Workers’ Compensation for a Nanny: Essential Coverage & Tips

For your nanny or household employee

What is Workers’ Compensation for a Nanny?

Workers’ compensation for a nanny provides medical and wage benefits to employees who are injured or become ill on the job. It can cover a worker’s medical bills and a portion of their lost wages. It also protects you, as the employer, from liability. Workers’ compensation coverage is typically required in most industries. However, workers’ comp requirements for a nanny vary by state and may depend on the number of hours your employee works and how many workers you employ.

Workers’ compensation insurance is different from disability insurance. In five states (California, Hawaii, New Jersey, New York, and Rhode Island), household employers are required to make payroll deductions for disability insurance. These employer-paid programs provide short-term benefits to employees who are unable to work due to a non-work-related illness or injury.

In some states and cities, your nanny may also be eligible for paid medical leave. Again, these programs are different from workers’ compensation insurance.

Workers’ Comp Requirements for Household Employers

Workers’ compensation laws vary by state. Review specific workers’ compensation requirements by state.

In general:

States and districts requiring workers’ compensation for all household employees	States requiring workers’ compensation for full-time household employees only
Alaska California Connecticut Delaware Hawaii Iowa Kansas Maryland Massachusetts Minnesota New Hampshire New Jersey Ohio Oklahoma South Dakota Washington, D.C.	Colorado Illinois Kentucky Michigan New York Utah Washington

Even in states where a policy isn’t required, voluntary coverage may be a good idea. It gives you and your nanny peace of mind in the event of an accident or illness. Your employee receives immediate financial support for medical bills and lost pay, while you remain financially protected. In some states, a policy may only cost a few hundred dollars a year.

Worker’s Comp Penalties for Non-Compliance

Non-compliance with your state’s workers’ comp requirements can be one of the biggest financial mistakes you can make as a household employer. A single work-related accident could leave you liable for tens of thousands of dollars in medical bills, lost wages, and state fines. In New York State, for example, you could face a fine of up to $2,000 per every 10-day period of noncompliance. Additionally, the fine for a criminal conviction is from $1,000 to $50,000.

Getting caught is easier than you may think. All it takes is for your nanny to get hurt while working. They go to the hospital, report the injury occurred at work, and file a workers’ comp claim. You will be found to lack the required coverage and may incur a fine for not having a policy. You could be on the hook for at least a portion of your nanny’s lost wages and medical costs. On top of that, you’ll need to pay for temporary care for your child, or elderly loved one, or perhaps go through the hiring process for a new caregiver.

Never assume that your nanny’s work-related injury or illness is covered under your homeowner’s insurance policy. Only in a couple of states (California and New Jersey) can you add workers’ comp for a nanny to your homeowner’s policy.