Family Owes Overtime Pay to Former Nanny after Losing Appeals Court Ruling

The nanny, Maria Blanco, worked nearly 80 hours a week for the family, and the court determined that she should have been paid overtime as she did not reside at the family’s home and, therefore, couldn’t be considered a live-in employee.

The federal Fair Labor Standards Act exempts “any employee who is employed in domestic service in a household and who resides in such household” from receiving overtime pay.

The appeals court ruling overturned a U.S. district judge’s decision to dismiss Blanco’s lawsuit. The three-judge panel said that simply working and spending a significant amount of time at the employer’s house doesn’t constitute “residing” at the home. Blanco, therefore, didn’t qualify for the overtime pay exemption for live-in household employees.

Blanco worked one 23-hour shift and four 14-hour overnight shifts each week as she cared for the family’s four children. She worked for the family for nearly three years.

“No doubt Blanco worked at the house and spent significant time there. But that alone does not mean she ‘resided’ there any more than firefighters who sleep in fire-station dormitories while on duty reside at a fire station,” Circuit Judge Robin Rosenbaum wrote for the court.

In 2021, shortly after leaving the job, she filed a lawsuit against the family, claiming she should have been paid overtime for hours worked over 40 in a workweek. Blanco sought nearly $30,000 in pay and an equal amount in damages.

The U.S. Department of Labor supported Blanco by arguing in its amicus brief that upholding the judge’s decision would improperly exempt many full-time household employees from overtime pay.

Under the Obama administration, the DOL issued non-binding guidance that stated household employees were considered live-in workers if they worked 120 hours or more each week and slept on the employer’s premises five days a week.

The district judge asserted that Blanco resided at the family’s home because she spent a substantial amount of time there and for the number of nights she slept there.

However, the appellate court argued that Blanco’s “time was not hers.” She was required to care for the children during her shifts, even if she was sleeping. Blanco also kept a separate home that she would go to between her shifts. She was only at the family’s residence to work and was rarely there when she was not on duty. Blanco did not have her own key to the residence, and she slept in a bed that was not her own but shared “tag team” style with the other nannies the family employed. It was shared with The court said it was “hardly a typical arrangement at one’s own residence.”

Overtime pay and sleep time rules

While federal law may exempt live-in employees from overtime pay, some states have laws for live-in employee overtime pay that would supersede federal law.

Some of these state laws on overtime pay for live-in employees include:

• Hawaii: live-in employees are not excluded from overtime pay (OT starts after 40 hours)
• Maryland: live-in employees are not excluded from overtime pay (OT starts after 40 hours)
• Minnesota: OT starts at 48 hours in a workweek
• New York: OT begins at 44 hours in a workweek
• Oregon: OT begins at 44 hours in a workweek

Household employers should also be aware of sleep-time rules. Up to eight hours of sleep time can be unpaid, if the employer:

• Provides adequate sleeping facilities
• Allows for 5+ hours of continuous sleep
• Has written agreement with employee

If a live-in nanny is expected to be “on call” during the night and their sleep time is interrupted to care for a child, even for a few minutes, and they don’t get at least five hours of uninterrupted sleep, then the entire eight hours of sleep time is now paid.

The exception is California, which doesn’t allow sleep time to be unpaid.

Takeaways for household employers

Household employers should review their pay practices to mitigate the risk of a similar type of lawsuit brought against them by a domestic worker.

• Household employees should be paid an overtime rate of at least time-and-a-half for hours worked over 40 in a workweek.
• There is an exemption from an overtime rate for live-in employees
• Several states, as noted above, have overtime laws that supersede federal law.
• Up to eight hours of sleep time can be unpaid under certain conditions

For additional guidance or questions, consult with an employment lawyer.

GTM can help

Along with comprehensive nanny tax and payroll services, GTM also offers household human resources (HR) guidance with a PHR-certified HR consultant. We can help with employee handbooks, offboarding employees, insurance requirements, employee benefits, compliance with labor laws, and much more. To get started, call (800) 929-9213. You must be a payroll service client to receive household HR services. These services come with an additional charge on top of payroll plan fees.

Download The Complete Guide to Household Payroll

Get our complimentary guide and learn everything you need to know about paying your employees legally and filing your taxes the right way.