”
Are Guaranteed Hours a Salary?
As household employees, nannies are considered hourly workers and cannot legally be paid a salary according to the IRS. A salaried worker does not get paid for extra hours worked, which is one of the reasons that guaranteed hours are not a salary. There are a few ways a nanny’s pay could fluctuate in a given week.
One variation in guaranteed hours pay can occur if a nanny has used all of their paid sick time and needs to take off additional time for illness. In this case, they would not be paid for the additional hours taken off.
Any hours over a nanny’s guaranteed hours should be paid. Overtime pay should be offered for any hours over 40. In fact, in some states, Including Illinois, overtime pay is legally required.
Families also can’t ask their nanny to ‘make up’ hours they were guaranteed. This means if your nanny leaves early on Friday, they can’t be asked to return for a few extra hours the next day or be expected to work those hours the following week. This is called banking hours and according to Home Work Solutions, it is illegal to do.
How Do I Pay My Nanny for Guaranteed Hours?
A bonus to guaranteed hours is that they make paying your household staff simple. Guaranteed hours pay can be automated through a payroll processing system, like GTM Payroll & HR. Payroll systems offer added protections for nannies such as verifiable income and proof of employment as a W-2 employee as well as benefits to families such as ensuring that all the appropriate employer taxes are paid.
You’ve got enough on your plate in your day-to-day life — let us make your life easier by handling your unique household staffing needs.
If you are a family looking to hire a household employee or other home service, submit an application with My Household Managed.
If you are a professional nanny, house manager, or other household employee looking for a job, apply at My Household Managed.
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