In my interaction with some excellent care managers, they shared some recent situations where the care managers were included in a labor lawsuit as a joint employer by the privately hired caregivers.  It appeared to me that similar risks are not often understood correctly.  That was the inspiration behind writing this blog. 

When a family member is trying to coordinate senior home care services for an elderly loved one, the services of a fiduciary or a care manager can be an excellent resource.

Care managers provide a client-centered approach to caring for older adults or others facing ongoing health challenges.  Their guidance helps families by providing information about the different eldercare options and services that ensure quality care and an optimal life for older adults.

Likewise, fiduciaries are often hired by the families to provide oversight to the estate of the older adult. Very often the fiduciaries bring in care managers and home care agencies when the health of the older adult deserves more care options.

“Recommending a private caregiver or an independent caregiver rather than a licensed home care agency could have risky financial implications.”

However, as a care manager or fiduciary, recommending a private caregiver or an independent caregiver rather than a licensed home care agency could have risky financial implications for all parties involved.

Care Managers and Fiduciaries

Care managers & fiduciaries are experts with respect to the services available, the quality of those services, and the costs of the different service providers. Much like a financial advisor that helps clients wisely invest their money, a care manager or the fiduciary educates elders and their families about senior care options that monetarily make the most sense.

In this process, it is very tempting to recommend hiring the caregivers privately to minimize the cost of care. Granted, today there are options where the family can use the services of a payroll company to handle the payroll for the caregivers.  However, in doing so, they may be inadvertently taking on the role of co-employers along with the family in the eyes of the State of California.

Private Caregivers Typically Charge Less

As a care manager or the fiduciary, let’s say that you are helping a client find their mother a caregiver to assist with activities of daily living (ADLs) like bathing, toileting, and dressing.

A private caregiver may only charge $15-$20 an hour for those services, while a home care agency might bill the family at $25-$30 per hour. If that caregiver is in the home an average of four hours per day or more, those cost savings can seemingly add up.

All things being equal – for example, quality of care – on the surface an independent caregiver might seem like the most frugal option. However, and notably in a state like California, the perceived cost savings may not outweigh the risks when it comes to financial liability.

Even if the family understands the risks involved and is still willing to move forward, as the care manager or fiduciary, you may be opening yourself up to more risk than you realize. You may be seen as the co-employer.

Beware of State and Federal Employment Laws

Although it’s true that most private caregivers charge less than a senior care company, federal and California employment laws often classify private caregivers as employees rather than independent contractors.

As such, the care recipient, their family, and even their care manager could face legal obligations resulting from the employer/employee relationship, along with liability under the law in the form of taxes, interest, and penalties.

Employer-Employee Relationship

In California, anyone who serves as a home health aide (HHA) is likely to be classified as an employee because of who controls the work environment, caregiver’s schedule, and rate of pay. Under both state and federal law, an employment relationship is established when the family or fiduciary has control, or the right to control, the job responsibilities that the caregiver must perform and how those responsibilities are performed.

Here are some questions you should ask yourself when determining whether or not you may actually be in an employer-employee relationship:

  1. Instructions. Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker.)
  2. Training. Do you train the worker to do the job in a particular way? (Independent contractors are already trained.)
  3. Services rendered personally. Must the worker provide the services personally, as opposed to delegating tasks to someone else? (This indicates that you are interested in the methods employed, and not just the results.)
  4. Work hours. Do you set the worker’s hours? (Independent contractors are masters of their own time.)
  5. Reports. Must the worker give you reports accounting for his or her actions? (This may show a lack of independence)
  6. Tools and materials. Do you provide the worker with equipment, tools, or materials? (Independent contractors generally supply the materials for the job and use their own tools and equipment.)
  7. Right to fire. Can you fire the worker? (An independent contractor can’t be fired without subjecting you to the risk of breach of contract lawsuit.)

If the answer to any of these questions is yes, you may be considered an employer or co-employer in the State of California. The California Supreme Court set out the factors that can create a joint employer relationship in Martinez v. Combs.  Under this test, to “employ” means (1) “to exercise control over… wages, hours or working conditions,” (2) “to suffer or permit to work,” or (3) “to engage, thereby creating a common law employment relationship.”  The court in Ochoa v. McDonald’s Corp explained that “[a]ny of the three is sufficient to create an employment relationship.” (Understanding joint employer liability | California Employment Law Report).

No good deed goes unpunished. Care Managers and Fiduciaries may actually be trying to help their clients. Their work requires them to be very involved in the process. However, these may lead to unexpected situations. It would be best to consult with an employment attorney to understand the exposure, if any, as a joint employer. In the meantime, it is always safer to use the services of an agency that hires and retains the caregivers complying with all legal requirements.

The Benefits of Recommending a Home Care Agency

Under California’s Home Care Services Consumer Protection Act, all home care agencies must be licensed by the California Department of Social Services.

As a care manager, fiduciary, or other professional assisting an elderly client, you won’t have to worry about being classified as an employer. The agency in this case is the one who manages the caregivers, trains them, and supports them with their everyday work. If there are any situations at the workplace, the agency takes ownership of such situations, without the care manager or the fiduciary having to get involved.

The care manager or the fiduciary works through the agency, in this case, thereby avoiding the co-employer situation. With an agency, if the caregiver is not a good fit with one client, they are able to find alternate assignments for the caregiver where they are a better fit. This provides continuity of employment to the caregivers.

Hassle-Free Home Care for Seniors in Southern California

At New Wave Home Care, we’ve been working along with care managers and fiduciaries in Southern California to keep aging seniors safe and comfortable in their own homes for 11+ years now. As a licensed home care provider, we support clients and their families with personalized in-home solutions like personal care, transitional care, respite care, dementia and Alzheimer’s care, and hospice support.

When you choose to work with New Wave Home Care of Pasadena, you can rest assured that your client is getting the specialized care they need from a trusted, friendly caregiver. To learn more now or to schedule a FREE in-home assessment for a senior in the greater Los Angeles area please visit us at www.newwavehomecare.com.