Thanks all, very helpful!

The way is works is you ask her if she'll be available and if she is then you pay her regular rate for up to 40 hrs per week and OT beyond that. But you have no guarantee that she will be free as you are no longer reserving her time for those hours.

Option A: pay for part-time hours and have multiple layers of backup plans (grandma, other sitters, SAH parent down the street) for sick kid, snow delays/cancellations, teacher work days, random holidays, half days, etc.

Option B: pay for part-time hours and plan to take time off when nanny is not free

Option C: pay for some hours DC is in school (e.g., all day on Mondays and Fridays, which are the most common for scheduled days off and afternoons-only Tues-Thurs), and plan to take off if nanny is not free during Tues-Thurs

Option D: pay for full-time hours (usually people would look for something else nanny can do during that time such as groceries, cooking, family laundry, dog-walking, depending on what nanny is willing to take on) and know that you have coverage unless nanny is ill.

If you want her to guarantee availability, you pay for the hours you've reserved. If you only want to pay part time hours, that's fine, but understand that you do not have guaranteed coverage for those closures. Your post talks only of your needs, but it's not just about you. You reduced her hours and she will need to replace the income. If she happens to be available to work, you pay her for the additional hours up to 40 hours and OT for any beyond. If you go forward paying part time hours but expecting full time availability, plan to lose your "wonderful nanny."

I would simply tell her that there will be specific days where she would be needed for full days & ask her if that will be feasible for her later on.

You will give proper notice of course.

But let her know that if she cannot be that flexible in her work day then you would understand.
(Like if she picked up another part-time job or booked some extra babysitting hours.)

Or if you want her to have open availability, it would only be fair to her to compensate her on a stand-by basis.

You are asking two questions here:

1) What to pay for additional hours. Answer: if under 40 hours a week, no overtime is required. If you want to pay her extra just because she's available, go for it.

2) Having her available for all of those 1/2 days, closures, etc.. Answer: This is trickier. Unless you are going to pay her enough that she doesn't need/want to find other work, and she is willing to guarantee that she won't fill that time with other pursuits (school, volunteering, gym, travel, sleeping in), I don't know how you will know that she will always be willing to pick up those hours. I suspect that even if she says she is, once the transition to part time has been in place for a few months, she will become less available.

We have had a wonderful nanny for many years and we are now switching her to part-time since our DD will be in school until 3:00 p.m. five days a week. We are offering her competitive rates and she does other work so she wants to stay. However, we will need her for those 1/2 days, school closures, and minor illness days. Do we just offer standard OT for those hours? TIA!