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Employing Domestic Workers and the Risks Involved

March 11, 2016

iStock_000036613752_LargeRunning a household takes a lot of work and, in many cases, extra help.  From the landscaper to the chef to the driver, if you employ people to support you and your family, you need to make sure you minimize the potential risks to your employees and yourself.  While domestic workers make your life easier, they also represent many potential hazards that you need to address.  What happens if your housekeeper falls down the stairs or your au pair is involved in a car accident while transporting your children?

The United States’ Department of Labor (DOL), U.S. Equal Employment Opportunities Commission (EEOC) and Fair Labor Standards Act (FLSA) of 1938 each contribute guidelines and requirements for families who employ domestic workers that must be understood and followed.

If an employee gets injured on the job, it is your responsibility as their employer to cover their expenses.  Domestic employees should be covered by a Workers’ Compensation Policy, but each state has different workers’ compensation regulations with coverage being legally required in many states.  These policies protect both the employer and domestic worker should a work related illness or injury occur. They essentially pay any medical bills associated with an employee’s injury, make sure the employee continues to receive income during their recovery or illness and limit your liability.

In addition to ensuring you understand your state’s requirements and making sure you have the right coverage and policy to meet your particular needs, you also need to protect yourself from potential wrongful employment risks like claims of discrimination, harassment, and wrongful termination.

Here are three best practices to manage the risks of employing domestic workers:

  • Hire Smart – Take your time hiring the right workers, be thorough in your interviewing process and do extensive background checks (that include international information, if relevant).  Also, don’t rely too much on word-of-mouth recommendations.
  • Keep It Legal – Many people hire un-documented workers, pay them cash and mistakenly think these workers would be unable to sue them, which is not the case.  Also make sure you don’t treat your employees like independent contractors, as you’ll hear from the IRS if you skip out on paying taxes for your employees.
  • Check Insurance – If you have contractors or subcontractors working in your home, ensure you get a copy of their certificate of insurance that proves their employer has worker’s compensation that would cover them if they were to get hurt on your property.  Similarly, if your nanny or personal assistant is driving you and your loved ones around, make sure their car insurance includes liability coverage or put them on your policy if they’ll be driving your vehicle or have inadequate coverage.

Perhaps most importantly, make sure you work with an agent who is knowledgeable about the unique needs of high net worth families and takes the time to understand your situation and walk you through recommendations of the coverage that will best protect you and your domestic employees.


June Russell

Personal Lines Account Manager


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