If you employ a nanny, housekeeper, estate manager, caregiver, or gardener, you are an employer in the eyes of California law — with the same core obligations as a business, including workers' compensation, wage-and-hour compliance, and exposure to employment claims. Most families don't think of themselves this way, and their insurance reflects that: a homeowners policy that assumes only "occasional" help, no employment-practices coverage, and a workers'-comp gap that surfaces the day a household employee is injured on the job.
This guide explains what California actually requires when you employ household staff, where the standard homeowners policy falls short, and how to structure coverage so a workplace injury or an employment dispute with staff doesn't become a personal financial problem.
You Are an Employer — Even With One Household Worker
When you hire someone to work in or around your home and you control how the work is done, they are generally your employee, not an independent contractor. That triggers real obligations: workers' compensation (see below), payroll taxes and withholding (the "nanny tax"), wage-and-hour compliance, and — for many domestic workers — overtime under California's Domestic Worker Bill of Rights. Treating a regular household employee as a "contractor" to sidestep these is the most common and costly mistake families make.
Workers' Compensation for Household Employees
California requires workers' compensation for household employees who exceed a modest work threshold — generally, someone who worked more than 52 hours or earned more than $100 during the 90 calendar days before an injury is a covered employee who must be protected by workers' comp. Below that threshold, a worker may be considered "occasional," and a homeowners policy's limited residence-employee coverage might respond.
The practical implications:
- A full-time nanny, live-in housekeeper, or estate manager is well over the threshold and needs proper workers' comp coverage.
- If an uninsured household employee is injured, you can be personally liable for their full medical care and lost wages — and lose the legal protections that comp normally provides. See our workers' compensation guide for how the system and penalties work.
- Household/domestic workers' comp is available either as a standalone policy or, for qualifying occasional workers, through a residence-employee endorsement on a homeowners policy.
The moment your "help around the house" becomes a regular employee, your homeowners policy stops being enough. The gap is invisible until someone is hurt on your property — which is exactly when it's most expensive to discover.
Where the Homeowners Policy Falls Short
A standard homeowners policy was not designed to be an employer's insurance program. Its residence-employee workers' comp is typically limited to occasional workers below the state threshold, and its liability coverage does not address employment-related claims at all. So a family with regular staff has two gaps a homeowners policy can't close: adequate workers' comp for injuries, and coverage for employment disputes.
Employment-Practices Liability for Household Staff
Household employees can bring the same claims a business's employees can — wrongful termination, discrimination, harassment, and retaliation. These are not covered by homeowners liability. Affluent families increasingly add employment-practices liability (EPLI) for household staff, frequently available as an endorsement on a private-client umbrella or homeowners policy. Given California's employee-protective laws, this is a meaningful and often-overlooked exposure for a household with staff. Coordinating it with your personal umbrella keeps the protection aligned.
Wage-and-Hour and the Domestic Worker Bill of Rights
California's Domestic Worker Bill of Rights extends overtime protections to many domestic workers — including personal attendants — so hours, breaks, and overtime need to be tracked and paid correctly. Wage-and-hour claims are generally not covered by insurance, so compliance here is about practices, not policies: accurate timekeeping, correct overtime, and proper pay records. When in doubt, a household-payroll service or employment attorney is worth the cost.
Coordinating With Your Private-Client Program
Household-staff coverage works best as part of a coordinated program rather than a one-off policy. Folding domestic workers' comp and staff EPLI in alongside your home, valuables, auto, and umbrella keeps limits consistent, puts claims with one carrier and adjuster, and avoids the seams where a claim can fall through. It's the same logic that governs insuring a high-value home — the pieces should work as one system.
How to Cover Household Staff Properly — A Checklist
- Classify staff correctly as employees, not contractors, when you control the work.
- Carry workers' comp for any employee over the state's occasional-worker threshold — don't rely on homeowners limits.
- Add EPLI for household staff, typically via an umbrella or homeowners endorsement.
- Comply with wage-and-hour law — track hours, pay overtime, keep records (insurance won't cover these claims).
- Handle payroll and taxes properly, ideally through a household-payroll service.
- Coordinate all of it within your private-client program and umbrella.
Frequently Asked Questions
Do I need workers' comp for a part-time nanny or housekeeper?
Very likely. California generally requires workers' compensation for household employees who work more than about 52 hours, or earn more than $100, in the 90 days before an injury. Only genuinely occasional workers below that threshold may be covered by a homeowners policy's limited residence-employee coverage. A regular part-time nanny usually exceeds the threshold.
Isn't my housekeeper an independent contractor?
Usually not. If you control how, when, and where the work is done — as most families do with household staff — they're your employee under California law. Misclassifying a regular household worker as a contractor exposes you to back taxes, penalties, and personal liability for an uninsured injury.
Does my homeowners policy cover a household employee's injury?
Only in a limited way, and typically only for occasional workers below the state threshold. For a regular employee — a full-time nanny, live-in housekeeper, or estate manager — you need a proper household workers' compensation policy; the homeowners limit is not designed for that exposure.
Can a household employee sue me for wrongful termination or harassment?
Yes — household employees can bring the same employment claims as any worker, and homeowners liability doesn't cover them. Employment-practices liability (EPLI) for household staff, often available through a private-client umbrella or homeowners endorsement, is designed for exactly this.
Sources & Further Reading
- California Division of Workers' Compensation — workers' comp requirements, including for residence employees.
- California Labor Commissioner (DLSE) — the Domestic Worker Bill of Rights and wage-and-hour rules for household employers.
- IRS — Household Employer ("Nanny Tax") — federal payroll-tax obligations for household employers.
Talk to Bollinsure
Bollinsure is an independent California broker that helps families who employ household staff insure the exposure properly — placing domestic workers' compensation, adding employment-practices liability for staff, and coordinating it with your home, umbrella, and the rest of your private-client program. If you have a nanny, housekeeper, caregiver, or estate manager and aren't certain you're covered for an on-the-job injury or an employment claim, a free review is the fastest way to find out. Request a review.