The simple answer is no. But let’s take a big picture look at the issue and hopefully it will all make sense in the end.
What Exactly Does “Banking Hours” Mean?
Before I jump into the definition of banking hours, let me first define guaranteed hours since it’s directly related to this conversation.
Guaranteed hours is a standard benefit in the nanny industry and says that if a nanny is available to work and the family chooses not to use her services for any reason, the family will pay the nanny her normal wage for a guaranteed number of hours during that work week. The number of guaranteed hours is generally equal to the nanny’s typical weekly schedule (e.g. if the nanny normally works 47 hours per week, she’ll receive 47 guaranteed hours per week). For a deep dive into guaranteed hours, check out my article Should You Offer Guaranteed Hours To Your Nanny?
EXAMPLE: The Bird family employees a nanny that works from 8:00 AM to 5:30 PM Monday through Friday. They provide her with 47.5 guaranteed hours per week. One week they decide to take a long weekend away to visit Grandma. The parents and kids pack up and leave on Wednesday evening and return on Sunday afternoon. The nanny receives Thursday and Friday off however she’s paid for those days as if she were working her normal schedule because of her guaranteed hours benefit.
So back to our question of “What is banking hours?” Banking hours is when a nanny employer requires the nanny to make up the unworked hours she was paid for under the guaranteed hours benefit. Let’s revisit the example above. If the Birds were banking hours, they would have 19 hours in the bank because they paid their nanny for 2 days she didn’t work. This allows them to use those extras hours as needed. So they have the nanny stay late the next Wednesday and use 2 hours. They go on a date Saturday evening and use 5 hours. They ask her to pitch in on a Sunday afternoon when the kids are all going in different directions and use 3 hours. They use an extra hour here and there until the nanny has repaid all 19 hours. Since the nanny was paid for those hours already, she works the 19 extra hours without compensation.
Effect On The Employment Relationship
Employers like banking hours for obvious reasons. However banking hours feels unfair and disrespectful to nannies and even when they agree to do it, it almost always takes a negative toll on the nanny / parent relationship. It really comes down to choice. From the nanny’s perspective, she was ready, willing, and able to work her normal schedule and the family chose not to use her. She feels the cost of that choice, the payment of guaranteed hours, should fall on the family. Having her work extra hours without pay on top of her normal schedule feels like she’s being penalized for the family’s decision.
Banking hours saves employers money, however there is still a high cost. A nanny who feels she’s not being treated fairly quickly moves into a “keeping score” mindset which chips away at the give and take that’s essential to the long-term success of this unique relationship.
Oh Yeah, It’s Also Illegal
If you hop on any facebook nanny or nanny / parent group and ask about banking hours, you’ll get several “IT’S ILLEGAL!!” responses. Then there will be a chorus of “Where does it say that? comments.
I can’t link you to a Department of Labor page that says banking hours with your nanny is illegal. That official page doesn’t exist. However the Fair Labor Standards Act states what employers MUST do – “Covered employees must be paid for all hours worked in a workweek” – so by extension NOT paying your nanny for banked hours worked during the workweek is illegal. The Department of Labor doesn’t care if you provide her with guaranteed hours, if you feel you’ve already paid for those banked hours, or even if your nanny agreed to accept banked hours. She must be paid for ALL hours worked in any workweek or you’re open to a wage claim for unpaid wages.
Remember the Bird family from above? They went to Grandma’s for a long weekend and banked 19 hours. The next week the nanny stayed 2 hours late on Wednesday and they didn’t pay her for those 2 hours. Instead they deducted them from the 19 hours owed. Not paying her for those 2 hours is in violation of the FLSA.
If My Nanny Is Paid Every Two Weeks, Can I Bank Hours From Week To Week As Long As I Use Them Within Those Two Weeks?
No, The FLSA says your nanny must be paid for every hour she works in a workweek. They define a workweek as 7 consecutive 24-hour periods. How often she’s paid doesn’t matter. The 7 day workweek is designed to keep employers from shifting hours around to avoid paying overtime.
So you can legally move hours around within her 7 day workweek, for example letting her go 2 hours early on Tuesday then having her to stay 2 hours later on Thursday, because at the end of the workweek she’ll be paid for her total hours worked. It doesn’t matter if she worked less on Tuesday and more on Thursday. (Although her contract may place restrictions on schedule changes.) But you cannot carry hours forward to another workweek.
So I Just Have To Pay My Nanny For Hours She Doesn’t Work?
Guaranteed hours aren’t a legal requirement. You’re not legally obligated to pay your nanny for the hours she’s available but you don’t need her to work. However it’s a standard benefit in the industry so if you choose not to offer guaranteed hours, chances are you won’t attract quality candidates or you won’t keep a nanny long-term. I’m a big believer that mindset matters so I encourage you to think of guaranteed hours as reserving your nanny’s availability. You may not need her for all her scheduled hours every week, but she’ll be there ready, willing, and able to provide great care when you do need her.