When you need help caring for an elderly loved one in California, one of your options is hiring a professional in-home caregiver. Perhaps dad needs minimal assistance performing activities of daily living (ADLs), like bathing, dressing, or cooking. Or, mom might be living with advanced dementia caused by Alzheimer’s disease and needs more specialized care that only a paid caregiver can provide. Whatever your situation may be, here’s why hiring a home care agency could also be the right decision from a financial standpoint.
Understanding California Employment Laws
Although it’s true that most private caregivers charge less per hour than a home care agency, as a fiduciary there’s more to the story than merely upfront costs. Both federal and California employment laws treat private caregivers as employees of the elders they serve.
If that care recipient’s family ignores the various legal requirements created by the employer/employee relationship, either the elder or their beneficiaries may face liability when least expected. Under the law, tax authorities could possibly seek taxes, interest, and penalties.
Private Caregiver or Household Employee?
Most private in-home caregivers are compassionate professionals who provide reliable care so that elderly or disabled clients can remain safe and comfortable. However, if your family opts to hire a private caregiver over a home care agency, you must first determine whether that caregiver is classified as an employee or independent contractor.
In California, anyone who serves as a home health aide (HHA) is likely to be classified as an employee simply because the family 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 has control, or the right to control, the job responsibilities that the caregiver must perform and how those responsibilities are performed.
On the other hand, a self-employed caregiver classified as an independent contractor has the right to control his or her schedule, work environment, and rate of pay. Even if you or your loved one signs an agreement with said caregiver stipulating that they agree to work as an “independent contractor,” the court will look beyond written agreements to the circumstances of the relationship when determining the legal classification.
Quarterly Earnings Hold the Key
California’s Employment Development Department (EDD) has created an information sheet called Form DE 231L that outlines household employment reporting requirements. This form characterizes home health workers and family caretakers as employees and categorizes as “household employers” anyone “who has paid $750 or more in cash wages (including checks) to one or more household workers in a calendar quarter.”
For example, if mom is paying a private caregiver four or more hours per week at a rate of $20 per hour, she will easily meet the $750 per quarter threshold and be classified as a household employer.
California Legal Requirements for Household Employers
Once the quarterly wage threshold is met, families face several requirements under California employment law. For starters, you must withhold State Disability Insurance (SDI) from the wages paid out and remit the withheld money to the EDD. If you pay over $1,000 in wages during a quarter, you must also remit Employment Training Tax and Unemployment Insurance payments to the EDD.
Under federal law, you may also be required to withhold or pay Social Security and Medicare taxes, pay federal unemployment tax, or both. A failure to comply with all these legal requirements could result in fines and other penalties under state and federal law.
The Benefits of Hiring 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. For one, you won’t have to worry about being classified as a household employer when you contract with them for their services.
The law also requires all registered senior care companies to provide ongoing training to their staff and to conduct background checks on employees – giving you peace of mind that your loved one is always in good hands!
Licensed In-Home Care for Families in Southern California
At New Wave Home Care, we’ve been helping families in Southern California keep aging loved ones safe and comfortable in their own homes for over 10 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 New Wave Home Care of Pasadena, you can rest assured that your loved one 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 Pasadena area please visit us at www.newwavehomecare.com.
