If you hire a caretaker for your children, you cannot afford to leave this off the table.
Do Families Need Workers’ Comp Insurance For The Nanny?
Hiring a nanny can be an invaluable experience in the life of any family with young children. Nannies help make life easier and less stressful, allowing parents to keep working or focusing on other aspects of their lives. They generally contribute positively to the entire household’s well-being and happiness.
However, there are many misconceptions about what workers’ compensation insurance covers—and some people may think that it does not apply to nannies when it does.
What Is Workers’ Compensation Insurance?
To comply with the law, employers must exercise reasonable diligence in providing safe working conditions for their employees. Workers’ compensation insurance ensures they are cared for financially and medically when an employee is hurt. When it comes to legislation, no two states are identical.
In general, all states require workers’ compensation insurance, except for a few that choose to opt-out. Some states do not need it if you have fewer than three employees; others may have stipulations. Also, some companies may be exempt from having workers’ comp insurance in some instances.
For example, work done in your home or running errands like shopping for groceries, babysitting, or dropping off dry cleaning typically does not count as employment unless there is an agreement between you and a family member or friend that could qualify as an employee by law.
According to state laws, your employee has a right to any benefits they were allowed through workers’ compensation even if they counted as independent contractors instead of employees.
Workers’ Compensation Requirements For Household Employers
Domestic employers’ workers’ compensation insurance covers medical and wage benefits for nannies and other household workers who get injured or become ill while working. The insurance pays workers’ medical expenses and a portion of their missed salary. It also shields you from obligation as a domestic employer.
In some states, household employers must purchase workers’ compensation insurance before hiring a nanny or other household employee. However, some places allow you to take out a policy after employing your worker, and some will not require coverage if your spouse does all of your childcare work.
Check with your state’s department of labor to see if workers’ comp is mandatory in your area or optional. You will also need to determine whether adding a domestic worker like a nanny to an existing policy makes sense or if you need separate insurance altogether.
States That Require Full-Time Employment For A Nanny
When an employee gets injured on the job, the workers’ compensation insurance protects the company and the employee. If the insurance offers such coverage, all household employers should contact a licensed insurance agent and make the necessary arrangements.
Most states require domestic workers to provide their staff with Workers’ Compensation coverage. It helps employers pay for medical bills and lost wages if an employee is hurt. So it makes sense for households employing full-time nannies to get this protection, even though most families use part-time nannies.
As stated earlier, most states, such as Alaska, California, Colorado, Delaware, Illinois, Iowa, Massachusetts, Michigan, Minnesota, and so on, require full-time employment for nannies. However, there are many other states where household employers can choose between no coverage or limited coverage. With the limited coverage, a family may use worker’s comp insurance for the nanny but will need to pay for any benefits that exceed those covered under worker’s comp.
Here is a complete list of the states that require full-time employment for a nanny or a household employee for it to require Workers’ Comp coverage:
- New Hampshire
- New Jersey
- New York
- South Dakota
Penalties For Non-Compliance
The penalties for non-compliance with the Worker’s Compensation Insurance differ in each state. But, one thing is clear: having the protection of this insurance does not go unnoticed by employers or regulators.
Some states require that nannies have workers’ comp coverage if they spend at least 20% of their time working in a home and children under age 18 live there. Other states, however, require that all household employees – including nannies – are covered as long as they spend at least 8 hours a week working on the premises where children reside or visit regularly.
The Differences Between A Babysitter And A Nanny
A nanny is a full-time job. You usually employ nannies to work for the family. Nannies are very invested in children’s development. Furthermore, nannies usually work with one family.
On the other hand, babysitters are not involved with the family and work as caregivers only when needed. A babysitter only temporarily cares for the children on behalf of the parents. They take care of children only on an as-needed basis. They keep the children safe for a couple of hours. Being a babysitter is a part-time job.
In terms of insurance, nannies get a stipend for medical insurance. However, they should receive payment via W-2 since they get hourly charges. On the other hand, babysitters are not eligible for workers’ compensation, although they can suffer severe injuries during working hours. So, you cannot treat nannies the same way you would a babysitter, and you need to pay workers’ compensation insurance.
Does Homeowners’ Insurance Cover Workers’ Compensation?
The honest answer is – it depends. Any state can have different laws when it comes to workers’ comp. Sometimes, the insurance policy will cover the compensation if the person works more than 40 hours a week. Also, if someone gets ill, they will help you cover the costs.
Yet, if you employ people to work in your home, the best bet is to cover them because accidents happen, and you will be financially liable. So, when you choose a firm, ask for documentation to see if they provide compensation for the employees.
Get familiar with the no-fault medical coverage in the homeowner’s policy.
If someone who works for you gets an injury, you can submit the medical bills to your insurance company.
Workers comp will provide medical care coverage for the injured employee who can no longer work.
Although having workers’ comp insurance is not obligatory in all states, and sometimes employers have the right to decide if they will pay it, the best thing to do would be to protect your nanny at all costs.
You must know your state’s laws, rules, and regulations regarding your household employees.
Any accident can happen, and you must ensure you and your caregivers are safe and protected.
Most people who work with children can suffer various injuries, so workers’ comp is a resource for a replacement income. Once you decide which nanny to employ and how much you will pay them, the next thing to do is decide on the workers’ compensation policy.
Do You Have To Provide Workers’ Compensation For Your Nanny?
Yes, you have to provide workers’ comp for your nanny. Most states require that you pay for a workers’ comp even if you have only one employee.
However, even if your state does not oblige you to make the payment, it would be best if you invested in workers’ comp. Instead of worrying about what could happen, you and your nanny will feel calm and not focus on worst-case scenarios.
The nanny will receive immediate support with medical bills, which might cost you only a few hundred dollars yearly.
Where Do Household Employers Need Workers’ Compensation Insurance?
Any household employer with more than five employees must provide workers’ comp insurance. In addition, most states in America, such as Colorado, Columbia, California, Ohio, Oklahoma, South Dakota, etc., require comp insurance.
What Is The Price For The Nanny’s Compensation Insurance?
Of course, the nanny’s insurance prices vary from state to state, and you can receive a free instant quote online. However, the average cost you would have to pay would be about $800 a year. So no matter the price, it is worth paying because it will protect you and the nanny.
Why Do I Need The Workers’ Compensation Insurance?
This insurance is significant if you have a nanny who regularly takes care of your child. It would help if you had this insurance because although you might take all the necessary precautions, you can never be cautious enough. In addition, nannies participate in various activities, both safe and unsafe.
Which Professions Come With The Highest Workers’ Compensation Claims?
Since specific jobs are more injury-prone, the claims can vary. Some professions with the highest compensation claims are workers in the nursing care industry, animal production, wood production, air transportation, and couriers.
How Should I Pay Overtime Hours For My Nanny?
Regarding overtime, you need to pay your nanny 1.5 times the hourly wage. However, the wage will remain the same if the nanny lives with you.