Hiring household employees presents a unique example of the value of Workmen’s Compensation insurance. Elder care workers, nannies and caregivers for the disabled are often confronted with routine physical work that can develop into chronic injury. Without it, employees have limited coverage in the event of an on-the-job injury. If an employee is without health insurance, has a very high deductible, or only has poor coverage, the other avenues for recourse are time consuming and bureaucratic. In fact, the employee or the medical professionals providing care may have no other recourse but to sue an employer for medical costs or lost wages.
It is not unusual for a nanny or home health aide to sustain back injuries due to the strain of lifting, moving, dressing and hygiene activities related to proper care. The nature of the work demands fair compensation for medical bills and lost wages associated with the work, and Workers’ Compensation provides this without it, employers and their families are subject to lawsuits and financial risk.
Worker's Compensation is required by many states, including California, for people who employ household employees including elder care workers, nannies, housekeepers, gardeners, and cooks. Worker's Compensation is an efficient way for employers to protect employees, since it only pays for healthcare costs and lost wages that occur in the case of an on-the-job injury; it is a form of protection for all parties, not a form of health insurance. Even in states where there is no legal mandate for Worker's Compensation, it's still a good idea to protect your family by investing in it.
Risks to Not Getting Compensation
If you do not have required Workmen's Compensation insurance, you will be personally held liable for the lost wages and medical bills of your injured employee. With the magnitude of modern health care costs, being sued for these costs can be a devastating, or even bankrupting event.
Workers are entitled to compensation for a wide range of on the job injuries, including those as simple as slipping and falling on the job. Except in cases of negligence, your employees are entitled to compensation for their injuries regardless of fault.
Benefits to Worker's Compensation
There are numerous benefits to getting workmen's compensation when hiring household employees. Not only do you protect your own family against legal action, you also protect your employee in the case of injury. Although employees have recourse through the legal system in the event of injury, it can take months for such cases to be resolved, and in the meantime they are responsible for paying their own bills, which can become very costly.
With Workmen's Compensation, injured workers are able to receive the compensation they are entitled to much more quickly. This is especially important for low-income workers, or for those who have sustained serious injuries.
Obtaining Worker's Compensation
Getting Workmen's Compensation when hiring household employees need not be an expensive or complicated process. In fact, in California, Worker's Compensation is easily available as a rider to the employer’s home owner's or renter’s insurance policy. However, you should never assume that it is automatically a part of your homeowner's or renter’s insurance policy, you must add it on to your existing policy. When it comes to cost, the exact premiums will depend on the number of employees, the type of coverage, and the work the employees do. Your insurance company will be able to give you policy and premium details.
HomeWork Solutions’ Kathleen Webb is a nationally recognized expert on household employment tax matters. HomeWork Solutions assists families nationwide with their household employment tax compliance, and all CareLinx clients have access to HomeWork Solutions services for no additional cost when using CareLinx to manage their caregiver online.