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Nannies and the Fair Labor Standards Act.

courtesy Chamberlain and Kaufman, Attorneys at Law

The federal Fair Labor Standards Act (FLSA) governs minimum wages and overtime pay for most employees. In general, the FLSA requires that most employees receive at least the minimum wage for all "hours worked," plus overtime pay at time and one-half their regular rates of pay for all hours worked over 40 per week.

There are a variety of "exemptions" to these general rules, several of which may apply to individuals employed as "nannies."

Three of the more important of these are the exemption from overtime pay for "domestic service employees," the FLSA rules for determining whether "sleep time" and "meal time" are hours worked, and the rules governing wage credits for the reasonable costs of room and board.

Neither the statute itself, nor the regulations which implement it, uses the term "nanny." However, the regulations do define "governesses" and "babysitters employed on other than a casual basis" who work in private homes as "domestic service employees." These employees are entitled to the FLSA minimum wage guarantees but not the FLSA overtime guarantees. Thus, "live in" nannies must be paid at least minimum wage for each hour actually worked, but need not receive overtime pay no matter how many hours they work.
Editors Note: Overtime pay = time and one half (1.5 * hourly pay rate).

Nannies may be paid "on salary" rather than "by the hour," but if so the "salary" must be at least as much as would be required under the hourly rate(s) of the minimum wage laws. In other words, a "salary" must be translated into an hourly rate to determine whether wages comply with the FLSA. The arithmetic formula is to divide the total compensation received into the total number of hours worked, on a weekly basis. The quotient must be at least minimum wage.

"Hours worked" includes all the time actually spent "on duty" performing job activities. Normally, all hours spent on an employer's premises "count" as hours worked, as well as all time spent away from the employer's premises during which the employee is actually performing services. However, "down time" need not be considered working time if the employee is relieved from duty and the period is long enough so that s/he can use the time for personal purposes. A nanny's "day off" need not be included as working time even if s/he spends it at the employer's premises, provided that s/he is not really working.

The normal FLSA rule for an employee who resides on an employer's premises is that "sleep time" and "meal times" are hours worked. However, under certain, specific circumstances, the law permits sleep time and meal times to be excluded from hours worked.

Sleep time must generally be included as work time for any employee who is required to be on duty for less than 24 hours at a stretch. However, if an employee is required to be on duty for "shifts" of 24 hours or more, the employee and employer may "agree" to exclude bona fide sleeping periods of up to eight hours, provided adequate sleeping facilities are provided and the employee can usually enjoy "uninterrupted" sleep. The agreement requirement is satisfied if there is an "express" agreement about the subject, or if there is an "implied" agreement such as taking the job "knowing" that sleep time will be excluded from hours worked. Adequate sleeping facilities means a real bed with some privacy, and this element of the regulations is seldom a problem. An "uninterrupted" period of sleep means five hours during the eight hour period, which need not be consecutive. Only the "uninterrupted" portion of a sleeping period may be excluded. If the employee is "up" and working that time counts as hours worked, and if the employee cannot obtain at least five hours of sleep the entire eight hour period must be included as hours worked.

The meal period rules are similar but not identical. For shifts of 24 hours or less, bona fide meal periods need not be included as hours worked. For shifts of 24 hours or more, bona fide meal periods may be excluded from hours worked by "agreement." In either situation only "bona fide" meal periods may be excluded, which means when the employee is really relieved from duties during the meal period. Many nannies may eat with their employers, and if they are expected to continue their child care duties during meals the time must be included as work time.

The FLSA "hours worked" rules, including both the sleep time and meal time rules, are subject to a further regulatory "twist" which applies to employees who reside on the employer's premises. The regulations recognize that "live in" employees are not normally really "working" all the time they are on the employer's premises. The regulations also recognize the practical difficulties in distinguishing work time from "free time" under these circumstances. Therefore, the regulations provide that "any reasonable agreement" between the employee and employer about which hours will be work time and which will not will be acceptable, provided the agreement "takes into consideration all of the pertinent facts" (and is consistent with the "regular" FLSA rules governing hours worked). While employers and employees may not "agree" to treat working hours as nonworking hours, they may "agree" on a general formula for this to reflect the realities and variations inherent in a job, so long as it is "fair and square."

There is obviously room for argument about whether an "agreement" would comply with this regulation. However, the idea is that any such agreement should adequately and accurately distinguish time spent actually working from time spent "in normal private pursuits" such as "eating, sleeping, entertaining," and other periods when the employee is actually free from duties. One "rule of thumb" is that time need not be included as work time if the employee is free to leave the premises for private purposes.

The law permits the reasonable cost or fair value of meals, lodging or other facilities customarily furnished by the employer and which are primarily furnished for the benefit of the employee, to be considered as wages. Therefore, an employer of a live-in domestic service worker may credit the reasonable costs (or fair value) of room and board against wages owed. The amounts which may be credited in this way may be set by the U.S. Department of Labor. If the employer requires a live-in nanny due to travel, work schedule, etc., the room/board may be deemed primarily for the employer benefit, and not deductible.

The FLSA rules governing the employment of domestic service workers can be complicated and complex. While this article contains an overview of several of the pertinent requirements, it is informational only and not intended as legal advice. Both employers and employees may be well-advised to contact the nearest office of the U.S. Department of Labor for further clarification. Additionally, DOL publishes several "fact sheets" on the FLSA, which are available from DOL directly and through their web site. The DOL web site, as well as the pertinent statutes and regulations, are also "linked" from the "FLSA" web site maintained by Chamberlain and Kaufman. It is also possible that state labor laws contain additional regulations and requirements which may apply to nannies.

© 1998, Chamberlain and Kaufman

 Chamberlain and Kaufman, Attorneys at Law, 35 Fuller Road, Albany, New York 12205. Phone:(518) 435-9426, (518) 435-9102 (fax). You may contanct us via e-mail at chk@flsa.com.

 July 2006 FLSA updates

NannyNetwork.com Editors Note: In the US, a 'live in' nanny generally receives their 'room and board' in addition to their regular remuneration for their labors. It is virtually impossible to find a live in nanny in the US market who will work in conditions where the fair market value of the room and board is calculated and deducted from their pay rate. FLSA rules not withstanding, the labor market realities preclude this type of wage credit. In 2006, the average full time live in nanny received $500 per week for an average 45 - 50 hour work week, in addition to room and board and in most cases access to a family vehicle.

Note that the overtime differential (time and one half) benefit is extended to live-in nannies in Maryland (hours over 40) and New York (hours over 44).