Nanny Overtime Rules & Premium Pay Estimates

One of the most common mistakes household employers make is offering a flat salary that fails to account for overtime. Understanding how and when to apply overtime multipliers is crucial for legal compliance and fair compensation.

The 40-Hour Threshold

Under the federal Fair Labor Standards Act (FLSA), most nannies are considered non-exempt household employees. If a live-out nanny works more than 40 hours in a 7-day workweek, federal law mandates they receive overtime pay. This overtime is calculated at no less than 1.5 times their regular hourly rate (commonly known as "time and a half").

How to Calculate Overtime

To calculate weekly pay with overtime, separate the regular hours from the overtime hours:

• Base Pay: 40 hours × Regular Hourly Rate
• Overtime Rate: Regular Hourly Rate × 1.5
• Overtime Pay: Overtime Hours × Overtime Rate

Add the Base Pay and Overtime Pay together to determine the Gross Weekly Pay.

Banking Hours is Illegal

A common misconception is that families can "bank" hours—meaning if a nanny works 45 hours one week and 35 hours the next, they simply receive their flat rate for 80 hours over two weeks. According to federal law, each 7-day workweek stands alone. The 5 hours of overtime in the first week must be paid at the 1.5x premium, regardless of the schedule in the following week.