Do You Have to Provide Workers' Comp for Your Nanny?
Many people fail to realize that hiring a nanny means you are considered a household employer.
People think that nannies can be paid cash under the table or just treated like a babysitter. However, many requirements need to be followed when bringing a nanny into your home. Workers’ compensation insurance is generally required for office jobs, retail, and restaurants, as examples, but do you need workers’ comp insurance for your new nanny?
What is Workers’ Compensation Insurance?
According to The Hartford, “workers’ compensation insurances helps protect businesses and their employees from financial loss when an employee is hurt on the job or gets sick from a work-related cause.” For a brick and mortar business, employers are covered if an employee slips, trips, or falls on the job, along with other accidents. A workers’ compensation policy will typically cover the injured employee's medical bills along with any missed wages depending on the type of injury they have. In the example with your nanny, your nanny could easily trip while leaving the house with your kids, get a dog bite while watching your pup, or even be injured in a car accident while out running errands.
Workers’ Compensation Insurance vs. Homeowners Insurance
Because a nanny is employed at your home, you may be wondering if homeowners insurance can take the place of workers’ compensation. Typically homeowners insurance will protect you from any damage or loss to your home, including natural disasters and theft, but it also covers you if somebody is injured at your home. However, while it protects from injuries, it usually applies to people who are visiting your home, or if you have a contractor or plumber over. Because a nanny is your employee, homeowners insurance won’t fully cover any injuries they experience when working at your home.
State Requirements for Workers’ Compensation
As with many things related to payroll and taxes, workers’ compensation insurance requirements are going to vary based on the state you live in. The majority of states require that you have WC insurance when you have at least one employee. To remain compliant, you should check in with the Department of Labor to learn what you are required to do as a household employer. Even if you live in a state that does not require workers’ compensation insurance, you should still consider having it as a safety net for both you and your household employee.
How to Get a Workers’ Compensation Policy Started
If you’re ready to move ahead with workers’ compensation insurance for your nanny, there are a few places you can turn to get started. First, many insurance companies offer bundles to help consumers save money. If you’re happy with the company that handles your auto insurance, homeowners insurance, or any other insurance, you can start with them to see if they offer workers’ compensation insurance. Next, some online payroll companies will provide an option to add on workers’ compensation coverage. If you’re already using some type of online payroll service to handle your nanny payroll it may be worth looking into how they can help with workers’ compensation and keep everything managed in one place. Some payroll companies have partners that can help you. Using SurePayroll as an example, we partner with the Paychex Insurance Agency to provide workers’ compensation options to small business owners.
There is a lot that goes into hiring a nanny, or other household employees, for your home. The biggest thing to remember is that you are considered an employer, so it’s crucial to protect your nanny the same way other employers protect their employees. Workers’ compensation is a win-win for all parties involved because you’ll be covered should an accident happen, and your employee can rest easy knowing they will also have protection.
Insurance sold and serviced by Paychex Insurance Agency, Inc., 150 Sawgrass Drive, Rochester, NY 14620. CA License 0C28207.
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