Avoiding the Pitfalls of Hiring an In-Home Caregiver, Part 1
Hiring a home caregiver is a good option for many people who prefer to age in place in the comfort and familiar surroundings of their own home. Choosing the right person and company to provide the assistance should be pursued with great care and diligence, as there are some very important legal and safety issues to consider.
When you hire an independent contractor to work in your home you may be liable for their Taxes, Unemployment Compensation, and Worker’s Compensation-related Medical Costs and Lost Wages.
If the contractor has not paid their federal or state income taxes, you will be held liable by the government. Not only will you have to pay the taxes, you will have to pay the non-payment penalties and interest charges as well.
If a contractor is hurt while working in your home, you will be liable for paying medical bills and lost wages. And when this happens, it will trigger the government tax audits mentioned above.
When a contractor is fired or is no longer needed, you will have to pay their unemployment benefits. Again, this will trigger government tax audits.
The best way to protect yourself from these disastrous financial liabilities is to work with a company that employs the caregivers that work in your home (known as W2 employees). These companies will carry worker’s compensation insurance for their employees and all the required state, federal, and unemployment taxes are paid to the government.
Some home care companies may appear to follow the employment model, but are only referral services. They contract with individual non-employee caregivers (known as 1099 contractors) and do not carry workers compensation coverage or pay the required payroll taxes. When a worker’s compensation, unemployment, or tax issue occurs, you may still be left covering all the financial responsibilities.