Workers’ Compensation for Household Staff: Protecting Yourself and Your Employee

Mar 19, 2025 | GTM Blog, Household Employer Policies, Household Payroll & Taxes, Tax Season

For household employers, workers’ compensation insurance is more than just a good idea, it’s typically a legal requirement and critical financial protection. This policy ensures your employee receives help paying their medical expenses and wage replacement if they suffer a work-related injury or illness. Many states require workers’ compensation for household employers, however GTM recommends all household employers carry a policy.

Why Do I Need Workers’ Compensation?

Failure to secure the required workers’ compensation insurance exposes you to significant financial risk. Your employee can take legal action to recover their medical and related costs and lost wages from workplace incidents. This policy is your shield against potential financial disasters. It also ensures that your valued employee receives monetary assistance for medical care and wage replacement if they need to miss work due to a job-related injury. You’ll foster a positive relationship between your employee, as they know you have their best interest in mind. Obtaining voluntary coverage, which can be as low as a few hundred dollars a year depending on your state, provides the same benefits to your employee, giving them peace of mind knowing they’ll get the financial help they need if an injury occurs on the job.

Can I Get in Trouble For Not Having It?

More than 20 states require workers’ compensation for household employers at some level. Don’t make the mistake of thinking you won’t get caught without it. It’s a surprisingly common and expensive error for household employers. A single incident can trigger significant medical bills, lost wages, and fines for non-compliance.

For example, in New York, household employers who fail to secure workers’ compensation coverage face penalties of $2,000 for every 10-day period of noncompliance.

While obtaining required coverage at any point is always a good idea, a workers’ compensation policy must be in place beginning with your employee’s first day of work to avoid penalties for noncompliance.

GTM Can Help

Along with nanny tax and payroll services, GTM Payroll, through the GTM Insurance Agency, can help with workers’ compensation insurance for families with household help. With licensed insurance professionals on staff, we can obtain quotes, manage your policy, and take care of any audits. It truly is one call for all your payroll, tax, and insurance needs. To learn more, or if you have any questions, get a complimentary, no-obligation consultation with one of our household employment experts at (800) 929-9213 or schedule time with us at your convenience.