Families often ask us: “Can we just pay our nanny a weekly rate?”
And our answer is “Yes, a weekly rate is completely legal so long as it’s supported by a clear breakdown of hourly and overtime pay in the nanny’s employment agreement.”
While household employees like nannies must be paid hourly under the Fair Labor Standards Act (FLSA), offering a consistent weekly (or bi-weekly) paycheck is not only allowed, it’s common practice. In this post, we’ll walk you through exactly how to structure weekly pay in a compliant, easy-to-understand way that protects your family and ensures your nanny is compensated legally and fairly.
Legally Structuring Weekly Pay for Colorado Nannies
In Colorado, it’s entirely legal for a family to present a weekly rate when looking to hire a nanny, and make an offer of employment to a nanny quoting a weekly rate. In fact, many nannies and families often agree on a weekly rate for simplicity’s sake.
However, to comply with federal and state labor laws it’s imperative that the weekly rate is backed by a clear hourly and overtime rate in the nanny’s employment agreement. To ensure compliance, the weekly pay should be broken down into regular and overtime hourly rates. This breakdown should be clearly documented in the employment agreement.
Weekly Rate Example:
- Total Weekly Pay: $1,485 for 45 hours/week
- Regular Hours: 40 hours
- Overtime Hours: 5 hours
Regular Hourly Rate: $1,485 ÷ (40 + (5 × 1.5)) = $1,485 ÷ 47.5 = $31.26/hour - Overtime Rate: $31.26 × 1.5 = $46.89/hour (any additional hours over 40 per week must be paid at this rate)
In this example, the nanny’s compensation includes 40 hours at the regular hourly rate of $31.26 and 5 hours at the overtime rate of $46.89, totaling $1,485 for the week. This breakdown ensures that the nanny is compensated fairly for both regular and overtime hours, and the family has the ability to budget based on the nanny’s weekly pay. For example, a family my use language similar to the sample below in their contract with their new nanny outlining how weekly rate will be structured:
“The Employee will be compensated at a total weekly rate of $1,485.00 for a regular schedule of 45 hours per week, consisting of 40 regular hours and 5 overtime hours. The regular hourly rate is $31.26, and the overtime rate is $46.89 per hour (1.5x the regular rate). Any hours worked beyond 40 in a workweek will be paid at the overtime rate.”
This method of structuring pay this way is not only legal but also recommended by payroll experts. The leader in nanny and household payroll, HomeWork Solutions, emphasizes that by clearly outlining the regular and overtime rates in the nanny’s employment agreement, families can provide their new employee with consistent pay while ensuring compliance with labor laws.
Guaranteed Hours vs. Salary
Offering “guaranteed hours” is a common practice that provides nannies with income stability while ensuring compliance with labor laws. Unlike a salary, which pays a fixed amount regardless of hours worked, guaranteed hours involve paying the nanny for a set number of hours each week, with overtime pay for any additional hours.
Guaranteed Hours Example:
- Guaranteed Weekly Hours: 45 hours
- Regular Hourly Rate: $25/hours
- Overtime Rate: $37.50/hour (1.5 × $25)
- Weekly Pay: (40 × $25) + (5 × $37.50) = $1,187.50/week
This structure ensures that the nanny is compensated for all hours worked, including overtime, and provides clarity in the employment agreement.
Importance of a Detailed Employment Agreement
To ensure compliance and avoid misunderstandings, it’s vital to have a written employment agreement that outlines:
- Regular and overtime hourly rates
- Guaranteed weekly hours
- These hours should correlate with your schedule – if you need care Monday through Friday 8 a.m. to 5 p.m., you should guarantee 45 hours per week.
- Payment schedule – weekly or bi-weekly is standard – with no more than 10 day lag period, per Colorado law
- Procedures for additional hours worked including overnights, travel, and additional overtime hours
- Benefits provided
Paying your nanny legally and fairly not only ensures compliance with labor laws but also fosters trust and a positive working relationship. For assistance in setting up compliant payroll and agreement language, consider consulting with payroll service providers like HomeWork Solutions and GTM Payroll Services.
Discover the ABC Nannies difference. With over 30 years of proven success, ABC connects exceptional nannies and household staff with local families who value professionalism, reliability and top-notch care.
- If you found this article useful, you might also enjoy these helpful articles: ‘How Much Does a Nanny Cost in Colorado?‘ and Nanny Benefits: What to Offer
- If you’re a family looking to hire a nanny, we’d love to help. Complete our Family Application here.
- If you’re a candidate looking for your next position, apply here.
