It is that time of year again and we have had many questions regarding holiday pay. Our friends over at HomeWork Solutions Inc. has the official answers for you!
Paid Holidays, Overtime and Bonuses, Oh My!
By Mary Crowe, HomeWork Solutions Inc. (www.4nannytaxes.com)
We are approaching a busy two month holiday season, and many nanny employers are facing nanny payroll decisions that they never thought about before.
Household employers are not legally obligated to pay for ANY holidays or time off. Many nannies worry about their income during the busy holiday season. Will they receive pay on holidays? Will they be paid for those regular days when they are not needed due to holiday travel or entertainment? All too often when a family hires the nanny they both neglect to consider these questions up front.
Full time household employees typically receive a minimum of 7-8 paid Federal holidays per year. If you have not done so already, now is a good time to get these details down in writing so everyone stays on the same page all year round. Additionally, full time household workers are typically paid for their regularly scheduled time every week, even if the family decides to take additional holiday time and she is not needed.
California household employees are hourly employees and are eligible for overtime per the regulations of the California Domestic Workers Bill of Rights. When a paid holiday falls in the same week when overtime was worked, families sometimes struggle on how to calculate the correct pay. A paid holiday does not count towards weekly hours worked for overtime calculations; however daily or weekly overtime pay requirements may still exist. HomeWork Solutions can assist you with your payroll questions and the correct pay amount when there is a situation with a holiday and overtime in the same pay period.
Holiday or Year End Bonus
Holiday or Year End bonuses are OPTIONAL – and are reportedly paid by about half of our clients. So, where as your nanny might appreciate a bonus, unless it has been your practice to give one in the past she is not likely to expect it. Bonus amounts are typically equal to one, sometimes two weeks of pay. Another thought is to give one day of pay for every month of employment, up to a week. So the nanny who started in October might get 3 days pay as her bonus. Bonuses are of course part of the nanny’s taxable income.
Whether your family provides your nanny a year end bonus or not, we encourage you to personally express your appreciation to your nanny during this festive season with a card, a small hand-made gift from your child, flowers, or any other type of “Thank You.”