Question About OT and Taxes

Received Monday, November 23, 2009
Perspective and Opinion on ISYN I am in my first year as a nanny. Im 19 and not too familiar with the laws pertaining to overtime etc. I make $16 an hour, which employer is on the books with as to taxes etc. I work 47-50 hours a week. Another nanny told me they legally have to pay me overtime for over 40 and so far, they have not.

If employers are on the books and not doing the cash thing, isnt it a risk to not be paying overtime when legally required? What happens if they are found out not paying the OT? I dont know what to do and dont see how I can go now after 11 months and say I want OT. No contract, as I said its my first position and I didnt even know nannies did that when I started. Thanks for any insight.


CuriousDad said...

First the Website that is essential for the federal rules:

OP, what state are you in? While the Federal overtime laws always apply in the US. Which state you work in can change things, some are have additional and/or stricter requirements. Federal law says: if you work over 40 hours in a given payweek and you are hourly, you earn time and a half of normal pay for those hours worked over 40 in a PAY WEEK. The state your in my have stricter ruling then this. Also are you payed actually $16 dollars an hour? As in if you work only 10 hours that week you get paid $160 dollars before taxes, if you worked 50 hours you would have been paid $800 that week. Or on a set weekly pay scale, that might include overtime built in?
Yes it is a risk for them not to be paying overtime.

BUT! This is a big but, without a contract you have a much more diffucult row to hoe to prove you actually worked those hours and that you actually work for them. GOOD luck!

About the author said...

I would discuss a contract with your employer that include overtime that follows all of the labor laws of your state. You can negotiate PTO, sick time and a bonus into your contract, too.
Work it!

dadiswrongonthisone said...

Dad is right on this one. :)

CuriousDad said...

dadiswrongonthisone said

So are you going to change your moniker? LOL

dadiswrongonthisone said...

I just might! :)

nanny md said...

Not all professions are paid overtime. My husband is a doctor and works 80+ hour weeks. And we have no overtime pay. So running around with websites and upsetting your boss will get you fired. From my past nanny jobs, over 40 hours for full time is standard and billed at your hourly rate.

Don't let sensationalist influence you to talk your way out of what sounds like a good position.

CuriousDad said...

Nanny md
You know your comment brought up a thought.

OP are you getting paid under the table? Are the employers paying your taxes properly? If so you might want to check how much they are claiming you are working. If they are not paying any taxes on you and not taking out any taxes from your paycheck and you are not claiming any income. Then you are working under the table. Which is a completely different ball of wax.

If not then no law covers you really. Except the ones that say your suppose to be paying taxes, and the ones that say the employers are suppose to be paying taxes and withholding taxes for you. If the IRS catches you and your employer, you both get to pay the penalties. After that, then you can go after your employers for lost overtime. But if you do not ahve a contract.....

Now if you like what you are getting paid, working under the table and are willing to continue at that pay rate. That’s your choice.

I will point out that at $16 dollars an hour for a 40 hour week, that is an income of $30,000 to $33,280 depending on if you get paid or unpaid time off and how much of it you get. All under the table.

If you are working a 50 hour week and all taxes are being taken out. Then you will be earning about $45,000 a year, Your taxes: -$12,300 Federal withholding;
-$2,800 Social security;
-$650 Medicare. Note these are approximate numbers not exact, but should be reasonably close.

Which means you should be earning about $29,250 a year net or about $562.5 dollars a week, instead of $800 for a 50 hour week. This of course does not include any local or state taxes that apply to your income earned.

The catch being, you build up no Social Security, no Unemployment Insurance and are liable not only for the taxes you owe, but any penalties the IRS assess if you get caught. You also have little to no protection in case the employers get ugly with your pay.

lynn said...

most nannies I know agree on a set number of hours a week for a set pay...of course you can break that down into an "hourly" rate but that doesn't mean you are an hourly employee. This is especially true if your employer pays you your full weekly salary regardless of whether you actually worked the whole week (like if I, as an employer, decide to up an take a week's vacation, my nanny still receives her pay that week even though she didn't work. You need to straighten out with your employer whether you are an hourly employee or a salaried employee. There are benefits to both. For example, if you are hourly, if your boss comes home early 2 hours from work and says "you can leave now" then you don't get paid for those two hours you would have worked. If you are salaried, you still would get paid. So you need to think about this.....because most families who budget for nannies do so at a set hourly rate to figure out a salary and don't 'budget' for time and a half beyond 40 hours...mostly because if both parents work the nanny has to work 50 hours already to allow parents to commute to and from their 40 hour a week job.

Yes, that Cristi said...

domestic employees are not entitled to overtime, its just businesses and even then if you are salaried you dont get overtime.. someone is trying to get you fired.. or is stupid.. Dont get greedy, sounds like you have a great job... if you really need more money negotiate for a pay increase when your contract expires.. 5-10% is usual...

CuriousDad said...

Found something new for me, those who claim nannies can get a salary without being paid overtime are partially right.

The following is an excerpt form the Department of Labor website:

"The following are examples of employees exempt from the overtime pay requirements only:

Domestic service workers who reside in their employers' residences "

This is the only time that the overtime laws are exempted for Nannies as they are defined as domestic service workers. If the are not live in, they are not exempted from overtime laws. Note they are ONLY exempted from the overtime laws not the minimum wage laws, unlike most actual salaried exemptions.

Now Casual babysitters and persons employed as companions to the elderly or infirm are exempt from both Overtime and minimum wage laws. So those who go on Craig’s list and yell at people looking for a baby sitter at $5 an hour. They are legally in the right.

CuriousDad said...

dadiswrongonthisone said...
So guess your wrong about me being right ;) Does that means your new moniker should be dadiswrongonthisoneIthoughthewasrightbuthewasactuallypartiallywrong?

So I am wrong about overtime if the Nanny is a live in.

Next time I see someone post a "Well I do not get paid over time, should I ask for it?" post I know better. Took me long enough to find it, I kept looking for nannies and/or caregivers on the DOL site. Not household employees, mea culpa.

Village said...

I don't think some are carefully reading her post. She said she in on the books and has no contract.

OP, I wouldn't rock this boat. $16 an hour on the books is great in this economy. They are going to balk at overtime, in my opinion. They are not going to want to pay more for some hours than others.

You are in a great position. The nanny who is telling you this stuff may want your job, because it's better than hers. You should be grateful and do a good job. You seen to have gotten very lucky with your first job and just don't realize what a good situation you have.

dadiswrongonthisone said...

I really hope OP is claiming what she makes. I really hate it when people do not.

Lghost said...

Google Breedlove. We used them when I had a nanny in NYC who we paid on the books. They handled everything and know all the details as they pertain to each state. They have a nanny tax calculator on their website which may be helpful. You really should make sure that your employer is withholding the proper amount of taxes and that your paychecks are accurate.

For whatever it's worth, our nanny never worked overtime. However, on the few occasions that she babysat after hours, we paid her time and 1/2 in cash which was what she preferred.

just another mommy said...

I don't know if this is a state thing or what, but in my state, an employer does not have to pay overtime if he/she has only a few certain # of employees. I don't know where the cut-off is, but I know that my sister works at a very small company and therefore, her employer does not pay overtime.

nyc mom said...

Yes, technically you should be paid overtime above 40hrs. However, very few full-time nanny positions are structured as hourly pay. It is a weekly salary based on (commonly) 50 hrs a week. If you break it down by hour, you can easily account for the hours and pay of an $800 salaried, 50hr workweek (example)

40*$14.50 = $580
10*21.75= $217.50
Totoal = $797.50

I agree with what has been said already. This seems like a very well-paying position, especially on-the-books. I would not rock the boat if you are happy overall. I would use your one year anniversary as an opportunity to ask for a contract and have all the details of your employment put in writing.

Village said...

I hope OP lets us know how this turns out.

Unknown said...


I worked in a situation where I earned a flat rate of $14/hr, but that was broken down to 40 hours at the $11 something price and 10 hours at the $17 something price. Then if I worked an hour later or did an evening or weekend I was payed the $17 above my normal weekly salary. Does that make sense?

I think you need to sit down and find out what your employers are thinking about your rate and how they are handling the OT rate.

ChiNanny said...

CuriousDad said...
"So those who go on Craig’s list and yell at people looking for a baby sitter at $5 an hour. They are legally in the right."

They are yelled at because they want to pay the person caring for their child less than the person who makes their hamburger at McDonalds, not because they legally can't do it. People find that ridiculous.

OP - I think you need to figure out whether you are hourly or salary. If you are truly paid hourly, are you paid less if they come home early? Chances are your employers consider you salary and therefore are not paying you overtime.

MissMannah said...

I don't know the legalities of it all, but I consider it a personal decision between the nanny and the family whether to do overtime pay or not.

I get $350 gross weekly for up to 35 hours, which is what I am regularly scheduled for. Anything over 35, I get an additional $10 an hour. So I'm not getting overtime pay, but I don't mind. For instance, this week I'll only work a total of 6 hours but will still get my $350. So I think it would ultimately be greedy of me to ask for $15 for any hours over 40. (In my city, $10 is good for a nanny job with only one child.)

Didn't you say you're coming up on your first year? I think you definitely should sit down with the parents and write up a contract. You can bring up the overtime issue if you want, but I think they might be resistant.

one of the bunch said...

As others have indicated, I would let it rest with the overtime, since you're already making a good "hourly" rate, and since you might actually be salaried.

I would use your one-year mark to negotiate a contract and ask for some other benefits.

BritishNanny said...

"I don't know the legalities of it all, but I consider it a personal decision between the nanny and the family whether to do overtime pay or not"

I agree with MissMannah on this one. I get $1250 gross a week on the book (which automatically goes into my bank account)for up to 50 hours work and anything over that (including babysitting) just gets paid at $25 an hour (and I've done over 300 hours overtime so far this year, not including overnights!!!) rather than at time and a half. That's how we've put it down in the contract. My employers also pay $1500 net a month directly towards my rent so I can't really complain about anything.

I found this on

"In the United States, hours worked in excess of 40 per week, typically, must be compensated at time and a half. The Federal Fair Labor Standards Act applies this rule to domestics who do not reside with the employer ("live out" or "come and go"). Domestics who live in with the employer must be compensated for every hour of work, but the time and a half rule does not apply. (Note: in some states, the overtime requirement for time and a half applies to live-in nannies as well); however, your nanny may interpret overtime to mean hours worked in excess of those originally agreed upon (regardless of whether those "originally agreed upon" hours were 20 per week or 50 per week. It is a good policy to clarify what is meant by this term from the very beginning, especially since occasional overtime needs is often one of the reasons a family has arranged for a nanny."

So, I think some nannies (like me) are happy to consider overtime as anything above what they are contracted to work (in my case 50 hours) not necessarily 40 hours and are happy to receive their hourly wage. Op, do you get compensated for every hour you work? They do pay for hours worked over the 40 mark, right? If so, I would just leave it as it is but you definitely need to sort out a contract and as others have said, your one year anniversary would be an ideal time for that.

Andrea said...

Tell them you'd really like to follow the law. You'd like to be paid overtime, as the law says and you would like to pay your taxes according to the law as well. They should appreciate your honesty and willingness to comply with the IRS as well as them. By saying that you're saying their butts too.

Manhattan Nanny said...

I have the same arrangement as BritishNanny, and I agree that it is an arrangement that has to be made by the nanny and employer, depending on their circumstances.
Keeping in mind that the reason for time and 1/2 for extra hours is because they are harder to get through, you are exhausted. If a nanny is getting a high salary, and her hourly rate is $20-25 an hour, that seems fair for extra hours. If however, she is working 50 hours a week, and her hourly rate is only $12, she is probably not going to be happy working extra hours for that.

nanny with opinion said...

I am salaried with overtime. I work 45 hours a week and anything OUTSIDE Of my 45 hours I get paid OT. Since I always work 45 hours a week no matter what (unless there is a holiday) and my OT is fairly rare that is what my bosses an I have decided works best for all of us.

I think its up to each individual family & nanny.

I know a lot of nannies in my area are salaried with OT after they work their "set" hours each week.

Alex Quinn 82 said...

In an economy where companies are cutting back costs and labor, it is very important for you to understand and know your rights on overtime pay laws , wages, and labor laws. Many companies do not follow state guidelines and are not paying their workers the pay that they are required to receive. Some of them do not even realize that they are doing this which is why it is important for you to know your rights. Do not panic if you feel as if you have been wrongfully paid though, there are firms out there that are willing to listen and help you get what you deserve.