When nannies sign on to be a part of the Happy Baby Solutions family, many have questions regarding workers’ compensation. Because nanny work is such a specialized field, this is kind of a gray area for nannies and employers. A big thanks to Carol Watson for sharing this article from National Nannies with me the other day!
The article shares that the workers’ compensation policies vary from state to state as far as what is required for domestic workers. A lot depends on whether the nanny is a part time or full time employee, so check with your local state policies.
An interesting fact that I wasn’t aware of is that homeowners’ insurance does not cover domestic workers. The article states that guests and visitors have the right to file medical claims if there is injury while they are in the home, but the policy is not meant to cover any form of domestic worker that would actually be in the home working.
A great majority of domestic workers do not comply with the legal tax reporting requirements and those who do not comply with reporting their wages legally are at a disadvantage when it comes to workers’ compensation. Any domestic worker who does not comply with tax reporting requirements, makes workers’ compensation obsolete for themselves, incurring all medical expenses out of their own pocket. One thing to remember, as the article points out though, is “paying employment taxes does not automatically include workers’ compensation benefits”. The employer will still have to purchase a separate worker’s compensation policy.
We also get many questions regarding reporting nanny taxes legally and unlike most believe, reporting legally actually has many benefits for the nanny and the family. We partner with Breedlove and Associates, a nanny taxes and household employee payroll service. They specialize in answering questions you have regarding the legal rights and responsibilities required by nannies and families. The other part of their service is setting up a payroll service for your nanny so you as the family don’t have to stress over how much should be taken out of the nanny’s pay each week, etc. They offer a free phone consultation for those who have simple questions regarding the requirements set forth by each state’s tax laws. Call them at 888-273-3356!
Have you purchased a workers’ compensation policy for your nanny? Why or why not?