Legal Disclaimer: This article provides general information about nanny employment topics and is not legal, tax, or financial advice. Laws vary by state and locality. Consult a qualified attorney, CPA, or tax professional for advice specific to your situation.
If your nanny slips on a wet floor, hurts their back lifting your toddler, or has an accident during a school run, who pays for the medical bills and lost wages? Without workers' compensation insurance, the answer is you — out of pocket, with no coverage cap and full personal liability.
Many states require household employers to carry workers' compensation insurance. Even in states where it is optional, a policy costs far less than the financial exposure of an uninsured workplace injury. This guide explains which states mandate coverage, how to get a policy, and what it typically costs.
Many states require workers' compensation for full-time household employees, including California, New York, Illinois, Massachusetts, and New Jersey. A typical policy costs $300 to $800 per year. Even where not required, carrying coverage protects you from potentially devastating out-of-pocket costs if your nanny is injured on the job.
State-by-State Workers' Comp Requirements
| State | Required for Household Employees? | Threshold/Notes |
|---|---|---|
| California | Yes | Required once the employee has worked 52+ hours (or earned $100+) in the 90 days before an injury — effectively every regular nanny |
| New York | Yes | All household employees working 40+ hours/week; or any hours for live-in workers |
| Illinois | Yes | Household employees working 40+ hours/week for 13+ weeks during a calendar year |
| Massachusetts | Yes | All household employees working 16+ hours/week |
| Washington | No (for a single nanny) | Mandatory only when a household has 2+ domestic employees each regularly working 40+ hours/week; elective L&I coverage is available for a single nanny |
| New Jersey | Yes | All household employees |
| Connecticut | Yes | All household employees working 26+ hours/week |
| Colorado | Yes | Full-time domestic workers (40+ hours/week or 5+ days/week); part-time exempt |
| Texas | No | Optional but recommended |
| Florida | No | Optional for household employers with fewer than 4 employees |
| Georgia | No | Optional for household employers with fewer than 3 employees |
| Washington, D.C. | Yes | Household employees working 240+ hours in a calendar quarter (roughly 19+ hours/week) |
How to Get Coverage
You have several options for obtaining workers' compensation insurance:
- Homeowners insurance endorsement. Some homeowners policies offer a domestic worker endorsement that adds workers' comp coverage for household employees. This is often the least expensive option ($100 to $300 per year) but coverage may be limited.
- Standalone workers' comp policy. Contact an insurance broker or a household employer specialty insurer for a dedicated policy. Expect to pay $300 to $800 per year based on your nanny's wages and your state.
- State fund. Some states (including California, New York, and Washington) operate state insurance funds where you can purchase workers' comp directly if private insurers will not cover you.
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- Medical expenses: Doctor visits, hospital stays, surgery, physical therapy, medications
- Lost wages: Typically 60-70% of the employee's average weekly wage during recovery
- Disability benefits: Compensation for temporary or permanent disability resulting from a work injury
- Rehabilitation: Vocational rehabilitation if the employee cannot return to their previous role
Workers' comp is a no-fault system, meaning your nanny does not need to prove you were negligent to receive benefits. In exchange, workers' comp generally serves as the exclusive remedy, meaning your nanny cannot sue you for damages beyond what the policy covers (with limited exceptions for gross negligence).
Penalties for Non-Compliance
Failing to carry required workers' comp can result in severe consequences:
- New York: Misdemeanor; fines of $2,000 per 10-day period of non-compliance
- California: Misdemeanor; fines up to $10,000 or imprisonment, plus personal liability for all medical costs
- Illinois: $500 per day of non-compliance; potential criminal charges
- All states: Full personal liability for injured employee's medical bills, lost wages, and potential civil lawsuit damages
Factor workers' comp into your overall nanny employment costs from the start. It is one of the most affordable forms of protection you can carry as a household employer. For a complete overview of employer obligations, see our nanny tax guide.
Legal Disclaimer: This article provides general information about nanny employment topics and is not legal, tax, or financial advice. Laws vary by state and locality. Consult a qualified attorney, CPA, or tax professional for advice specific to your situation.
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