Given the choice, most independent seniors in Philadelphia would prefer to remain at home for as long as possible. And although that’s an admirable goal, roughly two-thirds of all aging adults eventually need caregiving assistance to maintain their independence. When that time comes, families must make difficult decisions about their loved one’s care, including whether to hire a professional caregiver directly or go through an agency. What follows are some things you’ll need to know before making your decision.
Key Considerations When Hiring Independent Caregivers
Families often believe they will save money by hiring a caregiver directly versus working with an agency. While they may be quite capable of caring for your loved one, be sure to consider these factors first:
IRS rules for household employers
For federal tax purposes, someone is classified as your household employee if you dictate what work they perform in the home environment, and how that work is done. An independent caregiver is technically your household employee if they receive instructions on how to care for your loved one from you or another family member and you provide the equipment and supplies they need.
Conversely, self-employed individuals like independent contractors decide how they perform their work and furnish their own supplies and equipment. That said, most private-duty caregivers are not independent contractors. Be sure you understand the difference.
Employment eligibility verification requirements
Once you’ve determined that your private caregiver will be classified as a household employee, the next step is to verify they can legally work in the United States. That will require the two of you to fill out IRS Form I-9 (Employment Eligibility Verification) and produce documentation that proves their eligibility to work in the US.
Although the completed I-9 Form does not have to be formally filed with any US government agency, you, as their employer, must keep a copy for your records. You’ll also need to apply for an Employer Identification Number (EIN) and document your household employee’s Social Security number.
Tax obligations of a household employer
The federal and state tax amount that you must contribute for an independent caregiver who is a household employee will vary depending on which state you live in and how much you pay for their services.
For example, in California, a household employer is defined by the state’s Employment Development Department (EDD) as anyone “who has paid $750 or more in cash wages (checks and cash) to one or more household workers in a calendar quarter.” If you are paying a private caregiver $15 to $20 an hour, hitting that threshold won’t take long.
Once that threshold is met, by law you must withhold State Disability Insurance (SDI) from the wages paid out and remit the withheld money to the EDD. If you pay more than $1,000 in wages during a calendar quarter, you must also remit Unemployment Insurance and Employment Training Tax payments to the EDD.
With all these requirements, it’s vital to maintain detailed records related to your employee’s wages and taxes. Employment tax records must also be kept for at least four years after whichever is later, the due date of the tax return or the date when the taxes were paid.
Each time you pay the caregiver, be sure to record the date of the payment and itemize the following:
- Employee’s cash and non-cash wages
- Federal income tax withheld
- State employment tax withheld
- Social Security tax withheld or paid for your employee
- Medicare tax withheld or paid for your employee
Advantages of Using a Home Care Agency in Philadelphia, PA
Most home care agencies hire caregivers as employees, while others arrange for the services of home care workers on an independent contractor basis – also known as 1099. Known as “registries,” their caregivers are not employees but rather employed directly by the clients. If you hire a registry that contracts out their work, you’ll be dealing with most of the same issues mentioned above.
These are the benefits of hiring an employee caregiver through a reputable home care agency:
Peace of Mind
A home care agency that employs caregivers is not only bonded and insured, but they also cover their employees under worker’s compensation. Independent (direct hire) caregivers not employed by an agency do not carry liability insurance or worker’s compensation. If an accident or other incident occurs on the job, you would likely be responsible, which could cost hundreds or even thousands of dollars.
An agency will also screen its employees during the recruiting and hiring process, including a thorough criminal background check and drug test. That saves you the time and expense of doing so.
This key aspect is not included in the average registry provider’s business model. If the caregiver is not performing up to your expectations, for instance, they repeatedly arrive late or miss shifts, you are on your own and will need to speak to the caregiver directly.
Home care agencies implement disciplinary policies that help their employees improve. Once you voice your concerns to a supervisor, they will speak to the caregiver or, if you prefer, send you a different caregiver. As opposed to a registry or direct hire, agencies also have backup plans in the event your regular caregiver is unavailable.
Because there is no risk of a labor relationship, training is yet another dimension that only reputable home care agencies can deliver. If hiring a caregiver directly, the client must assess the quality and skill of the caregiver. This becomes even more essential if they require hands-on personal care or have limited mobility, dementia, or Alzheimer’s.
A trusted home care agency routinely trains and tests its caregivers, giving you one less thing to worry about!
Although hiring an independent contractor will cost less per hour, saving money should not be primary determinant when your or your loved one’s care weighs in the balance. Agency advantages such as experience, training, supervision, and peace of mind usually result in better caregiving outcomes and more satisfied clients that you cannot put a price tag on.
Most seniors aren’t interested in becoming an employer, filing payroll taxes, or obtaining worker’s compensation and liability insurance. When having “the talk” about home care with your senior, please remember they are trying to make their life easier, not harder.
Your Family-Trusted Home Care Source in Philadelphia, PA
When you need caregiving assistance, contact DignaCare in Philadelphia, PA. While proudly serving families in Philadelphia, Montgomery, Bucks, Delaware, and Chester County, we are a licensed, bonded, and insured home care provider with highly trained professionals who are experts at delivering the nurturing our clients’ need. As an extended family in your senior’s home, our compassionate caregivers can perform duties like Dementia Care, Personal Care, Live-In 24 Hour Care, Errands and Transportation, Meal Preparation, Companion Care, Light Housekeeping, Respite Care.
Our agency’s focus is maintaining your loved one’s quality of life, as well as their dignity, self-esteem, and independence. For your added convenience, all our in-home services can be individually personalized into an affordable package when and where you need them! Please visit us at digna-care.com now to learn more about us or to schedule a FREE initial consultation for a senior in our service area.