Protecting Yourself as a Household Employer

Practical steps that protect your family, your home and the people who work in it.

The best household placements rest on trust. But trust works best when it's backed by clear expectations, good paperwork and the right protections in place. None of this is about expecting the worst. It's about making sure both your family and your employee know exactly where they stand, so the relationship can last.

1. Define the Role in Writing

Before you hire, write down what the job really is: duties, schedule, who the employee reports to, where they'll work, and what "a great job" looks like. A clear job description attracts the right candidates and gives you both something to come back to when questions come up.

2. Use a Written Work Agreement

A work agreement turns a handshake into a shared understanding. It typically covers:

Pay, pay schedule and how overtime is handled
Hours, days off and on-call expectations
Paid time off, holidays and sick time
Duties and any travel requirements
Housing or vehicle terms, if provided
A trial period, and how either side can end employment
Confidentiality expectations

Review it together, sign it, and update it when the role changes.

3. Classify Your Employee Correctly

Most people who work regularly in your home are household employees, not independent contractors, even if they work only part time. Getting this wrong can lead to back taxes and penalties. The IRS publishes guidance for household employers, including Publication 926 (the Household Employer's Tax Guide), which is a good place to start.

4. Run Payroll the Right Way

Paying household staff properly means withholding and paying the right taxes, issuing a W-2, and keeping records. A payroll service that specializes in household employment can handle this for you and help you stay current with federal and Montana requirements. Ask us for an introduction to the household payroll partner we work with.

5. Review Your Insurance

Talk with your insurance agent about how your coverage applies when someone works in your home. Questions to ask include:

Whether workers' compensation coverage is required or advisable for your household
Whether your homeowner's or umbrella policy covers injuries to household staff
Auto coverage if your employee drives your vehicles or drives your children
Coverage for valuables, art and collections when staff have access to them

6. Protect Your Privacy

Confidentiality matters in every home, and especially in high-profile ones. A confidentiality agreement should spell out what can't be shared, including your home, family, guests, schedule and travel, and set clear rules on photos and social media. Explain the expectations in person too, so they feel like part of the culture of your home and not just a form.

7. Screen Thoroughly

Verify identity and work history, speak with references from comparable households, and run background checks with the candidate's written consent, following federal and state rules. Working with an agency that screens every candidate takes much of this work off your plate.

8. Set Clear Household Policies

Many families keep a simple household manual. It might cover:

Security systems, alarm codes and access
Use of phones and personal devices during work hours
Guests, deliveries and visitors
Vehicles, keys and equipment
Pets, children's routines and house rules
Any cameras in the home (be open about them, and know the rules where you live)

9. Check In Regularly

Most problems in household employment start small. A short weekly check-in and a more formal review once or twice a year give you both a chance to raise concerns early, adjust duties and recognize good work.

10. Plan for a Respectful Ending

Even great placements end, whether a family moves, children grow up, or an employee's life changes. Agree in advance on notice periods, what happens with housing and vehicles, the return of keys and devices, and how final pay is handled. A respectful ending protects your reputation and your privacy.