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Do I need to pay my nanny or housekeeper minimum wage? What about overtime?

Domestic employees have been covered by the Fair Labor Standards Act (FLSA) since 1974.

The FLSA stipulates that domestics (household workers) must be paid at least the Federal minimum wage. The minimum hourly rate $5.85 (effective 7/24/07); rising to $6.55 per hour effective July 24, 2008; and to $7.25 per hour effective July 24, 2009. If your state imposes a minimum wage higher than the Federal minimum, the state amount is in effect.
 Minimum Wage by State

Overtime compensation coverage hinges on whether the household worker lives in (on the premise) or lives out (come-and-go). You are required to pay a domestic employee who lives out overtime (for hours above 40 in a week). Overtime is one and one-half times the normal hourly rate. Live-in employees must be paid for every hour they work but are not automatically entitled to the overtime differential. (There are some exceptions to the live-in exclusion, notably NY and MD.)

Hours worked include the following:

• All hours on duty, including meal time if the employee is required to remain at the premises during meals.
• Nap time
• Time when children are in school IF nanny is required to be "on call" for any emergencies such as early dismissal, child sick at school, etc.

In general, hours worked includes all time that the employee is required to be at the employer's home and all time that the employee is required to be 'on call' in the course of his/her duties.

There are many states which enforce higher minimum wages. Where Federal and state law have different minimum wage rates, the higher standard applies.
 Minimum Wage by State

These rules are governed by the  Fair Labor Standards Act. Please familiarize yourself with these rules if you are considering a pay rate that does not meet the FLSA standards articulated above.

IMPORTANT Elder Care Notice: in Coke v. Long Island Care (22-Jul-2004)the Federal Court of Appeals ruled that the FLSA regulations (29 C.F.R. § 552.109(a)) - which specifically apply to "companionship services" provided by other than family members of those receiving the services - are internally inconsistent and not owed the high level of deference usually granted federal regulations. The court found that "companionship services" exemption for home health-care providers should not apply to non-related employees because the intention of the regulation was to exempt companions, not individuals employed to assist with housekeeping and the daily activities of living. There had been several legislative attempts to expand the FSLA coverage applied to 'companions for the elderly and infirm' in the late '90's. Be advised that the professional accreditation of the eldercare worker will likely affect the FLSA exemption. When in doubt, and particularly when dealing with elder care workers with RN, LPN, and CNA licenses, we recommend that you follow the FLSA rules for domestic workers.

 Minimum Wage by State

For More Information contact HomeWork Solutions, Inc.
at 1-800-NaniTax or e-mail and submit a question.