Privately Hiring and Paying a Caregiver
The population of California includes many people who, because of advanced age, injury, illness or disabilities, hire a caregiver to provide home care and support services. These service companies provide a wide variety of critical, but non-medical, assistance that helps improve the daily lives of the individuals receiving these services. Home care and support services include assistance with both Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). ADLs include assisting consumers with dressing, bathing, ambulation, personal hygiene and medication reminders. IADLs include assistance with the use of a telephone, shopping, food preparation, housekeeping, laundry, and use of public transportation.
When the need arises for a caregiver to assist in the home with ADL’s, consumers are often at a loss of how to fill that need. All too often they know someone that can help and won’t charge them very much. It is vital that consumers understand the liabilities and legalities of employing a caregiver.
Options for Hiring a Caregiver
The best option is to employ a home care agency that uses the “caregiver as their employee” model. Beginning January 2016 these agencies must be licensed by the State in order to be in business. The agencies must meet state requirements for protecting the consumer from liabilities. In addition, they must provide certified employee caregivers.
You can also hire privately from a domestic worker placement/staffing agency. Note: these are not home care agencies licensed by the State. When hiring a caregiver using this method, there are no safeguards to protect the consumer. It is critical consumers fully understand the legal and liability costs associated with the consumer becoming an employer.
According to the IRS and Labor Department, if you hire a caregiver privately, you are their employer regardless of any written contract with the private caregiver or staffing agency. This is the law. You are responsible for reporting to the State and IRS and must provide caregivers with workers’ comp insurance. Anyone who fails, either knowingly or not, to comply with these laws and regulations is subject to tax audits, costly statutory penalties and litigation.
It is not okay to pay caregivers “under the table.” This is against the law! If caught, your problems are significant including mandatory payment of all unpaid payroll taxes with interest, late fees and criminal penalties including possible jail time.
If a caregiver paid under the table reports their wages, tries to collect Social Security, files unemployment, workers’ compensation, or disability insurance claims, they will identify you as their current or former employer. This will trigger Federal and State tax audits for not reporting wages paid.
The IRS publishes case after case of prosecutions for employment tax fraud. Don’t be one of their statistics. When hiring a caregiver, protect yourself and your loved-ones. Hire through a licensed Home Care Agency so your caregiver is a certified employee of the agency.
For additional information contact the American Board of Home Care at http://www.americanboardofhomecare.org an employment attorney, or review the attached document from the American Board of Home Care.http://www.allwayshomecare.org/privately-hiring-and-paying-a-caregiver/Caregiver TrainingHome Care Basics