Who is the employer of the caregiver supporting your mother’s, father’s or your activities of daily living (ADLs)?
This is a subject that just keeps coming up, because it continues to cause so many issues for families. In the State of California, the law is actually quite simple about who is the employer of a caregiver or other household employee, but unscrupulous referral agencies try to avoid providing clients with information about the issue. Some even intentionally — well, I cannot find a polite word, but …
First, let’s make our position clear. The employer of Home Care Aides / caregivers should be the agency that is sending them to the home. For us, at Support For Home, that is the case. We are the employer. We provide liability insurance and bonding, pay payroll taxes, Workers Comp insurance, background screening, and so forth. There are a number of other reputable agencies who are doing the same (check out the members of the National Private Duty Association – NPDA). Unfortunately, many referral agencies (sometimes called DRAs) operate very, very differently.
These folks simply will not raise the issue of who is the employer — too often, it is going to be the client and / or the client’s family or trustee. Then, if something happens (the caregiver trips over an ottoman or is let go or commits a dishonest act, …) the client is left holding the bag — with the State of California wanting the bag to be filled up with taxes and fines and handed over. We are even aware of a situation where a referral agency showed the prospective client the agency’s Workers Comp certificate — which turned out to cover only the administrative staff, not caregivers!
One very good document on this subject from the Employment Development Department (EDD) is called “Household Employment.” This talks about the client’s / family’s responsibilities when hiring an “independent contractor” from a DRA. Basically, the referral agency is off the hook, if they follow a simple set of rules, and the client is on that same hook.
The discussion starts with some definitions:
- Who is a Household Employer?A household employer is someone who has paid $750 in cash wages to one or more individuals in a calendar quarter to household workers. You must register with EDD within 15 days after you pay $750 in total cash wages.
- What Are Wages?Wages are all payments made to employees for personal services, whether paid by check, cash, or the reasonable cash value of noncash payments, such as meals and lodging.
So, becoming the employer of your — or your family member’s — caregiver is pretty easy. Operating in that role, following all the rules of an employer, understanding the financial implications … That’s not nearly as easy. That does not mean that being the employer is always the wrong answer. It just means when you are making the hardest decision families make — about who is going to provide home care — it needs to be an important factor.
Best wishes — and happy decision making. Bert
By Bert Cave