Hiring a caregiver for hourly, daily, or around–the-clock assistance is often all the support a person needs to stay in their home. Services can include companionship, help with bathing, dressing, household chores, cooking, banking, shopping, and running errands, to name a few. Some people like to pay a friend or neighbor for light care, house keeping or errands, but be warned, there are many pitfalls of that arrangement.
There are many legal issues to consider if you become the direct employer. According to IRS.gov, special rules apply to workers who perform in-home services for elderly or disabled individuals. Non-agency, directly hired caregivers are employees of the individuals for whom they provide services because they work in the homes of elderly or disabled individuals and take direction from the care receivers or their advocates. These caregivers are not categorized as independent contractors. You will need to provide them with worker’s comp insurance, withhold their federal taxes, preform back ground checks and will have a host of other employer responsibilities.
Hiring a neighbor or friend may sound good, but it’s not necessarily easy, or safe.
Benefits of working with an Agency
- Screening, hiring/firing, pay and taxes are handled by the agency. Agencies handle all the paperwork, insurance, taxes, social security, etc. for your caregiver. You are responsible for these things if you hire a home care worker on your own.
- Ongoing training regarding infection control, food safety, body movements, best practices of care and much more.
- Professional supervision to adhere to patient’s plan of care.
- If the worker is sick, an agency will send a substitute to ensure your care needs are met.
- Agencies provide individuals with a variety of skills to meet varying needs (e.g., skilled nursing care, physical therapy, occupational therapy etc.)
- May be partially covered by Medicaid or private insurance
Hiring Directly– Employer’s Responsibilities:
Hiring a caregiver to work in your home makes you the Employer of a “household employee.” There are several legal considerations to this arrangement. First, household employers should verify that their household insurance (renter’s or homeowner’s) covers household employees in case of an accident. It is also imperative that the employer be fully informed of the legal responsibility of paying taxes for household employees.
As the employer, you may also be responsible for withholding Social Security taxes, Medicare taxes and/or federal unemployment tax and filing them with the Internal Revenue Service annually or quarterly. Social Security taxes are owed by both the employer and the employee. Rules governing the amount(s) to be withheld and payment schedules can change annually. For information on paying federal taxes for household employees, call (800) TAX-FORM and ask for Publication 926 or view it on the web at www.irs.gov/formspubs/index.html [Scroll down to publication number 926.].
Patients and families need to be aware of the responsibilities when hiring someone. If you aren’t up to doing the record keeping required, talk with your local Area Agency on Aging about your community’s options.
There are also state regulations. Some states require that employers pay state tax and/or state disability insurance. To find out the regulations in your state, call the state employment department. The penalties for not paying taxes on household employees include paying the back taxes and paying interest and penalty fines.
There is one other requirement that every employer should know. Each employee is required to fill out an Employment Eligibility Verification form I-9 and a record of this should be kept on file. This form verifies that the person is legally entitled to work in the United States. The form can be downloaded from the web at www.irs.gov/formspubs/index.html or ordered by calling (800) TAX-FORM.
FCA advises that household employers and employees stay informed and comply with state and federal tax laws. There are often local services available to seniors who need assistance in filing tax statements for household employees.
If you go to www.irs.gov, you can pull up Publication 926, Household Employer’s Tax Guide. This guide will tell you about what you are required to do when it comes to paying into Social Security and Medicare for the caregiver you hire and should answer most of your other questions, as well. You can learn more about these requirements on www.ssa.gov. Type in “household workers” and you’ll see a printable document that you can use for guidance. You also should check with the New Hampshire’s Department of Labor so that you know that you are complying with state as well as Federal law.
Making Your Home Care Situation Work
Regardless of how you find your caregiver, the relationships between the family, the person who requires assistance and the in-home worker are very important. It is important that you take the time to go carefully through the selection process, together. Good communication is essential for a good relationship. Be sure to schedule regular times to meet and discuss concerns, problems and/or changes. Your agency can help you make expectations clear and to provide adequate training to meet those expectations. If you hire a home care worker on your own, it is important you feel comfortable both providing training, and firing the worker, if necessary. If the person you have hired is doing a great job, be sure to tell him or her. A smile and well-deserved praise can make a big difference because everyone likes to feel that our work is appreciated.
The Caregiver Helpbook, Powerful Tools for Caregiving by Vicki L. Schmall, Ph.D., Marilyn Cleland, R.N., Marilynn Sturdevant, R.N., M.S.W., L.C.S.W., Powerful Tools for Caregivers
A program of Family Service Agency of Bucks County, Pennsylvania
(215) 355-6611 x 302
228 7th Street, SE
Washington, DC 20003
11 Beacon Street, Suite 910
Boston, MA 02108