Do I pay overtime on vacation days?

May 31, 2019 4:20 AM

I have a household employee (nanny) and we pay her on the books. Her regular schedule is ten hours a day, five days a week, so, forty regular hours and ten overtime time and a half hours. She also has a number of vacation and sick days. When she chooses to use one of those, do we pay her for that day as though it is a typical ten hour day with overtime?

I can’t find anything on google about this. It seems like everyone else wants to know if you count vacation day hours when calculating whether someone gets overtime in a week. That is not my question. I want to know how many hours to pay my nanny for when she takes a vacation or sick day.

It seems really weird to pay overtime for time not worked. It also seems really weird for someone to make less money than usual when they take a sick or vacation day—her regular daily schedule has two overtime hours built in.

More details that may sway you: When she happens to stay an extra fifteen minutes, I pay her for that time. If she happens to need to leave an hour early one day, I put down 9 hours instead of ten on my spreadsheet. We have an employment agreement and it mentions vacation days and sick days, not vacation hours and sick hours, and I am postpartum and apparently newly non-detail-oriented so I didn’t address whether these days are general eight hour workdays or her typical ten hour workdays and whether they come with overtime included or not.

I’m not trying to get away with paying her less—I really want to know what the right answer is. Both ways seem strange to me. Maybe there is some middle ground I’m not thinking of. Or maybe one of the ways that seems weird to me is actually very normal and correct and if that is the case, please tell me so and I will do it.

posted by millipede to Work & Money (27 answers total)

The way we did this was to specify a certain minimum number of hours per week we would always offer her, which worked out to a certain number of hours per day. Any days off were paid as if she worked those minimum hours. But we usually didn't go much over those minimum guaranteed hours - usually only half an hour - so there was less difference than in your situation.
posted by peacheater at 4:23 AM on May 31, 2019 [2 favorites]

My normal office type job only pays ot for hours worked over 40.

If I take a vacation day AND I worked say 41 hours with 8 hours vacation pay I would get 1 hour ot (1.5 base pay). I would be paid for 48 hours base rate for a total of 49 hours for the week.
posted by AlexiaSky at 4:38 AM on May 31, 2019 [9 favorites]

Maybe ask her?
posted by lokta at 4:42 AM on May 31, 2019 [2 favorites]

What do you think is best for this employee? Is she a good employee that you'd like to retain?

The situation you describe, where she has to choose between losing two hours' pay and taking a vacation or sick day, seems like a bad position to put her in.

Maybe the way to think of it is not "overtime" so much as "usual hours worked/usual income", which is what is going to be important to her. Her usual hours are ten hours a day - that's what she budgets on. If she gets sick for a week and loses 10 overtime hours, that's a pretty substantial hit that could affect her ability to pay rent/loans/etc.

My feeling is that you have an opportunity to be an actively good employer, modeling the kind of relationship that we all should have, and therefore you should pay her usual rate for vacation and sick days.
posted by Frowner at 5:09 AM on May 31, 2019 [51 favorites]

My company's employee handbook clearly states vacation days for hourly employees are paid as 8 hours at base wage. Since you're paying her hourly for actual hours worked, this seems like a reasonable course of action for you. I'd sit down with her (or call or whatever) and say, "I realize I hadn't addressed this clearly, so going forward, I'd like to amend our work agreement to state 'vacation days will be counted as 8 hours at base pay rate'" (or whatever wording works for you).
posted by disconnect at 5:12 AM on May 31, 2019 [5 favorites]

The only thing you are bound by is that if she works more than 40 hours, you have to pay overtime. At my job, we can't take vacation/sick time that will put us over 40 hours. If we work 10 hours on Monday, take Tuesday off, and work 8 hours the rest of the week, we only take 6 hours of vacation time for Tuesday (saving those 2 hours for some other time). There is no such thing as "daily" overtime, it is only calculated on a weekly basis.

What happens to that hour she leaves early? Does she get paid for 49 hours that week? If I were you I would clarify your agreement like this:

1. Convert her Paid Time Off from days to hours
2. Confirm that her regular schedule is 50 hours a week
3. Pay any PTO between 40 and 50 hours at overtime rate
4. Only allow PTO to push schedule to 50 hours max
posted by Rock Steady at 5:15 AM on May 31, 2019 [4 favorites]

Examples:

Monday: 10 hours worked
Tuesday: 10 hours worked
Wednesday: 10 hours worked
Thursday: 11 hours worked
Friday: 0 hours worked

This puts her at 41 hours (so 1 hour of overtime). In this case, she can take 9 vacation hours for Friday that you will pay at overtime rate to bring her up to 50. This kind of sucks from your perspective, since you are paying overtime for hours she didn't actually work, but the trade off is below.

Monday: 14 hours worked
Tuesday: 14 hours worked
Wednesday: 11 hours worked
Thursday: 11 hours worked
Friday: 0 hours worked

This puts her at 50 hours for the week, so she would not take any PTO for Friday. This kind of sucks from her perspective, since she worked super hard that week, but doesn't see any extra money for it. It does mean that she has a day off without taking PTO, so she still has that PTO to use some other time.

You should also allow some sort of PTO rollover if you go this route, so that she doesn't lose those hours at the end of the year.
posted by Rock Steady at 5:24 AM on May 31, 2019 [1 favorite]

Best answer: Overtime is the amount of time a person works over normal working hours. Your nanny works a 50-hour work week consisting of five ten-hour days. Is the length of the work day specified in the employment agreement? Whether or not the employment agreement classifies 2 of those hours each day as "overtime" for purposes of compensation at time-and-a-half, the nanny's "regular work day" is 10 hours. It's not like hours 9 and 10 are voluntary and discretionary on the part of the employee. In view of the foregoing and in consideration of the fact that the employment agreement contemplates vacation/sick days (and not vacation/sick hours) -- and especially if the employment agreement calls for a 10-hour work day -- I think you have to pay for the full 10 hours for a vacation/sick day. You may not be legally required to do so, but in my mind you are ethically required to do so and it would be a good idea to do so if you want to keep your employee happy.
posted by slkinsey at 5:30 AM on May 31, 2019 [46 favorites]

Best answer: You may not be required to pay her overtime rate for those two hours, but assuming you are still in New York, the New York Domestic Worker's Bill of Rights requires you to pay her for a ten hour day on her sick and vacation days. See Question 6 at the FAQ here: "For each day of paid rest you must be paid at your regular rate of pay for the
average number of hours you work on a normal workday."
posted by MeadowlarkMaude at 5:36 AM on May 31, 2019 [20 favorites]

I think the rate of pay stipulated in the New York Domestic Worker's Bill of Rights is referring specifically to the rate for the 3 days of paid rest that domestic workers are legally entitled to each year. It doesn't specify the rate of pay for additional time off after those three days.
posted by Polychrome at 5:48 AM on May 31, 2019

Response by poster: A lot of these answers are helpful. But also, a lot of you guys are ignoring this: "I’m not trying to get away with paying her less—I really want to know what the right answer is."

That offends me. I'm REALLY not trying to pay her less. I just wanted to know what the right way to do this was! A lot of you are taking kind of a nasty tone and implying that I'm trying to rationalize screwing her over somehow. I like her and we pay her very well, on the books, which, by the way, is rare. My default was to pay the vacation day including overtime, but the more I thought about it, the weirder it seemed, so I asked. That's all. Sometimes it's nice not to assume the worst of someone.
posted by millipede at 6:40 AM on May 31, 2019 [22 favorites]

It's great that you are paying your nanny on the books. We did the same thing, and it's a hassle, but it's the right thing to do.

For vacation days, you should pay her the full 10 hours per day. I think that's clear.

I believe the question is whether to pay her time and a half for ten hours of a 50-hour vacation week, or whether you just pay her the regular hourly rate for all 50 hours. I don't believe there is a standard answer to this question. It would be addressed in the contract. Offhand, it seems counterintuitive to pay her overtime when she isn't actually working those hours. Overtime (and similar extra pay for working on holidays) is designed to compensate people for working in difficult or inconvenient circumstances, or working longer than is considered normal. Since she's not actually working, she's not experiencing that inconvenience and I wouldn't expect the overtime rate to apply.

On the other hand, it's possible that your Nanny thinks of it in terms of what her paycheck looks like each week. She may expect to get the same paycheck for a vacation week as she does on weeks when she's working. That would argue for paying her the time and a half for the 10 hours, so that her finances don't take a hit when she takes her vacation. Again, that's part of having a comfortable equitable employment agreement: vacation should feel like a regular week from an income standpoint.

Ultimately, though, I believe it's up to you.
posted by Winnie the Proust at 6:51 AM on May 31, 2019 [1 favorite]

For me, I don't think of this as "is millipede sneakily trying to pay them less" as much as "millipede wants a framework for their decision and I would argue that the framework should not be so much law (to which people naturally gravitate because it's clear and in front of everyone's noses) as ethics/building the world you want to see".

So I would say that it's like a question about minimum wage - if someone asked, "I am required to pay $10/hour for this task, but people in my area often pay $20, how do I know what rate to set", I would say that the law is a floor and not a ceiling, and that when you are in a position to set wages, your fundamental frame should be what is livable and decent for the worker, so maybe you should pay $20....or maybe you should pay $25 if that is the living wage in area, because paying a living wage is the right thing to do.

It's not so much "this person is sneakily asking a bad-faith question" as "the answer to the question changes depending on the framework that you use". A good person might make a very fair/honest decision within a legal framework that none the less would not be ideal because the law isn't the best framework.
posted by Frowner at 6:51 AM on May 31, 2019 [11 favorites]

Best answer: I think of a vacation or sick day as a substitute for a typical day. So you pay her the same amount you would pay her on a typical day. For your nanny, that includes overtime. Imagine if you had a more complicated schedule in which your nanny was scheduled for overtime hours on Mondays, Wednesdays, and Fridays, and no overtime hours on Tuesdays and Thursdays. If she was out sick one Tuesday and Wednesday, it would make sense to pay her for one day with overtime and one without, because you’re replicating the pay she would have received had she not been sick. Thinking about it this way makes it clear cut to me!
posted by sallybrown at 7:10 AM on May 31, 2019 [4 favorites]

the legal answer is you don't owe her overtime pay or even 10 hours for that day. People are having a hard time answering it because she has a set 50 hour work week for most weeks that she is expected to be at work, so paying her the standard 8 hour day for vacation is a cut in pay already even before you don't pay a couple of overtime hours for that day, so without prior set guidelines of how vacation will be paid, she will probably feel screwed over even though technically that is not your intention nor what is happening.

I think it is awesome you even offer her vacation days, but you might have to reword your policy to say something like you must work 40 hours per week to get overtime pay and paid time off is paid at ____ hours a day. that could be at your discreation how many hours a day you pay her.
posted by domino at 7:10 AM on May 31, 2019

As a reference point: in Australia we used to have a thing (not sure if it still exists in any form - yay neoliberalism) called 'Leave Loading'. This meant that an employee on leave would get paid 17.5% MORE (per pay period) when they were on leave than when they were actually working. This was to make up for the paid overtime that they couldn't do because they were on leave.

So, yeah, I reckon you should pay leave including the (regular, paid) overtime.
posted by pompomtom at 7:18 AM on May 31, 2019 [1 favorite]

If she was out sick one Tuesday and Wednesday, it would make sense to pay her for one day with overtime and one without, because you’re replicating the pay she would have received had she not been sick.

The thing is, this is not the "right" way to do it according to labor law. In the law, overtime is not working more than 8 hours in a day, it is working over 40 hours in a week. There is no concept of an "overtime day" in the law. Now, the "right" way to do it according to being a good employer (which it is perfectly clear to me that you already are, millipede) is really up to you and your employee to figure out. Personally, I find as an employee that having hours of PTO instead of days of PTO gives me much more flexibility in arranging my life, but that may not be the case in your employee's situation.
posted by Rock Steady at 7:33 AM on May 31, 2019 [3 favorites]

Rock Steady's point is true on a federal level, but some states absolutely do have daily overtime, including California (but not New York.) Just clarifying in case other people have similar questions.
posted by restless_nomad at 7:40 AM on May 31, 2019 [10 favorites]

> restless_nomad: Rock Steady's point is true on a federal level, but some states absolutely do have daily overtime, including California (but not New York.) Just clarifying in case other people have similar questions.

Indeed, very good point. My current state is... let's just say "hands off" when it comes to labor protections, so I don't usually think about state labor laws.
posted by Rock Steady at 7:45 AM on May 31, 2019

I know you marked this as resolved but thought I would add this.

In Corporate America if you worked four 10 hours days and took Friday as a vacation (assuming you were required to work 50 hours a week). You would be paid 40 hours at your normal rate and the addition vacation time for the Friday hours also at you normal rate.

In your case I also agree with Toad's comments.
posted by tman99 at 9:21 AM on May 31, 2019

You sound like an awesome employer (I’m a nanny too, I can relate!). I understand why you’d ask this question, as it is a murky situation. I would agree with others to err on the side of paying for the full 10 hours a day, since that’s what her typical workday consists of. In my experience, these details make such a difference! My employees are as wonderful as you sound, and that goes a long way.
posted by sucre at 12:16 PM on May 31, 2019

So we have a nanny who we pay on the books, who works both expected overtime (which we pay at 1.5X) and some unexpected overtime (which of course we also pay at 1.5X). When she takes vacation, we pay her the same amount as including her "expected" overtime. We don't pay her the additional unexpected overtime, even if she commonly works that unexpected overtime. Sounds like basically what slkinsey recommends above.
posted by ch1x0r at 3:46 PM on May 31, 2019

If she takes a "day" of vacation, she should get paid a "day" of work whatever that normally is.

Now, if it was "hours" of vacation, there might be an alternate reasonable way to figure it. You might have to decide whether your employee works 5 eight hour days with 2 hours of OT each day, or if she works 4 10s and then a 10 hour day all overtime, and it might matter which day she took off. But the way you pay her and the way you charge her leave would have to match. If she took off an 8 hour day plus 2 OT hours, you would only pay her for 8 hours, but also only charge her 8 hours of leave. On the 4-10 schedule, if she took off one of the 4 days, she would get 10 hours of pay and get charged 10 hours of leave, but the fifth day, she would get no pay and not be charged any leave.

I think that's not the intuitive way to do it, unless it was a clear agreement up front. Some people count on those OT hours, and counting only the straight time hours for pay and vacation would have the effect of taking away her OT money if she wanted to take vacation. That's the way it works for me, but I know it and have always known it and don't count on OT income to live.
posted by ctmf at 7:03 PM on May 31, 2019

would have the effect of taking away her OT money if she wanted to take vacation.

But not really take it away, since she would also save those hours of leave to use some other time and get paid for it. Still, her paycheck would be lower than it normally is for that pay period, which is usually what people care about.
posted by ctmf at 7:10 PM on May 31, 2019

Assuming you can afford it, I would err on the side of paying her the larger amount. So take the amount you pay her per week and divide that by 5 to calculate the amount to pay her for each sick or vacation day. Basically, make sure she ends up with the same steady weekly income.

You may not *have* to pay her that much, but this is the person taking care of your children and thus you don't want to give her any reason to resent you.
posted by Jacqueline at 10:53 PM on May 31, 2019

The part of this arrangement I find strange is that her "regular" schedule is 50 hours a week, things are obviously different in the USA but that would be illegal here in the UK (working time directive max=48 hours).

There is a lot of research pointing out that long hours are less productive, so if it were me I would much rather have two nannys working 20 or 30 hours/week.

With two nannies you wouldn't have to pay overtime rates, the nannies will have a better work-life balance and you have more options for holiday/sickness cover.
The wierdness about what to pay on sick/vacation days goes away - because the 10 hours will just be the standard hours for the day.
posted by Lanark at 8:22 AM on June 1, 2019

Response by poster: @ Lanark -- this is not a thing here. We could not pay two nannies a living wage. No one has two nannies. We live in New York and 50 hours is pretty standard.

I marked this resolved. We are paying her overtime for her days off. I am so glad this thread is over.
posted by millipede at 7:48 AM on June 3, 2019