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Two terms are unique to the household employment industry:\u00a0guaranteed hours<\/a>\u00a0and banking hours. While interrelated, the first is an industry standard, and the latter is illegal.<\/p>\n To understand banking hours, let\u2019s first explain\u00a0guaranteed hours<\/a>.<\/p>\n If your nanny works the agreed-upon hours \u2013 or if you as the employer tell them they can work less hours\u2013 they still get paid the same. Any hours worked over their guaranteed hours would be paid on top of their typical pay, including an overtime rate for any hours worked over 40 in a workweek. Guaranteed hours are a guarantee of income, not a cap on hours.<\/p>\n Guaranteed hours for a nanny may be more convenient for you when paying them each week and preferred by your caregiver. Many nannies \u2013 especially more experienced ones \u2013 may ask for or expect guaranteed hours from the beginning of employment.<\/p>\n 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 \u2013 or even a week if you are on vacation \u2013 you still pay the same fee. The daycare facility was available to care for your child \u2013 just like a nanny \u2013 you just chose not to use them.<\/p>\n Read\u00a0What are Guaranteed Hours for a Nanny?<\/a>\u00a0for additional information.<\/p>\n Banking hours occurs when a family requires their nanny to make up unworked hours that were paid under guaranteed hours outside of the agreed upon schedule.<\/p>\n Let\u2019s use this example.<\/p>\n Your nanny has guaranteed hours of Monday-Friday, 9 a.m.-5 p.m. at $20\/hour. That means each week your nanny is paid $800\/week as long as they work 40 hours (unless you as the employer has them work less)<\/p>\n Let\u2019s say grandma and grandpa want to take their grandkids out for an afternoon. You do not need your nanny during those five hours, so you let them go home early. Under guaranteed hours, they would still get paid 40 hours because they were available to work, and you chose not to use their services.<\/p>\n With banking hours (again, illegal, which we\u2019ll get to in a moment), you could ask your nanny to \u201cmake up\u201d those five unworked hours the following week, outside the agreed-upon schedule, or at some other time in the future. The banked hours would be unpaid.<\/p>\n In this example, your nanny could conceivably work their normal 40-hour workweek, return on Saturday for date night, and work five unpaid hours.<\/p>\n While you won\u2019t find the term \u201cbanking hours\u201d in federal labor laws, the\u00a0Fair Labor Standards Act<\/a>\u00a0does state that \u201ccovered employees must be paid for all hours worked in a workweek<\/a>.\u201d<\/p>\n Also, \u201cthe workweek ordinarily includes\u00a0all time during which an employee is necessarily required to be on the employer\u2019s premises, on duty or at a prescribed work place<\/a>.\u201d<\/p>\n Nannies and other household workers are considered \u201ccovered employees<\/a>\u201d under the FLSA.<\/p>\n Back to our example above. If a family would like their nanny to work extra for a date night or some other reason, those hours must be paid (at an overtime rate if the hours exceed 40 in the workweek) even if the caregiver had \u201cunworked\u201d hours from a previous pay period.<\/p>\n Let\u2019s say your nanny has guaranteed hours, and you let them go early on Tuesday afternoon because you came home from work early. Can you ask your nanny to stay late on a different day that same workweek to \u201cmake up\u201d the hours missed? Legally, that may be ok, but it could depend on your\u00a0work agreement<\/a>. If your work agreement states that guaranteed hours are 9 am \u2013 5 pm Monday- Friday, you likely can\u2019t require your nanny to stay late or come in early on a different day. They may do so as a courtesy, but they may not be obligated to agree to your request.<\/p>\n If you pay your nanny guaranteed hours every two weeks, you wouldn\u2019t be able to move unworked hours from one week to the next. That\u2019s because of the FLSA rule that nannies must be paid for all hours worked in a workweek. The timing of their pay isn\u2019t a factor.<\/p>\n If your nanny has guaranteed hours and you go on vacation, your caregiver still gets paid as if they worked a full week. They were willing and able to work, and you chose not to use their services.<\/p>\n Another option \u2014 if agreed to by both parties \u2014 is to have your nanny perform other duties while your family is away. They could house sit, pet sit, pick up the mail, clean and tidy the house, or run errands. Remember that your nanny is a professional child caregiver and may not agree to do household chores, but it may be worth exploring with your employee.<\/p>\n You could also\u00a0take your nanny on vacation with you<\/a>.<\/p>\n You shouldn\u2019t bank hours because it\u2019s illegal and will open you up to a wage claim by your employee.<\/p>\n Banking hours can also damage your relationship with your nanny. If they\u2019re working more hours during a week because of banking hours, it\u2019s likely on the weekend, early in the morning, or at night. That cuts into their downtime and disrupts their schedule, especially if banking hours is extensive or happens frequently. This can cause resentment, frustration, and burnout on your nanny\u2019s part. If you find an exceptional nanny, treat them like a professional to maintain a positive working relationship.<\/p>\n GTM Payroll Services handles guaranteed hours for hundreds of families and can help you comply with federal and state tax, wage, and labor regulations. Call\u00a0(800) 929-9213<\/a>\u00a0for a\u00a0free, no-obligation consultation with a household employment expert<\/a>\u00a0to discuss hiring a nanny and paying them the right way. Or\u00a0schedule time with us at your convenience<\/a>.<\/p>\n Download Your Guide to Hiring a Nanny. In this guide, we lay out the steps on how to hire a nanny the right way and maintain a strong relationship with your employee.What are guaranteed hours?<\/h2>\n
What is banking hours?<\/h2>\n
Why is banking hours illegal?<\/h2>\n
Can I \u201cbank hours\u201d for later in the pay period?<\/h2>\n
What if I pay my nanny every two weeks?<\/h2>\n
What happens when my family goes on vacation?<\/h2>\n
Other considerations when banking hours<\/h2>\n
GTM can help<\/h2>\n
Hiring a nanny?<\/h2>\n
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