A.  Some differences arise when addressing holiday and vacation issues, so they will be addressed one at a time.  As an initial matter, be sure your nanny contract addresses holiday and vacation issues.

Holiday: The Fair Labor Standards Act (FLSA) does NOT require you to pay your nanny for time not worked.  Consequently, parents are legally required to give their nanny either paid or unpaid time off for holidays.  Note that even if you choose not to pay your nanny for time off on holidays, your nanny contract should still address the issue.

Vacation: As with holidays, parents are not legally required to give their nanny either paid or unpaid time off for vacation.  Nevertheless, as with holidays, many parents do so to increase their nanny’s job satisfaction.

Unlike holidays, however, many states have laws regarding paid vacation. California, for example, treats paid vacation as a form of wages.  Under California law, paid vacation “vests” – meaning it is earned – as work is performed.

Importantly, in states where paid vacation is treated like wages, earned vacation cannot be forfeited or taken away.  Thus, when an employee quits or is terminated, he/she must be paid all earned and unused vacation.  Those states, however, do allow a reasonable cap to be placed on vacation benefits.  Other stats have a “use it or lose it” policy with respect to paid vacation.  In those states, an employee forfeits his/her paid vacation if the employer’s requirements aren’t followed.

A complete nanny contract will address: (1) which holidays your nanny will not work and whether he/she will be paid for those days; and (2) how many vacation days will be granted to you nanny during the course of the year and whether your nanny will be paid for those days.

For more information about federal regulations, please click here.  For information about your state’s laws please visit your state’s labor website, or, if you continue to struggle, please consult a licensed accountant or attorney.