Nanny and Household Employee Workers Compensation in Illinois
If you hire someone to work in your home and you control how and when they do the work, you are an employer. That brings obligations most North Shore families never intended to take on, and the one that costs the most when it is missed is workers compensation.
The gap that catches people is specific: homeowners liability policies commonly exclude injury to a residence employee where workers compensation should apply. The policy families assume covers a nanny falling down the stairs is frequently the policy that excludes it.
Who Counts as a Household Employee
The test is control, not job title and not how you pay them. If you set the schedule, direct the work, and provide the tools and the workspace, the person is almost certainly your employee.
| Who they are | Usually your employee | Why |
|---|---|---|
| Nanny or au pair you schedule directly | Yes | You set hours, direct the work, and provide the setting |
| Housekeeper you hire and schedule yourself | Yes | Same test, regardless of how often they come |
| Senior caregiver hired privately | Yes | One of the most common and least recognized cases |
| House manager, personal assistant, or estate staff | Yes | Direct employment, often with the highest wage exposure |
| Cleaner sent by an agency that pays them | No | The agency is the employer. Ask for their certificate |
| Landscaper or contractor with their own business | No | They control their own work and should carry their own coverage |
| Occasional babysitter, a few hours here and there | Generally no | Casual and irregular work usually falls outside, though the line is not bright |
Paying in cash changes nothing about the analysis. Neither does calling someone a contractor or having them sign something that says so. If an injury happens, the state applies its own test, and the paperwork you wrote does not settle it.
What Illinois Expects
Illinois’s workers’ compensation law applies automatically to a household employing domestic workers for a total of at least 40 hours per week for at least 13 weeks in a calendar year. Count the household’s arrangement as a whole, then confirm the policy needed for the work. See Section 3(18) of the Illinois Workers’ Compensation Act.
Illinois also has a Domestic Workers Bill of Rights, which extends minimum wage protections, a day of rest, and other employment protections to household workers. It does not replace the insurance requirement, but it is a useful signal of how the state views this relationship. Anyone employing household staff should be treating it as employment, not as a favor between neighbors.
Going without required coverage can leave the household responsible for benefits and penalties. A homeowners policy is not a substitute for workers’ compensation, so confirm the employment coverage before the worker starts.
Why Your Homeowners Policy Is Not the Answer
Homeowners forms do contain some coverage for injury to residence employees, and families reasonably assume that settles it. It does not, for two reasons.
First, the liability section commonly excludes bodily injury to a residence employee where workers compensation benefits are required or available. Where the state requires coverage, the homeowners policy steps back by design.
Second, where some coverage does exist, it is usually a small medical payments limit rather than the wage replacement and unlimited medical treatment a comp policy provides. A back injury that keeps a caregiver out of work for eight months is not a medical payments claim.
How the Coverage Gets Written
- Endorsement on the homeowners policy. Some carriers will add residence employee workers compensation to an existing policy. This is the simplest route when the carrier offers it, and many do not.
- Standalone household employment policy. A separate comp policy written for domestic employment, which is how most families with full-time staff end up covered.
- Employment practices liability. Worth asking about alongside the comp. Wrongful termination, harassment, and wage claims from household staff are real and are not covered by either the homeowners policy or the comp policy.
Cost is driven by wages paid and the type of work, and for most families it is a small line item next to the homeowners premium. Skipping it leaves the family paying the worker’s medical bills and lost wages directly.
Where This Fits in the Rest of the Household
Household employment often comes with other exposures: someone who drives for the household and belongs on the auto policy, staff who hold keys and alarm codes, and enough net worth that a liability claim could reach past the underlying limits.
That makes this a natural part of a broader review rather than a standalone purchase. See high-value home insurance for how household employment sits alongside scheduled valuables, trust ownership, and second homes, and umbrella insurance for the excess layer that has to sit above all of it. Employers running a business from the home should also look at workers compensation for Illinois businesses, which is a separate policy from household coverage.
Getting It in Place
Tell us who works in the home, roughly how many hours a week, what they are paid, and whether anyone drives for the household. Send the current homeowners and umbrella declarations pages. We will tell you whether your carrier can endorse it or whether a separate policy is the better route, and what each costs.
Call or text 847.242.1040 or start online.
Household Employee Coverage Questions
Do I need workers compensation for my nanny in Illinois?
Illinois’s rule applies to households employing domestic workers for a total of at least 40 hours a week for at least 13 weeks in a calendar year. Tell us the schedule, duties, and employment arrangement so we can confirm the coverage needed.
Does my homeowners insurance cover a nanny who gets hurt?
Usually not in any meaningful way. Homeowners liability commonly excludes injury to a residence employee where workers compensation is required, and whatever medical payments coverage exists carries a small limit with no wage replacement. This is the specific gap the coverage exists to fill.
What if I pay my housekeeper in cash?
How you pay does not change whether an employment relationship exists. The test is control over the work. Paying in cash removes the payroll record without removing the obligation, which leaves the family exposed on the insurance side and on the tax side at the same time.
Is my cleaning service my employee?
Not if they work for a company that hires, schedules, and pays them. In that case the company is the employer, and you should ask for a certificate of insurance showing their workers compensation. If you hire and schedule the person directly, the answer changes.
How much does household employee workers compensation cost?
It is priced off wages paid and the type of work, and for most families it is a modest addition next to the homeowners premium. Whether your existing carrier can endorse it or a separate policy is needed also changes the cost, which is worth checking before you shop.
What about a caregiver for an aging parent?
This is the case families most often miss. A privately hired caregiver working regular hours in the home is a household employee on the same terms as a nanny, and the work carries real physical injury risk from lifting and transfers. If the caregiver came through an agency that employs them, ask the agency for proof of coverage instead.