Household – Domestic Staffing Salary? Guaranteed Hours? What does it all mean?
Most people are pretty familiar with the definition of the word salary. It is a fixed compensation amount periodically paid to a person for regular work or services (Dictionary.com). Most people are unaware that salary is not an acceptable form of compensation for household staff according to the Dept. of Labor. So this creates an interesting dilemma for lots of families that are just not sure how to approach compensation for their nanny our household staff member and are unaware of the options.
Guaranteed Hours – Guaranteed hours are a minimum set number of hours that a family and a nanny agree she will work each week. The family commits to paying the nanny’s hourly rate for the guaranteed minimum number of hours. A nanny can work more than the guaranteed amount or she can work less but a family guarantees to pay her for at least the minimum if she does work less. If she works more, the family will still have to pay her normal hourly rate plus any applicable overtime.
The Risk – A lot of families are uncomfortable with the idea of committing to pay someone for time that they are not working.
The Benefits – A nanny knows she can expect a consistent paycheck of a certain minimum each pay period (weekly or bi-weekly). While she may not have control over a family taking a vacation or changing their schedule every once in a while and not needing her services for a day or two, she can know that she will be paid a base amount. The stark reality of the household staffing industry is that you have to pay for the option of having your nanny available to you. When you go out of town, have the nanny water plants, check on the animals, stock the fridge, or even work on projects around the house such as cleaning out closets, organizing playrooms, etc. Your life will run smoothly when you return home and you will still have a nanny.
Salary – a fixed amount paid each pay period.
The Risk – Salaries are actually not permitted for household staffing per the Department of Labor. A salary can be backed into but there will still be overtime pay (normal rates apply), overnight rates, etc.
This is a very brief overview and explanation of guaranteed hours vs. salary. For further questions please call our Client Coordinator, Maribeth. She can help you figure out what is best for your family.