We can all use a little help with household chores now and then. Most of us are not living at Downton Abbey with the benefit of a staff – but it is wonderful to have help with cleaning and gardening. And of course there is the serious business of families who need childcare and senior caregiving assistance.
But what happens if someone working at your home is injured? Are you responsible for their medical bills and recovery costs? It depends upon the situation. Is the injured person working for a company, an independent contractor, or your employee?
Examples of household help include:
- Babysitters
- Caretakers
- Cleaning people
- Domestic workers
- Drivers
- Health aides
- Housekeepers
- Maids
- Nannies
- Private nurses
- Yard workers
According to the IRS, if the worker is following your instructions, and you provide the equipment and supplies needed to do the job, that person is your household employee.
The Internal Revenue Service (IRS) and Department of Labor look at the following factors to determine a workers’ status:
| Factor | Household employee | Independent contractor |
| Control | Employer directs how, when, and where the work is done. | Worker determines how and when they perform the work. |
| Supplies | Employer often provides the necessary tools and supplies. | Worker generally uses their own tools and equipment. |
| Clients | Works exclusively or primarily for a single household. | Offers services to multiple clients and businesses. |
| Taxes | The employer withholds and pays taxes, like Social Security and Medicare. | The worker is responsible for paying their own self-employment and other taxes. |
| Paperwork | Requires the employer to handle payroll and issue a W-2. | Does not require the employer to handle payroll or issue a W-2 (Form 1099 rules vary). |
If you determine that someone is your employee, don’t assume that home insurance will cover injuries that occur in the course and scope of employment. Usually paid workers are excluded from these policies.
If a worker is considered your employee, first you need to check with the laws in your state to determine your obligations.
In Iowa, if you are paying an individual working in or about a private dwelling who is not a regular household member and whose earnings are $1,500 or more during the 12 consecutive months prior to an injury, you must provide workers’ compensation insurance.
Household employers in Nebraska are not required to have workers’ compensation coverage for any full- or part-time employees. Some choose to purchase it anyway for their own peace of mind and for their employee’s benefit.
Consider this hypothetical situation: you have a part time nanny to help with childcare. He is playing with the kids at the park and injures his back lifting one of the children. At the emergency room, his health insurance is not accepted because he was injured while working. He has medical and physical therapy costs, and lost wages because he cannot work for three weeks. All these expenses, easily in excess of $15,000, would come out of pocket for the family if the employee is not covered by a workers’ compensation policy.
According to a representative of BiBerk, a company that offers workers’ compensation policies to homeowners, policies are divided by hours worked per week: greater or less than 20 hours.
Policies for employees who work less than 20 hours per week generally cost between $300 -$700 per year.
Policies for employees who work more than 20 hours per week run between $600 – $1200 per year.
There are other considerations if you are a household employer. Care.com/HomePay has a list of requirements by state that includes a checklist for beginning employment, during employment, optional benefits for your employee, and ending employment.
Every employment situation is different, depending on the circumstances of employment and the state where you live. Generally, it is a good idea to provide workers’ compensation for an employee, even if the coverage is not state mandated. Speak with an insurance specialist to make sure you are covered in case of an injury.
