Council on Aging Answers 2016 - 38

Privately Hiring and
Paying a Caregiver

HEALTHCARE

COUNCIL ON AGING - ORANGE COUNTY

What Consumers
Need to Know
California's most vulnerable population are those
who, because of advanced age, injury, illness or
disabilities, rely on caregivers to provide home care
and support services. Caregiving companies provide
a wide variety of critical, but non-medical, assistance
to improve the quality of life and daily lives of the
individuals receiving these services. Home care and
support services include both Activities of Daily
Living (ADLs) and Instrumental Activities of Daily
Living (IADLs). Assistance with ADLs includes, but
is not limited to, 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 as a caregiver 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 of California 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: they are not a home
care agency licensed by the State). You can also employ
a caregiver from a friend or referral. When hiring a
38

Answers Guide 2016

caregiver from either of
these options, there are
no safeguards to protect
the consumer. It is
critical consumers fully
understand the legal and
liability costs associated
with 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' compensation 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." It 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
those wages, tries to collect Social Security, file
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 failing to report 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 that
provides certified employee caregivers.
For additional information contact the American
Board of Home Care at (877) 436-5259 or visit www.
americanboardofhomecare.org

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