Do I Need Workers' Compensation Insurance for a Nanny or Housekeeper?
Quick Answer / Executive Summary
In roughly 20 states, yes, once your household employee crosses that state's specific hours or wage threshold - commonly 40 hours a week, or in California, more than 52 hours and $100 in wages within a 90-day period. Other states exclude domestic workers from their workers' compensation mandate entirely, though carrying voluntary coverage is still widely recommended even where it isn't required. See the full workers' compensation exemptions guide for how household employment compares to other exemption categories.
Key Takeaways at a Glance
- Most states exclude domestic workers from the same employee-count rules that apply to ordinary businesses, instead applying their own separate hours or wage threshold specific to household employment.
- California requires coverage once a household employee works more than 52 hours and earns more than $100 in the 90 days before an injury; New York's threshold is 40 hours a week with the same household.
- A meaningful number of states require coverage for household employees at some hours-based or wage-based threshold, while several others leave it optional entirely - there is no single nationwide rule, so checking your specific state is the only reliable approach.
- Coverage typically costs $300 to $800 a year as a standalone household employer policy, or $100 to $300 as a domestic worker endorsement added to a homeowners policy - often the least expensive route where it's available.
- Skipping required coverage exposes the household employer to state penalties (as high as $2,000 per 10-day period of noncompliance in New York) plus direct personal liability for medical bills and lost wages if the worker is hurt.
Why Household Employment Gets Its Own Rules
Domestic workers - nannies, housekeepers, caregivers, gardeners - are employed by a private household rather than a commercial enterprise, and most state workers' compensation statutes explicitly exclude "domestic servants in private homes" from the standard employee-count thresholds that apply to small businesses. That doesn't mean domestic workers are always uncovered; it means states wrote a separate, parallel rule specifically for household employment, usually triggered by hours worked or wages paid rather than by how many people the household employs.
The Thresholds That Actually Trigger Coverage
California requires coverage once a domestic worker has worked more than 52 hours and earned more than $100 in the 90 calendar days before an injury - a combined hours-and-wage test, not just an hours count. New York requires coverage at 40 or more hours per week with the same employer. Other states set their own thresholds - some hours-based, some wage-based, some a combination - commonly in a similar range, and a state with no specific household employer statute typically leaves the decision voluntary. Because a regular nanny or full-time housekeeper crosses most of these thresholds quickly, many household employers who assume they're too small to need coverage discover they've already met their state's trigger. Confirm your specific state's rule directly with its workers' compensation board rather than assuming a threshold from another state applies.
How to Actually Get Coverage
Two common paths exist. A domestic worker endorsement added to an existing homeowners insurance policy is often the cheapest option, typically $100 to $300 a year, though the coverage can be more limited than a dedicated policy. A standalone household employer workers' compensation policy, arranged through a broker or a specialty household-employment insurer, generally runs $300 to $800 a year depending on the employee's wages and the state. Premiums are typically based on the worker's annual wages, and some states (California among them) audit household employers' quarterly filings to confirm the correct premium was paid.
What Happens Without Required Coverage
The consequences of skipping required coverage go beyond a missed premium. A household employer who should have carried coverage and didn't can face direct state penalties - New York cites fines accruing at up to $2,000 for every 10 days without coverage - and separately can be held personally liable for the full cost of a household employee's medical treatment and lost wages if they're hurt on the job, without any of the caps or predictability a workers' comp policy would have provided. In states where coverage isn't legally required, most household-employment specialists still recommend it precisely because that personal liability exposure exists regardless of the legal mandate.
What You Should Do: Step-by-Step Action Plan
1
Confirm your specific state's household employer threshold - hours, wages, or both - before assuming your nanny or housekeeper falls outside coverage requirements.
2
Check whether a domestic worker endorsement on your existing homeowners policy is available before shopping for a standalone policy.
3
Keep accurate records of hours worked and wages paid, since several states use exactly these figures to determine both the coverage requirement and the correct premium.
4
Carry voluntary coverage even where not legally required, given the personal liability exposure if a household employee is hurt without any coverage in place.
Critical Mistakes to Avoid
- Assuming domestic workers follow the same employee-count rule as a business, rather than their own separate household employer threshold.
- Classifying a regular nanny or housekeeper as a 1099 independent contractor to avoid the question entirely - most household workers are legally employees under IRS rules regardless of how they're paid, and face the same reclassification pitfalls seen in 1099 subcontractor workers' comp audits.
- Underreporting hours or wages to stay under a state's threshold, which several states specifically audit for.
- Assuming a state with no mandate means no risk - personal liability for an uninsured injury still exists either way.