Question: Since my husband had a stroke a few months ago, I have been the primary caretaker for him at home. I am now looking to hire an in-home caregiver to help. I need someone to work about four to five hours every other day, maybe more, while I run some errands.

I have interviewed a few people, some independent caregivers who work for themselves and some others who work through an agency. The agency workers generally cost more per hour, so I am leaning toward a particular independent caregiver because she is less expensive. What do you advise?

Answer: Whether the person you hire is independent or part of an agency, you will want to go with the person who is the best fit. This person will be an integral part of your home, and you will trust this person with the care of your loved one.

Although you refer to the non-agency caregiver as an “independent caregiver,” that does not mean that she is legally defined as an “independent contractor.” Most likely, she is your employee, and the difference in meaning between these two terms affects the overall amount you pay.

When you pay an independent contractor, you pay them the agreed-upon amount and nothing more. Forty hours at $20 per hour will be $800. Nothing is withheld, and the contractor is responsible for paying his or her own taxes.

In the employer-employee relationship, however, the employer is required to withhold for the employee’s taxes, pay unemployment insurance to the state, cover the employer’s portion of the employee’s Medicare and Social Security taxes, and provide worker’s compensation insurance. Add to these costs the administrative cost of issuing a payroll check (estimated at $40 per pay period), and 40 hours at $20 per hour now means the employer is really paying $22.25 per hour — or even more.

Given the reduced burden of treating someone as an independent contractor, some people seek to engineer a solution by drawing up a contract that says that the person is an independent contractor and is required to pay his or her own taxes. Although the document may look like a good piece of evidence, it will not make the in-home care employee an “independent contractor.”

The actual circumstances surrounding the working relationship will determine who is an employee and who is an independent contractor, not a contract. An independent contractor exercises ultimate control over her work environment. She calls her shots, usually makes her own hours, and sometimes bring her own tools to the job. Think of the landscaper who visits the house every week or the pool maintenance person. They are independent contractors.

Very few in-home caregivers qualify as independent contractors because it will be you, as the well spouse, who will control what they do. You will dictate the hours and tell the caregiver what exactly needs to be done.

There may be some exceptions, but you should presume that the person you hire is actually your employee. Deeming someone as an independent contractor when the person is an employee may backfire.

For example, if your loved one passes away and the in-home caregiver files a claim for unemployment, you will receive a notice from the state for nonpayment of unemployment insurance. You do not want to receive a notice like that or a notice from the federal government seeking the payment of back taxes. That can be a shocking discovery. Better to be safe than sorry.

So on the issue of costs, you need to factor in the additional taxes and unemployment insurance that you will have to pay. After factoring the costs of your own employee, you may find that the caregiver agency is actually cheaper than the independent caregiver. Of course, you will want to verify that the agency has an employer-employee relationship and is not just acting as a middleman or a match service.

The other issues that you may want to consider include the additional protections that an agency may offer. For example, the agency may have other caregivers as a backup in the event your regular caregiver is unavailable. Most agencies also will run thorough background checks and are bonded and insured in the event that something happens.

Making a choice regarding a caregiver for a loved one is truly difficult, and cost is an important issue. But make sure that when it comes to cost, you are making accurate comparisons.


Preston Morgan is a partner at Kopper, Morgan & Dietrich, a Davis law firm providing family law, estate planning and trust litigation representation. His column is published every other week in the Davis Enterprise. To pose a question to Preston Morgan, contact him at https://kopperlaw.com.

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