Guaranteed Pay

What Does Guaranteed Pay for Nannies Mean?

I have to admit, as a new mother, I was pretty horrified to hear about having to pay a nanny even for the hours we didn’t use childcare services. It’s what’s know as guaranteed pay.

I begged the question: “So when we travel to my husband’s country and spend thousands of dollars on airfare, we will also have to dish out the same weekly check for childcare?”….“Yes”….“Even though we are not using the childcare?”….“Yup”… “Gulp”.

But of course, when I put myself in the shoes of a professional nanny whose livelihood depends on a steady paycheck, it makes complete sense. Just as you would continually pay for a daycare spot at a facility, you pay to hold your spot with your nanny. 

Guaranteed pay is something that a nanny employer and a nanny should discuss at the hiring table. And the agreement should be detailed out in your nanny contract. But if you are like so many and did not do this upfront, it’s not too late. Parents, I urge you to have the conversation now to prevent your nanny from shopping for a new employer who offers this stability.

So what does guaranteed pay mean?

The family (domestic employer) should be paying the number of hours per week they advertised the job position for.

Example:

Job position is for 40 hours per week. Family always pays at least 40 hours per week.

Hours are always paid regardless of:

-A parent coming home early

-Family going on vacation

-A parent staying home with the sick child

If this is starting to sound overwhelming to your budget, consider setting up a nanny share to help alleviate the cost.

Exceptions

Of course, a guaranteed rate position is not always what is being offered. But this should be discussed upfront and also outlined in the contract.

The family should let the nanny know that the hours of the position are not regular and leave it to the nanny to decide whether or not to accept the position.

Or some families will outline that their weekly childcare needs vary anywhere from 40-50 hours. But they will always guaranteed at least 40 hours per week to be paid out.

And yet another common example is when the employing family has one or both of the parents who are teachers. They would be forth coming with the nanny that they will only be guaranteeing hours during certain times of the year. Some nannies love having summers off. For some, it could be a deal breaker. To supplement lost income over the summer months, consider Nanny Sharing: An Innovative Option.

Another topic that goes hand and hand with “guaranteed hours” is “banking hours”. Parents, “banking hours” is a big no no. “Banking hours” usually goes down something like this….family typically uses nanny for 40 hours a week. But one week they only use the nanny for 30 hours. They go ahead and pay the nanny for all 40 hours that week. But then try to “bank” or float the extra 10 hours and use them in the future. Like the following month use the nanny for an extra 10 hour day but instead of paying the nanny for that time, use the “banked hours”.

This is not merely a suggested guideline but a rule outlined in Fair Labor Standards Act (FLSA). Nannies are considered non-exempt hourly employees. This means they must be paid for every hour they work within that pay period. So using “banked hours” would practice outside of these guidelines as the nanny would not be paid for hours worked within that time period. If you would like more information on industry standards, check out The International Nanny Association.

Guaranteed pay is not a standard governed by any law, but again, it is something that should be discussed and outlined in your contract to nurture your family/nanny relationship. For more this topic, see Hiring a Nanny: The Step-by-Step Guide or Via The Village for more guidance through our nanny contracts.