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 (i.e. NY, MD, MA, MN, ME) have special overtime laws for live-in employees. Please call for details.

*Families who have a 40+ hour work schedule and want the convenience of a salary can choose to include overtime in the salary calculations. For example, The Johnsons hire a nanny to work 50 hours per week and they agree on a salary of $750 per week. Their employment agreement should read as follows:

“The employee will work 50 hours per week and be paid $750 per week. The compensation is comprised of 40 hours at the regular rate of $13.64/hr plus 10 hours at the overtime rate of $20.45/hr. If the employee works more than 50 hours in a workweek, she will be paid at the overtime rate of $20.45/hr.”

Note: We have an overtime calculator and are happy to help you with the math and the language to ensure that you are compliant and protected from any future wage disputes.

If you fail to pay the overtime rate for those hours, your employee is entitled to file a wage dispute against you – now or at any point in the future (there is no statute of limitations for overtime disputes).