How overtime, paid time off, overnight shifts and traveling with caregivers can affect payroll.
According to the Department of Labor (DOL), families that hire a household employee must pay them hourly. But rarely does a caregiving job go exactly as planned, so it’s important to be familiar with a few common wage and hour laws so you don’t accidentally short-change your employee.
An Overtime Overview
Failure to pay overtime correctly is a very common mistake with very expensive consequences. Household employees are generally considered “non-exempt,” which means they are entitled to time-and-a-half for all hours over 40 in a 7-day workweek. This is true whether they are full-time or part-time and whether you pay on a salary or on an hourly basis.
Note: In most states, live-in employees do not have to be paid overtime. However, several states (CA, HI, MA, MD, ME, MN, NJ, NY and OR) have special overtime laws for live-in employees. Additionally, senior caregivers providing companionship services (fellowship activities, such as reading, games, crafts, conversation and watching TV) are exempt from overtime in most states.
Handling Overnight and 24 Hour Shifts
It’s very common for nannies to stay overnight at a family’s home from time to time. And senior caregivers often work 24 hours or more on a regular basis if the person they’re caring for requires round-the-clock care. Federal wage and hour law states that household employees do not have to be paid for up to 8 hours of sleeping time when they work 24 consecutive hours or more.
Note: Employers in California are unable to take this sleep time exemption.
It is important to note that this law can be applied if the care provider can actually sleep for this extended period of time. If you need overnight care and your caregiver is able to sleep up to 8 hours, this law eases the financial burden.
Traveling with Your Caregiver
Many families want or need to have help while on vacation. When traveling with an employee, federal law requires the employer to compensate the employee for all hours worked during the trip, including time spent traveling. The employee’s travel expenses, such as airfare, lodging, and meals, are not taxable income to the employee. They are expenses the family incurs to have their employee on-the-job when they travel.
Hours worked when traveling are treated no differently than when working in the family’s home. The employee must be paid for all hours they are on-the-job, and if the working time exceeds 40 hours in a 7-day period the family is required to pay overtime at a rate of 1.5 times the regular wage. While the family must pay their employee for working time, they are not required to pay for non-working time (i.e. free time completely on their own, sleeping time, etc.).
Because it’s vacation, there is often a question about what should be considered “working time.” The rule of thumb is fairly simple: if the employee is performing duties, it’s considered “working time” – even if the work is being performed in a beautiful beach, mountain or resort setting.
Sick Time & Vacation Time
Federal wage and hour law does not require families to provide paid time off to their employee for sick days or vacation days. However, many state and local laws do require some form of paid time off – and it’s an important benefit to offer in order to attract and retain a quality caregiver.
Ideally, any paid time off should be discussed in the interview process and detailed in an Employment Contract so all parties are on the same page from day one. Additionally, please check the paid time off and/or paid sick day requirements in your state or contact HomePay at (888) 273-3356 to make sure you’re in compliance.
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