A Primer on Guaranteed Pay

Guaranteed pay, sometimes called guaranteed hours, can be a tricky topic for both nannies and the families that employ them. By the end of this short guide, you will understand what guaranteed pay is and why it is a standard benefit that many nannies receive.

What is guaranteed pay?

Guaranteed pay is dependable compensation for a nanny’s regularly scheduled hours. For example, a weekly schedule for 40 hours means a consistent paycheck for at least 40 hours. As a nanny, guaranteed pay means that the base amount in your paycheck doesn’t change from week to week, even if you work fewer hours than expected. So if your boss cancels your shift, you still receive pay. If the family you work for leaves town on vacation, you still receive pay. If the parents come home early to relieve you — yep, you guessed it — you still receive pay!

How is guaranteed pay different than other paid time off?

Personal time off (PTO), vacation, sick days, and holidays are all standard benefits in addition to guaranteed pay, but they are not the same as guaranteed pay. The use of PTO, vacation, and sick pay are at the nanny’s discretion. Guaranteed pay comes into play when the nanny is available to work but her employer does not need her due to circumstances outside of the nanny’s control.

What is the difference between guaranteed pay and guaranteed hours?

While the terms are often used interchangeably, guaranteed pay and guaranteed hours can mean different things. Guaranteed hours are a certain number of hours that a family agrees to provide for a nanny every week. Guaranteed pay, on the other hand, is the minimum amount that the nanny will receive every paycheck. Some families may offer guaranteed hours, but do not guarantee pay. For example, a family may say,

“We are offering X guaranteed hours per week.”

This may sound attractive during the interview, and you might assume it means you will always be paid for those hours. But look a little closer. What they may actually mean is,

“You will have the opportunity to work X hours per week when we need you.

Guaranteed pay is provided 52 weeks out of the year, no matter what. Always be sure to clarify that the agreement includes guaranteed pay!

What about jobs that offer “salary”? Is that the same?

No. Salary and guaranteed pay are not interchangeable terms. A “salary” offer from a family seems similar to guaranteed pay at first glance because it offers a set amount of money for a regular schedule. In a salary agreement, however, the nanny often ends up working additional hours yet receives the same set payment. This is not only unfair, it is illegal. Nannies always receive hourly pay. The IRS is VERY CLEAR on how nannies are to be paid and there is no exception to this! You can read more about the rules for household employees from the IRS.

This website does not endorse “under the table” payment (i.e. not reporting wages for taxation), but acknowledges that this payment method is a reality for many nannies. Please note that guaranteed pay is standard even when a nanny is paid under the table. 

Do part-time nannies typically receive guaranteed pay?

Yes. Just because a nanny works part-time does not mean her time is any less valuable. Additional benefits for a part-time position will vary, but guaranteed pay is the norm for all nannies.

As a nanny employer, why should I guarantee my nanny’s pay?

Guaranteed pay is fair. Your nanny reserves her time specifically for your family. She is regularly available for the times and dates that you’ve requested and therefore unable to accept other work elsewhere. Compensating your nanny in exchange for her availability is fair and right. It is a common practice for good reason! Imagine if your employer called you the morning before your shift to let you know you would have an unpaid day off. Imagine if they did that frequently. You would probably think about finding a new employer. Which brings us to the next point:

Guaranteed pay is smart. Guaranteed pay is a commonly offered as part of a nanny compensation package. Experienced nannies will likely have had guaranteed pay in the past and may only accept positions that include this benefit. Nannies with little or no experience may accept a position without guaranteed pay, but it is only a matter of time before they discover they are in the minority and seek a new position. Offering a standard compensation package will attract qualified candidates and help you retain the right nanny for your family. 

Guaranteed pay is kind. Beyond the working relationship, picture yourself in your nanny’s shoes. This is her livelihood. She still has bills to pay. Your choice to take a vacation or reduce her hours should not impact her regular paycheck.

Offering guaranteed pay is not only a considerate gesture to the person you’ve hired to care for your children, it is a fair practice and a smart way to attract and retain a great nanny.

I’m a nanny not receiving guaranteed pay. How do I fix this?

If you are not currently receiving guaranteed pay for your regularly scheduled hours as a nanny, you have a few options.

Option 1: Add guaranteed pay to your contract. (Download this free one!)

Explain that you’d like to update your contract to include guaranteed pay going forward. Keep in mind that amending an agreement after already accepting the terms is a more difficult negotiation path. If your boss says no and you truly love every other aspect of the position, consider Option 2.

Option 2: Ask for a minimum amount.

This is a less common arrangement, but if the family you currently work for isn’t willing to guarantee pay for all of your scheduled hours, request a minimum amount per week. Maybe you typically work 45 hours per week but ask for a minimum payment for 25 of those hours. Again, this is not a normal arrangement but if you otherwise love your position it can work in some unique situations.

Option 3 (Recommended): Find a new position.

If you aren’t currently receiving guaranteed pay for your nanny position, please realize that your situation is uncommon. Leaving your nanny job for one of the many families in Indianapolis that offer guaranteed pay as a standard benefit may be the right choice for you. In future interviews, be upfront about your needs and expectations. Make guaranteed pay one of your dealbreakers!

Guaranteed Pay in a Nutshell

Hopefully this guide has answered all of your questions about guaranteed pay! To summarize, this standard benefit is generally provided 52 weeks per year as a fair part of the compensation package for nannies. Guaranteed pay will also attract and retain experienced nannies who know their worth. Nannies in part-time or non-traditional positions are not an exception, and this standard practice offers reliability for both the family and the nanny they choose to employ.

If you have questions about becoming a nanny or hiring a nanny in indianapolis…reach out!