Workers' Compensation Guide for Household Employers

Workers' Compensation for Household Employers

Workers' compensation insurance provides medical benefits and wage replacement to employees injured on the job. Requirements for household employers vary significantly by state.

Do You Need Workers' Comp?

Most states make workers' comp optional for household employers. However, some states require it, and in all states, you're liable for workplace injuries whether or not you carry insurance.

States Requiring Workers' Comp for Household Employers

State	Threshold	Notes
California	If you pay $1,000+ per quarter to any one employee	Can self-insure with $750,000+ net worth
New Jersey	If you pay $1,000+ per calendar year	One employee earning $1,000+ triggers requirement
New York	If you employ anyone for 40+ hours per week	Full-time household employees must be covered

States Making Workers' Comp Optional (But Recommended)

All other states (47 + DC) do not require household employers to carry workers' compensation insurance.

However, if you don't carry coverage, you're personally responsible for:

• All medical expenses from workplace injuries
• Lost wages during recovery
• Permanent disability costs
• Legal fees if the employee sues

What Workers' Comp Covers

A workers' compensation policy typically covers:

Medical Expenses

• Doctor visits and emergency room care
• Hospitalization and surgery
• Prescription medications
• Physical therapy and rehabilitation
• Medical equipment (crutches, wheelchairs, etc.)

Lost Wages

• Temporary disability payments (usually 2/3 of average weekly wage)
• Permanent disability settlements
• Vocational rehabilitation if employee can't return to same work

Death Benefits

• Funeral expenses
• Survivor benefits to spouse and dependents

Legal Protection

• Defense costs if employee sues
• Settlement or judgment payments

What It Costs

Workers' comp premiums for household employers typically range from $200 to $1,000+ per year, depending on:

• State: Rates vary widely (CA and NY are most expensive)
• Occupation: Higher-risk jobs (caregivers who lift patients) cost more than lower-risk jobs (housekeepers)
• Payroll: Premium is based on total annual wages
• Claims history: First-time buyers get standard rates; claims increase future premiums

Sample Premium Estimates

State	Occupation	Annual Payroll	Estimated Premium
California	Nanny	$40,000	$500-700
New York	Senior caregiver	$35,000	$600-900
Florida	Housekeeper	$25,000	$200-400
Texas	Personal assistant	$30,000	$250-450

Note: These are estimates only. Actual premiums vary by insurer and individual risk factors.

How to Get Coverage

Step 1: Determine If You Need It

Check your state's requirements:

• Required in CA, NJ, NY? Get coverage before employee starts
• Optional in other states? Assess your risk tolerance and budget

Step 2: Get Quotes

Contact insurers who offer household workers' comp:

• National carriers: The Hartford, Travelers, Liberty Mutual
• Regional carriers: Varies by state
• Specialty household insurers: NEXT Insurance, Cerity (formerly Employers Insurance Agency)
• Insurance brokers: Can shop multiple carriers for you

Step 3: Provide Required Information

Insurers will ask for:

• Your name, address, and EIN
• Employee job title and duties
• Employee annual wages
• Number of employees
• Coverage start date

Step 4: Choose Coverage Amount

Most states set minimum coverage levels. Common options:

• Part A (Workers' Comp): Statutory limits (no dollar cap)
• Part B (Employer's Liability): $100,000 / $500,000 / $100,000 typical

Step 5: Pay Premium and Receive Policy

• Payment: Annual premium paid upfront or in installments
• Policy: Delivered electronically or by mail
• Certificate: Keep in your records; may need to show state labor department

Avoiding Claims

Reduce injury risk and keep premiums low by:

Safe Work Environment

• Clear walkways and stairs
• Non-slip mats in bathrooms
• Adequate lighting
• Smoke and CO detectors
• Fire extinguisher

Proper Training

• Lift techniques (if caregiving)
• Equipment use (if using lawn mower, vacuum, etc.)
• Chemical handling (cleaning products)
• Emergency procedures

Appropriate Equipment

• Step stools (not chairs) for reaching high places
• Dolly or cart for heavy items
• Protective gloves for cleaning

Clear Expectations

• Written job description
• Documented safety protocols
• Regular check-ins on safety concerns

What to Do If an Injury Occurs

If your employee gets hurt on the job:

Immediate Steps

1. Provide first aid or call 911 if serious
2. Get medical care - send employee to doctor or ER
3. Document everything
   • Date and time of injury
   • What happened (employee's account)
   • Witnesses (if any)
   • Photos of injury and scene

Within 24-48 Hours

4. Notify your insurance carrier

   • Call claims hotline (on your policy)
   • Provide injury details
   • Get claim number

5. File state workers' comp report (if required in your state)

   • Deadline varies (typically 7-10 days)
   • Form available from state labor department

Follow-Up

6. Stay in contact with employee

   • Check on recovery
   • Coordinate return to work
   • Maintain employment relationship

7. Cooperate with insurance investigation

   • Provide requested documents
   • Answer adjuster questions
   • Don't admit fault or liability

If You Don't Have Coverage

If you don't carry workers' comp and an employee gets injured:

Your Liability

• Medical bills: You pay out of pocket
• Lost wages: You may owe 2/3 of their salary during recovery
• Legal exposure: Employee can sue for negligence
• Penalties: Some states fine uninsured employers (CA: $10,000+)

Your Options

1. Pay medical bills directly: Negotiate with providers
2. Workers' comp through homeowners insurance: Some policies include limited coverage
3. Settle with employee: Written release in exchange for payment (consult attorney)
4. Defend lawsuit: Hire attorney if employee sues (very expensive)

Retroactive Coverage

Some insurers will sell retroactive policies if the injury just happened and you don't have coverage. However:

• Premiums are much higher
• Not available in all states
• Some insurers won't cover pre-existing injuries

Bottom line: It's far cheaper to buy coverage upfront than to deal with an uninsured claim.

State-Specific Resources

California

• State Fund: SCIF.com
• Division of Workers' Compensation: Dir.ca.gov/dwc

New Jersey

• Department of Labor: NJ.gov/labor/wc
• Assigned Risk Pool: For employers who can't get coverage in regular market

New York

• Workers' Compensation Board: WCB.ny.gov
• State Insurance Fund: NYSif.com

All Other States

• Check your state's department of labor or insurance website
• Search "[State name] workers compensation household employer"

Frequently Asked Questions

Can I use my homeowners insurance instead?

No. Homeowners insurance typically excludes coverage for employees. You need a separate workers' comp policy.

What if my employee is part-time?

Workers' comp covers all employees, regardless of hours worked. Premiums are based on total annual wages.

What if I hire through an agency?

If you hire through a staffing agency, the agency should carry workers' comp. Get a certificate of insurance to verify coverage.

What if my employee refuses medical treatment?

Document their refusal in writing. Workers' comp only covers medical expenses if the employee seeks treatment.

Will my premium go up if there's a claim?

Yes, claims history affects future premiums. However, one small claim may not significantly increase rates.

Alternatives to Traditional Workers' Comp

Homeowner Umbrella Policy

Some umbrella policies provide limited coverage for household employee injuries. Check your policy terms.

Pros: May already have it Cons: Lower limits, may not cover all scenarios

Occupational Accident Insurance

Some insurers offer "occ accident" policies as an alternative to workers' comp.

Pros: Sometimes cheaper Cons: Not accepted in states requiring workers' comp, may have coverage gaps

Self-Insurance

If you have significant assets, you can self-insure for workers' comp liability.

Pros: No premiums Cons: Unlimited personal exposure, not allowed in states requiring coverage

Key Takeaways

1. Know your state's rules: CA, NJ, and NY require coverage; all others make it optional
2. Budget $200-1,000/year: Typical premium range for household employers
3. Shop around: Get quotes from multiple insurers
4. Prevent injuries: Safe workplace reduces claims and premiums
5. Act fast if injury occurs: Notify insurer within 24-48 hours

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Disclaimer: This guide provides general information only. Workers' compensation laws vary by state. Consult an insurance professional or attorney for advice specific to your situation.