As you get older, you may (someday) need help with your everyday activities. For some, that means going to a nursing home. But most people want to stay home, so you might think about hiring an at-home caregiver. You need to consider some important employment issues before you do.
There are two major options when getting an at-home caregiver. You can either go through a home health agency, or you can hire a person directly. Going through an agency means you are paying the agency for them to provide caregivers. Doing it on your own means you have to find the caregiver and hire that person directly.
When you go through a home health agency, the agency is the employer, so you won’t have to worry about employer issues such as tax and liability. The agency will take care of screening the employees, doing background checks, and providing insurance. The agency will schedule your caregivers, and should send a replacement if a regular caregiver is not available.
Make sure you check on the coverage quality of your chosen agency. The best agencies will have someone there when scheduled almost all of the time. If you need care, you don’t want gaps in your schedule. Good agencies will ensure this doesn’t happen.
One drawback to using an agency is that over time you may get many caregivers. You might be receiving quite personal care and would want to be familiar with your caregivers. Many people prefer to have only one or two different caregivers. Most agencies will work on continuity, but may have to fill sick-calls with someone that you don’t know.
If you don’t use an agency, then you will have to hire a caregiver directly. This can be less costly, but it puts all of the burden on you. You have to search for a caregiver, interview and screen the person, and then hire and pay them directly. You will have to consider all of the tax and liability issues, including payroll, taxes and verification of eligibility to work in the United States (immigration issues).
Many people think they can hire an aide as an independent contractor and pay the aide without withholding taxes. This is rarely true. Federal and State governments have rules and regulations regarding employees and independent contractors. It is highly unlikely that an at-home caregiver will qualify to be an independent contractor. For the most part your caregiver will be an employee and you will probably need a payroll service to help you with income-tax and Medicare withholding and the filing of employer tax forms. You will also need to get Worker’s Compensation insurance.
The penalties for improperly categorizing an employee can be severe, so it’s really not a good idea to risk it. The penalties for failing to withhold and pay income-taxes can be 100% of the amount that should have been paid. If a person who was misclassified as an independent contractor gets hurt on the job (which is likely with caregivers who assist with lifting and bathing) and there is no worker’s compensation insurance, you can be forced to pay all of the medical expenses. This can be tens or hundreds of thousands of dollars. Other agencies such as the Division of Unemployment may also issues fines and penalties for misclassifying workers.
You might find that there are various social service agencies in your area that can act as the “employer of record” for an at-home caregiver that you select. You might have to search to find an agency that will do it, but they are around. With this system you can pick your own caregiver (maybe even a family member) and avoid all of the employer problems, for a small additional fee to the agency.
Receiving care at home is often preferred to care in a facility. You can hire at-home caregivers, but you must ensure that you follow the rules so you don’t get into trouble. Seek the advice of an elder law attorney and accountant, or go through a licensed agency that will take care of those issues for you. Then, you can concentrate on living and not on dealing with caregivers.