Employers Liability Insurance - If you have a AP?

[NewTeacher]

Didnt want to hijack someone elses thread so have started a new one.

Someone mentioned that having an AP makes you an employer so you need to have Employers Liability Insurance and they provided a very helpful link.
www.hse.gov.uk/pubns/hse40.pdf

Now having read through it, I came across the following:

You may not need employers? liability insurance for people who work for you where:
you do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers? liability insurance to cover them.

Au Pairs dont pay income tax or NI contributions so doesnt this mean we dont need this insurance?

Many Thanks

Au pairs don't pay tax or NI not because they're not employees but because they are live in and therefore exempt from minimum wage legislation so many people choose to pay them under the threshold for such deductions. If you paid them more (because they were working more hours for example) then you would be making those deductions.

In fact that sheet is quite badly worded on the tax/NI deductions point IMO. Those deductions are not some kind of litmus test for whether someone is your employee or not, however obviously if you do deduct tax and NI then they are your employee.

It's a case of A equals B (tax and NI deductions make someone an employee) but NOT A does not automatically equal NOT B (not making those deductions doesn't mean they're not an employee.

So how do you know for definite? As in how do I make sure whether I need it or not?

In general au pairs are regarded by the law as having exactly the same status as a nanny - that of a domestic employee. They fit most of the criteria for employment:

■ you deduct national insurance and income tax from the money you pay them; - or you would if they were earning enough on a weekly basis
■ you have the right to control where and when they work and how they do it; - you set their hours, they work in your house and you tell them what to do
■ you supply their work materials and equipment; - they use the things in your house and if they want to do, say, a special craft activity you are the one who buys the materials
■ you have a right to any profit your workers make although you may choose to share this with them through commission, performance pay or shares in the company; - N/A
■ you require that person only to deliver the service and they cannot employ a substitute if they are unable to do the work; - the au pair can't suddenly decide to send their friend along, the contract is with you
■ they are treated in the same way as other employees, for example, they do the same work under the same conditions as someone else you employ.- probably also N/A unless you employ a nanny/au pair combo

You may not need employers? liability insurance for people who work for you where:
■ they do not work exclusively for you (for example, if they operate as an independent contractor); - au pairs typically work exclusively for one family, any other work is as a 'second job'
■ they supply most of the equipment and materials they need to do the job; - they may occasionally use some of their own resources but in general it's at the cost of the family
■ they are clearly in business for their own personal benefit; - nope
■ they can employ a substitute when they are unable to do the work themselves; - nope
■ you do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers? liability insurance to cover them. - they are obviously not self-employed for tax purposes so N/A

You also, presumably, have a contract with your au pair which is a contract of employment, or some form of written statement saying that they do abc in return for xyz (and if you don't then you should).

The leaflet does say "One difficult area is domestic help. In general, you will probably not need employers? liability insurance for people such as cleaners or gardeners if they work for more than one person, nor are you likely to need it if you employ a childminder. However, if you employ someone who works only for you, you may be required to take out insurance to protect them." which is why I also linked to nannytax on the other thread. Unlike a cleaner or gardener the au pair works only for you. Nannytax advises that all employers take out liability insurance.

Honestly the best thing to do is to call up your household insurance provider and check a) whether it's included and b) if it's not whether you can add it on.

The only foolproof way would be to check relevant case law to see how this has been applied to domestic employees in the past.

Okey dokes for all of you out there....

I called up the HSE who wrote the above linked document and they told me categorically that you DO NOT need employers liability insurance for au pairs.

He did say that your household insurance would cover what you need for an AP.

I would still advise anyone to check that their insurance would pay out if the au pair injured themselves while carrying out their duties.

Household contents insurance often includes employers liability for domestic staff. Though someone posted last week (or the week before) having found that their CoOp insurance doesn't include it.

All contents insurance policies I expect would include provision to cover guests/visitors but in the event of a claim, is an au-pair considered to be a guest/visitor or a employee?

This is only really a problem if the household policy does not cover both guests and domestic employees.

NewTeacher - does your household contents insurance not include employers liability for a domestic employee? If so, who is the insurer. CoOp?

Nannynick - I've never even thought about any kind of insurance re: an AP hence this is all news to me.

I will check my household insurance today though.

Just looked at mine and I have £10,000,000 employers liability for domestic staff cover, even though I don't have any staff. It was just automatically included when I choose to have Contents insurance.

NewTeacher I am afraid that whoever you spoke to at the HSE was wrong on both counts.

Au pairs are employees, and you are their employer: you must therefore have employers liability insurance.

Some household insurance includes cover for domestic employees, but some insurers don't (as noted in this thread, the CoOp is one that doesn't). Check your policy document (for instance it is on p.34 of the [[http://www.directline.com/home/home-insurance-policy-hm137.pdf Direct Line policy) or call your insurer.

Let's try that link again: Direct Line policy

I checked with HSE too before employing a nanny 4 years ago and you do NOT need specific employer liability insurance if employing a part-time nanny/au pair. The cover provided by house hold insurance is sufficient, obviously if your household insurance doesn't cover you for domestic staff, you just need to change policies to a different insurance provider.

HSE probably meant that household insurance would be sufficient rather than a need to have a dedicated policy.
Problem is, these days it can be an optional extra on a policy or not available at all from some insurers.

MrAnchovy

The HSE guy was right he said I dont need to get the Employers Liability Insurance cover that companies and businesses use and that, what was provided on my household insurance was enough. How are you so sure he is incorrect? I would expect they know their job!

I have checked my household insurance and I have £10,000,000 cover which is called Employers Liability. So yes is all a bit odd, with terminology that I dont quite get as in is an AP an employee or not! But that opens another can of worms as Ap agencies will say that they are not, but the opinion on mumsnet seems to be that they are.

Thanks for all your help!

Well then you do have Employer's Liability, it just happens to come as part of your household insurance and you don't need specialist employer's liability. The HSE are both right and wrong. They are right that you don't need a specialist policy as your household insurance covers you and they are right that the level of cover found under a standard household insurance covers you. They are wrong that you don't need any form of it at all and they are wrong that your household cover will automatically have this.

However, some household policies do not have this anymore so it's worth checking. The Co-op is one and does not provide it at all, even as an optional extra. There are probably others who don't include it as standard but will update a policy to include it. Therefore anyone with an au pair (or other domestic employee) should check that their personal household insurance does have that cover. If they do not then they need to either change their household insurance to one which does or take out a specialist policy.

Au pairs are employees. The ECJ ruling on the Payir case made that very clear and ACAS agree.

when did the HSE say I didnt need any form of insurance?

They said my household insurance should cover it.

"I called up the HSE who wrote the above linked document and they told me categorically that you DO NOT need employers liability insurance for au pairs."

That to me is a pretty clear cut statement. You may not have been quoting verbatim but the risk is anyone reading this thread will get to that post, stop and go 'okay, no need to go further - employer's liability not required at all'. It implies that you don't need any form of employer's liability insurance when, in fact, you do.

"He did say that your household insurance would cover what you need for an AP."

Would is again a pretty definitive statement but the point which has been repeatedly made on this thread is that not all insurers still offer this as standard under a household policy so anyone with an au pair should check that they do in fact have it. The subject came up a few days ago.

At the end of the day employer's liability is employer's liability no matter how you get it and as long as it covers your needs then it's all good. IMO the HSE are wrong to definitively say on the basis of a phone call that you do not need to it and your household insurance will cover you as it may not. Therefore you were given inaccurate advice. You do need some form of employer's liability, not necessarily a specialist policy, and you need to verify that your household insurance does have it. Taking the word of the HSE that your individual insurance will cover you isn't a good idea, but in your case you've sensibly verified your level of cover and it's okay, unlike thehiddenpaw who wasn't okay.

Of course they may have phrased it more carefully to say that it's unlikely you need to take out a specialist insurance policy, you almost certainly don't need the same level of cover as a large business and your home insurance will probably include it but that's a level of epistemic modality missing from what you posted which makes a big difference.

having been mentioned here and noting all of you checking your policies and confirming you are covered, would you care to mention who you are with as am busy policy shopping at the moment! (from the one who has co op insurance and is NOT covered)

LloydsTSB

Currently Hiscox, previously Direct Line and others before that. Might be easier to ask if anyone has heard of anyone except the CoOp that doesn't provide it.

Thanks have till friday to sort and at leaat have few names now