What policies do you need to have in place for your domestic worker?

If you are thinking of hiring a domestic worker, there are certain aspects you will need to consider before making the final decision. One of these aspects is the fact that they will need to have policies in place in order to protect themselves and their family while in your employ.

Your domestic worker may be taking certain risks while working for you, such as travelling a long distance in order to come to your home, and they work with harmful chemicals on a daily basis. It is vital that you ensure you have policies in place to cover these issues, both for their safety and for your own legal benefit.

What policies will a domestic worker need?

Your domestic worker will most likely need to have both life insurance and funeral cover in place, which is explained below, along with any additional policies you may possibly need.

Life insurance

Life insurance is important for anyone to have, even more so if your domestic worker is the sole breadwinner of his or her family. Life insurance will provide your domestic worker’s family with a payout upon their death, which will allow them to pay for expenses and bills after their loved one has passed away.

Life insurance can also be used for any debts your domestic worker has outstanding, relieving their family’s stress during this difficult time. Companies such as AUL provide affordable life insurance for low-income earners and are good options to look into if you are considering hiring a domestic worker who does not already have life insurance.

Medical cover

Many medical covers or medical aid plans cost more than the average salary of a domestic worker. However, there are some who provide plans for those earning a lower income and while they may not cover hospitalisation at a private hospital, they will provide help in a medical crisis.

Some banks and financial institutions have specific packages for domestic workers, with some costing as little as R238 per year and covering your employee for network GP visits, pathology, radiology, pregnancy scans and antiretroviral treatment. If this is too expensive for your domestic worker to pay for on their own, you could offer to pay half as part of an employee benefits package.

Hospital cash-back plan

This is not to be confused with a medical aid package. A hospital cash-back plan provides cash back for each day that the policyholder spends in hospital. This will help the family of your domestic worker immensely, as they will be able to function normally without having to worry about money, and can concentrate on supporting their ill family member.

There are numerous such products on the market, with entry-level plans being ideal for domestic workers who could lose their entire income if they should have to go to the hospital for an extended period of time. Their cover can also be used to pay for private care or treatment.

Funeral cover

With the passing of a loved one comes the planning of the funeral, which can be exorbitantly priced for those on a lower income. Some family members may have to borrow money to cover the costs, which causes them to incur further debt. This is why funeral cover for your domestic worker is so vital.

There are numerous policies geared toward lower-income households, some of which start at as little as R90 per month. With funeral cover, the expenses of the funeral are covered, and some plans offer help with money for daily groceries for up to a month and other benefits. Your domestic worker will be able to have a dignified funeral and their family will be taken care of during their grieving period.

Retirement plan

Low-income earning domestic workers are entitled to a government pension, but often this alone is not enough to live comfortably. You can help your domestic worker by signing them up for a provident fund, most importantly one aimed at low-earning individuals.

A provident fund is not a policy per se, meaning that it will pay out a lump sum invested plus returns on retirement once your domestic worker stops working for you. This will allow them and their family to live comfortably once the breadwinner is no longer able to bring in a paycheque.

What is the bottom line?

It is unlikely that you or your domestic worker will be able to afford the full range of policies and products mentioned above but if you and him or she go to a broker, they will better be able to discuss your options. Protecting your domestic worker allows them to protect their family, providing a better life for themselves and those they love.

Also view

New minimum wage rates for the Domestic Worker Sector effective from 1 January 2018.