In the nanny and household employment industry, “guaranteed hours” is a common term. Professional nannies and household staff often require guaranteed hours in their employment agreements with families. But what exactly does it mean to guarantee hours?
Are Guaranteed Hours and Salary the Same?
Guaranteeing hours means you’re ensuring a consistent weekly income for your employee, come rain, shine or summer vacation. It’s the set number of hours your employee will be paid per week, at their standard rate, regardless whether they work all the hours.
Guaranteeing hours is similar to paying a salary. However, because nannies and (most) household employees are considered non-exempt workers, they must be paid for each hour worked. If a nanny or household employee works more than 40 hours over seven days they are entitled to receive overtime pay at 1.5x their normal hourly rate. Guaranteed hours means your employee is paid for the agreed upon hours each week, at the agreed upon rate. They also receive additional pay for extra hours worked, beyond their guaranteed hours, unlike a flat salary.
How Do Guaranteed Hours Work In the Real World?
Guaranteed hours ensures your employee’s availability during their standard work times – in this example, 9 a.m. to 5 p.m. daily. Even if you don’t utilize all the hours each week, the nanny can count on consistent income.
Let’s break it down with an example. A family in Denver hires a full-time nanny to care for their children 9 a.m. to 5 p.m., Monday through Friday (40 hours). As part of their employment agreement, the family guarantees 40 hours of pay per week. This is the consistent weekly wage their nanny can count on each week. If the family doesn’t need their nanny for an 8-hour day (cue a spring ski day), the nanny should be paid for the guaranteed 40 hours. If grandma comes to town and the nanny isn’t needed for three days (24 hours) – no problem. The nanny should still be paid for 40 hours, even though they worked 16 hours.
What Guaranteed Hours Are Not:
Guaranteed hours refer to a set number of hours your nanny or household employee will be paid for each week, regardless of whether they actually work all the hours. However, guaranteed hours apply only if your employee is available to work during their standard work week. If the employee chooses not to work during agreed-upon hours, it’s considered time off. For example, if a nanny requests Thursday and Friday off (16 hours) for a bachelorette party but has used all their paid time off, technically these days would be unpaid. In this case, the nanny would only be paid for 24 hours for the week.
What is the Difference Between Guaranteed Hours and Banking Hours?
Guaranteeing hours is NOT the same as banking hours. Banking hours involves tracking unworked time during the agreed-upon hours. Then asking your employee to make up those hours on another day, without additional pay. For instance, if a nanny’s standard weekly schedule is Monday through Friday, 9 a.m. to 5 p.m., and the family takes a day off, asking the nanny to work on Saturday to make up those hours constitutes “banking hours.” This practice can strain the employer-employee relationship, undermine your employee’s financial stability, and may violate labor laws.
Why Should Household Employers Offer Guaranteed Hours?
Consistent, legal income is one of the most important benefits for nannies and household staff. Guaranteed hours provide financial stability for your employee and allows them to manage their budgets and expenses accordingly. Additionally, offering guaranteed hours helps attract and retain experienced, professional nannies and household staff. It also simplifies payroll management and reduces employee turnover due. Guaranteeing hours is worth every penny if it means you keep a valuable nanny or household employee.
If you have additional questions or would like to talk about this further, please contact the ABC Nannies team. We are always happy to help!
