If you or a loved one needs in-home help, you can either seek a caregiver through an agency, or hire one directly. Hiring through an agency involves less paperwork, but it is not the right solution for everyone. Agencies often charge more to cover their overhead and profits, so you may be able to hire a caregiver with a greater level of expertise for less, if you hire the person directly. They may also not send the same caregiver each day, depending on staffing and availability. If it is important to you to have one person continuously responsible for care, hiring help directly may be the best option.
If you choose to hire a caregiver yourself, there are some issues and requirements you need to consider.
The Level of Care Needed
If you need someone to help with chores and personal care, there is a Medi-Cal program called In-Home Supportive Services (IHSS). For low-income individuals who qualify for the program, Medi-Cal pays the caregiver (which can be a family member or friend) to provide assistance. The Veterans’ Aid & Attendance Pension program is also available to income-qualifying veterans who require in-home assistance. Again, the assistant may be a family member, although not a spouse. If you require more specialized assistance, Licensed Nursing Assistants, Certified Nursing Assistants, and others can provide greater levels of care, but will charge more per hour.
In-Home Health Providers Are Employees
Though different rules may apply if the caregiver is a family member, you must recognize hiring an in-home health provider who is not a member of your immediate family, the caregiver is your employee – not an independent contractor. This means complying with the laws and regulations (i.e. taxes, payment, and work hours). If you have never employed anyone before, we can help evaluate your unique situation and guide you through the necessary steps. But here is a summary of what is involved:
- Taxes: The first step is to obtain an Employer Identification Number (EIN) from the IRS. You must then issue paychecks that withhold federal and state taxes, including Social Security, Medicare, and state disability taxes. The best practice is to have your employee complete IRS Form W-4 and California Form DE 4 for tax withholdings, and then withhold taxes for them. If you do not withhold taxes, your caregiver may be hit with a large tax bill at the end of the year. At the beginning of each year, you must issue a W-2 reflecting the employee’s wages instead of a Form 1099. Also, you may be entitled to tax breaks that cover part of the cost of employing your caregiver.
- Insurance: You will need to buy workers’ compensation insurance. In California, it is mandatory for employers to have workers’ compensation coverage, even if they have only one employee.
- Minimum Wage and Overtime: Employing a caregiver means complying with federal and state labor laws regarding wages. First, employers must pay at least minimum wage for all time worked. California’s Minimum wage for 2018 is $10.50/hour if you employ 1-25 employees. However, counties and cities may have higher minimum wages. Also, if you hire through the IHSS program, there are separate minimum wage rates that apply to IHSS assistants. Also, depending on the number of hours you need your caregiver to work each day – and whether they will live with you or not – you may owe overtime. Assuming the caregiver is not a “live-in” assistant, he or she is entitled to overtime at 1.5x the regular rate of pay for hours worked of more than 9 in a day or 45 hours in a week.
- Days off: There are limits to the number of days in a row a caregiver can work. For example, live-in caregivers are entitled to 12 consecutive off-duty hours each day, and 3 hours’ total break time during a 12-hour shift. They are also entitled to 24 hours off duty after every 5 days of work, again, except in case of emergency. If an emergency occurs and the caregiver works a 6th or 7th day in a row, you may owe “double-time;” that is, 2x the caregiver’s regular hourly rate. Different rules apply to non-live-in caregivers, who as employees are ordinarily entitled to one day’s rest in seven.
- Meal and Rest Breaks: Non-live in caregivers are entitled to meal and rest breaks at certain intervals. Employees are entitled to an unpaid 30-minute, off-duty meal break for shifts over 5 hours, which must begin before the end of the 5th hour of work. Likewise, a second unpaid, 30-minute meal break is required for shifts over 10 hours. The employer and employee can agree to waive the first meal break if the shift is between 5-6 hours, or they can agree to waive the second meal break in shifts between 10-12 hours. The waiver should be in writing and signed by the employer and employee. Paid, off-duty, 10-minute rest breaks are due for every 4 hours or major fraction thereof, in shifts over 3.5 hours. These are not waivable.
- Wage Notice and Wage Statements: At the time your caregiver is hired, you will need to provide a notice disclosing information including pay rates, pay dates, your physical and mailing address(es) and other contact information, the name and contact information for your workers’ compensation insurance carrier, and sick leave information. Also, with each paycheck, you will need to provide a “wage statement” (more commonly called a “paystub”) with information about that paycheck and pay period. Wage statements must include gross wages earned, total hours worked, all deductions, net wages earned, the beginning and ending date of the pay period, the employee’s name and the last four digits of his or her social security number, and the employer’s name and address. The wage statement must also include the number of hours worked and the rate of pay that applies to the hours worked.
This is not a complete list of laws and regulations that apply to the employment of in-home caregivers, and different rules may apply to different situations. Our employment law experts can discuss your situation, advise you of the laws that will apply, and most importantly, help you understand and comply with them.
For more information, please feel free to contact us.
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