A. Yes.  A properly drafted nanny contract will address overtime pay.  Whether you pay your nanny by the hour, day or week, federal regulations require you to comply with federal overtime requirements.

Federal requirements: Nannies fall under the protection of the Fair Labor Standards Act (FLSA).  Therefore, in most cases (unless exceptions apply), the FLSA  sets the floor for overtime requirements– i.e., the minimum pay a nanny must receive for overtime worked.  The FLSA requires you to pay your nanny overtime of at least one and one-half times an employee’s regular rate of pay after the completion of 40 hours of work in a workweek.  For more information please visit the DOL website— for introductory material please click here.

Please note that federal law exempts live-in nannies from overtime requirements.  In addition, federal law does not require overtime pay for work on weekends, nights, or holidays.

As an example, Nanny has an hourly wage of $10 per hour and works 50 hours from Monday through Sunday.  Nanny does not live with the family.  What is the minimum rate of Nanny’s overtime pay as required by the FLSA?  If Nanny receives the minimum rate of overtime pay, what are her wages for the week?  First, the minimum rate of overtime pay is $15 per hour ($10/hour x 1.5 = $15/hour).  Second, Nanny’s wages for the week are $550 ($10/hour x 40 hours = $400; $15/hour x 10 hours = $150; $400 + $150 = $550).

State requirements: as with minimum wage laws, some state impose overtime requirements above and beyond federal law.  However, overtime laws vary significantly from state to state.  Some states require overtime if more than a certain number of hours, such as 8 or 12, are worked in one day.  Other states exempt nannies from overtime requirements.

For more information on state overtime requirements please click here, or, if you continue to be puzzled about state and/or federal overtime obligations, please consult with a licensed accountant or attorney.