If You Have Employed a Caregiver
If you have employed a home health caregiver, you must know whether you are the caregiver’s employer or someone else (i.e. the agency). If you have independently hired a caregiver without going through the agency, then you are, indeed, the employer.
If, on the other hand, you have used an agency, you must inquire as to how the caregiver receives pay and how taxes are paid. We’ve all read about the “nanny tax” in the United States and it’s serious business. Due to the increase in the in-home care industry, you need to be wise and ask questions up front, so the government doesn’t come after you. You must find out what, if any, tax obligation you have and what insurance coverage you need in order to protect yourself when hiring outside caregivers and other professionals in the home care industry.
Many nurse registries and employment agencies don’t actually employ or even supervise their workers. They simply act as a placement agency. If this is the case, the family who hires the worker is responsible for paying the salary, payment of taxes, (including workman’s compensation and Social Security, if the pay exceeds $1,700 for the year) working conditions, and other obligations. Employing a friend ,puts the family in the same situation.
This is nothing to take lightly nor can it be ignored. Ignorance of the law is not an excuse. If you pay the caregiver wages of more than $1,000 in any quarter, federal unemployment taxes must also be paid. State and unemployment taxes must be withheld and paid as well. If the taxes are unpaid, the taxpayer must pay what’s owed, and will face late filing penalties of between 5% and 25% of the underpayment plus interest. You must make arrangements to withold taxes as part of the employment negotiation. Let your employee know that you will be taking witholding taxes from the pay check.
You can easily avoid the hassle of dealing with taxes if you pay an agency directly. Make sure you are hiring in home health professionals from an agency that is licensed and bonded and feel free to ask how payment is made to the caregiver and how taxes are handled.
You should also make sure that the agency you have selected verifies the legal status of all of their employees. The idea here is to make your life easier, not more difficult. If you have any doubts about the legal status on an employee, ask to see the United States Employment Eligibility Verification form – I-9. It must be completed and kept on file.
One of the biggest financial risks for any family is an employee injury. Make certain that the agency you have hired provides worker’s compensation insurance for their employees. If they do not, then the family becomes liable should anything happen to the employee. Check with the agency and contact your home owner’s insurance company to learn about ways you can protect your family a possible lawsuit. It might be a very good idea to purchase general liability insurance. There is also discrimination and harrassment suits from caregivers which pose another issue for the family. You want to be as insulated as possible. Contact your insurance company and ask about an umbrella policy with a discrimination rider. Depending upon your family’s situation, these added riders can be very beneficial if something happens. However, they are also expensive. In the end, it is always best to hire in home health professionals from a reputable, licensed and bonded agency.
