Home health care aide

[mollyanna58]

My parents currently have a live-in aide through a home health care agency.  We are looking to hire someone directly in the near future.  We interviewed one person who wants to be paid cash.

What are our responsibilities for taxes including social security?  Are they different if we have a contract that calls her an independent contractor, and we file a 1099 at year end?

[The Captain]

I think this article sums it up pretty well:

www.care.com/a/whats-wrong-with-hiring-my-senior-caregiver-as-an-independent-contractor-1301210113

Why Isn't My Senior Caregiver an Independent Contractor?
Your caregiver is not an independent contractor because she follows instructions on how to care for your loved one. If your senior caregiver worked as an independent contractor, she would make all the decisions about bathing, medication and different exercises to do with your loved one without consulting you, your loved one or the doctor first. She would also be responsible for providing supplies, instead of using yours. Also, your caregiver works a regular schedule and is expected to take care of your parent or relative during the times you have specified. If she was an independent contractor, it wouldn't matter when she worked, just as long as the job was completed by a certain deadline

I know it's tempting to try to treat them as an independent contractor to save money (ie - the taxes) but you could run into trouble more than one way.

1.  If they don't pay their proper taxes the IRS can come after the employer (you).
2.  In some states they are entitled to benefits and other employee protections - are you familiar with those?
3.  I'd check with your insurance agent about making sure your are properly insured (get an umbrella policy).

If you do handle the taxes correctly you'd likely be on a quarterly deposit schedule and would have to withhold Federal and State income, Social Security, and I'm pretty sure unemployment taxes as well.

Finally, if they don't work out you'd be in the position of trying to find someone again on your own vs getting a quick replacement from an agency.

We used an agency with my mom and grandma.  I'm glad we did.  The personnel management was taken care of and we didn't have to deal with individual drama if someone couldn't make it (the agency just sent another equally qualified person).

Just my two cents worth.

[mollyanna58]

Thanks for the response; that's kind of what I figured. 

The agency we have been using does not cover the geographic area they are moving to.  It's a franchise and they can't overlap another franchisee's territory.  However the main reason we are looking to change is because we want someone with a drivers license.  Most of the agency's live-ins are immigrants who do not drive.  It would be nice if someone else could drive them to their many doctor's appointments.  I drove my father to one recently and it took 5 hours out of my work day. 

NJ Homeowners policies include Workers Comp for occasional employees, and a full-time person can be added for $60.00.

[The Captain]

mollyanna58 - from your last sentence I'm assuming they will live in NJ.  If the area is densely populated (like where I live) there may be Senior services that will drive to/from Dr.'s appts.

Google your county/city "Agency on Aging".  Hopefully you will get something like this site:

www.ageguide.org/assistance.html

They have similar services where my Dad lives and it's much less populated.  He goes to the Dining centers not because he can't afford to eat out, but because he likes the social aspect.  It's lunch three days a week.  Donations are accepted but not required and Dad pops in $5 a day and brings a dessert.

Good luck to you.

[mollyanna58]

The Captain Thank you for the suggestion.  I know their former next door neighbor relied on a county service for transportation to the area hospital for physical therapy. He said there was a lot of "hurry up and wait" involved, and my mother is such a royal PITA about anything that is inconvenient to her.  Inconvenience to her children is irrelevant. 

But I will check out what's available, because something has to change.   

[TheOtherMe]

People that work in your home are not independent contractors.  They are employees and you are responsible for their employment taxes. 

Link to Publication on household employees.  www.irs.gov/publications/p926/ar02.html

[Deleted]

People are correct on the law, but unfortunately you are going to have a hard time finding help that follows the law.

For my grandma, my Aunt had to get cash and pay them under the table.  She just couldn't find people willing to work above the table.  It is a huge problem in that industry and why many get into it.  

The one's that my grandma felt comfortable with, were recommended, etc. all required payment under the table.  See most also were collecting SS, SSD, had subsidized housing, illegal preferences (considered discrimination in legit businesses), lacked licenses, etc.  

Agencies or those that work legally, all refused things that were important to my grandma and the family agreed.  See you can't discriminate based on sex of the worker, so an agency would not guarantee that all workers would be female.  Sorry, but I can understand why my grandma, that needed help using the restroom wanted only females helping her and staying overnight with her in her home.

It was an odd network of workers that when under the table could provide any service needed.  If it was above the table then you couldn't find anyone interested or willing (not really a price thing until you got completely absurd, like over $100K/yr).  Most people don't realize that you can't give medications (while getting paid) unless you are a licensed nurse (at least in the state my grandma lived).  So even reminding her to take her medicine, bringing it to her or getting her a glass of water could be considered administering.  Most nurses don't want to sit with one old lady for 8 hours, so you get people that can't pass the nursing test.  Most workers don't want to go to jail over illegally providing medicine when an old person dies.  But if all under the table they are simply a friend and good Samaritan laws protect them for any reason of misconduct (i.e. elderly person falls, takes incorrect medicine, etc).  See a Nurse making a mistake can have criminal charges, a good Samaritan is protected from almost everything both in civil (dollar issue) and criminal.

This was the reason for cash, no paperwork, no trace ability.  If they had to call 911 it was clear they would tell everyone they were just a friend helping out.  

Good luck with your search, but I'm afraid you will find it hard as how can someone being clearly so avoiding all laws be someone you trust with your loved one, but as with many laws, they create the very problem they are intended to prevent.

[Wisconsin Beth]

FYI.

www.scotusblog.com/2015/10/new-home-care-worker-pay-rules-cleared/

New home-care worker pay rules cleared

Chief Justice John G. Roberts, Jr., on Tuesday afternoon cleared the way for home-care workers who are hired by businesses to be eligible for minimum wages and overtime pay, beginning next Tuesday. The Chief Justice signed a simple order, without explanation, denying a request by three home-care industry groups for a delay of new Labor Department rules. He acted alone and without seeking a reaction from the department.

Last month, the industry groups, arguing that the new rules would lead to the loss of home care for millions of elderly and disabled individuals, sought a delay until they could file a challenge to a decision by the U.S. Court of Appeals for the District of Columbia Circuit, upholding the rules.

For decades, the Labor Department had followed a policy that home-care workers were not eligible for minimum wage and overtime pay provisions of federal law. Two years ago, it changed its mind, concluding that the home-care industry had changed markedly, with fewer patients being treated in nursing homes and hospitals and more receiving care at home.

The new rules do not apply to home-care workers who are hired directly by patients or their families, but only to those who are employed through businesses. The rules will go into effect when the D.C. Circuit issues the formal order implementing its August 21 decision. The industry groups filed their postponement request with Roberts because he handles emergency filings from the D.C. Circuit.

The Chief Justice’s order simply turned down a request to postpone the implementation of the rules. The industry groups had said they would be filing a full appeal to challenge the changes. The Chief Justice’s order does not necessarily mean that such an appeal, if it is now filed, would be turned away, but one of the factors in deciding for or against a delay of a lower court order is whether the Supreme Court is likely to take on the issue.

[mollyanna58]

Oct 7, 2015 7:22:55 GMT -5 Wisconsin Beth said:

FYI.

www.scotusblog.com/2015/10/new-home-care-worker-pay-rules-cleared/

New home-care worker pay rules cleared

 .

Interesting.  I wondered about that.  We are currently paying the agency $220.00 daily for a live-in.  That's less than $10.00 an hour to the service; I don't know how much the actual aides are paid.   If we wanted someone who lived out, it's $22.00 per hour.  I guess those fees will probably be going up due to these new rules. 

It's hard to decide what is best.  A live-in who drives and can take them to doctors appointments seems like a good idea.  OTOH, an aide can't be an advocate on medical issues; so a family member might have to keep going anyway.