You never know what life’s going to throw at you. We all do our best to stay prepared. We buy insurance. We get a good security system for our homes. We put money safely into savings accounts, hoping that the “rainy day” they are there for will never come. But life has a way of surprising you with havoc, no matter how prepared you think you are! Recently a friend and client of mine hired a new maid. Unfortunately, she slipped on the stairs while vacuuming and ended up breaking her leg. Thank goodness it wasn’t worse. My client was beside herself and felt terrible about the accident. But it got me thinking about workers’ compensation and the issues you may not be aware of when hiring household staff.
You may think that homeowner’s insurance would cover you. But this isn’t always true, and it’s a risky place to put your trust. While homeowners insurance will cover some medical expenses if someone is injured in your home, employed or otherwise, it is often not enough to cover the bills associated with more serious injuries. So when do you need to carry workers’ compensation for domestic workers?
Here’s the key. If you are an employer, then you need to provide a safe workplace, including worker’s compensation in case of accidents. But if you are a customer, worker’s compensation would not fall under your responsibility. So you need to know if the domestic worker is your employee or an “independent contractor” whose services you pay for.
If your maid, for instance, brings her own supplies (detergent, mop, etc.) bought with her own money, she’s probably an independent contractor. The same goes if she works for a service that furnishes her supplies. In these cases, the maid is a service you are paying for, and worker’s comp is not necessary.
On the other hand, a maid (or other domestic help) would likely be considered your employee in situations where:
- You provide their supplies
- You pay them a salary
- They work for you full-time
- They live with you
In cases such as these, you need to provide workers comp. Even when the hazards of the job may not be obvious, you never know what could go wrong. Think of workers’ comp as an extension of your family’s insurance – a safety net for you as well as domestic staff.
Each situation can vary, of course, so to be sure, check with your property and casualty insurance agent. Or contact us at PARTNERSINWEALTH. As your knowledgeable and trustworthy single point of contact for financial questions and concerns, we will help you find the right answer so that you will be in control of the situation, rather than letting it control you. To learn more about us, please contact Jim Waters, CFP®, at 713.964.4028 or firstname.lastname@example.org.