Hiring someone to help you with a new baby can be a huge help when you’re running a business or trying to deal with older kids. Some families hire a caregiver to help with their elderly parents so they can age at home — safely and with proper care. No matter what kind of help you hire, when someone works for your family working in your home, they are a domestic employee.
As an employer, you have certain responsibilities, including protecting them from injury and yourself from potential liability.
Do you need workers’ comp insurance when you hire a domestic employee? Here’s what you need to know.
What is a Domestic Employee?
If you’re unsure whether your employee can be considered a domestic employee for tax purposes, it’s always a good idea to check with your tax accountant or an attorney. In general, the IRS considers a variety of job roles as a domestic employee:
- Nannies
- Housekeepers
- Home health aides
- Adult caregivers
- Gardeners
- Personal chefs
- Personal assistants
- And more
Is Workers’ Compensation Insurance Required?
Workers’ compensation laws vary from state to state. In North Carolina, workers’ comp isn’t required for domestic employees. But just because you don’t have to buy coverage, doesn’t mean it’s not a good idea.
As an employer, you can be held liable when an employee is hurt or becomes ill in the course of their job duties. Workers’ compensation is a form of insurance that protects you both. You pay an annual premium, and in exchange, you and your employee are covered if they get hurt, become ill, or even die while on the job.
While workers’ comp has a reputation for being expensive, your premiums are based on the number of employees you have, their relative risk on the job, and their annual wages. It may not be as expensive as you fear.
Workers’ comp pays your domestic workers’ lost wages and medical expenses after an injury or illness. If they die, their family receives death benefits from the policy. In exchange, when they accept workers’ compensation, they usually forfeit any right to sue you. Without workers’ comp, employees can sue you, and you may be found liable for their costs and their legal fees.
Hiring someone to help you around your home — or your parents’ home? Make sure you and your domestic employees are covered in case of an injury or illness. Contact Charlotte Insurance today for a free quote for workers’ comp insurance.