I know this has been covered before, alas I don't have the energy to search, bear with me please.
My understanding is if a private doesn't earn more than $2700 in a year (for 2024) they can be classified as independent contractor and a 1099 misc can be issued. Otherwise they are an employee with the payroll headaches involved in that.
I would hire thru an agency but my mom uses a feeding tube. Super easy to train on, yet most agencies will charge an arm and leg for the level they think is required to do this. Looking at maybe 10 hours a week to give my dad an extra break and my mom too he's a lot even tho she needs the care! (I'm there for several hours a day already) . And it would be nice to train the person to use it in case what he needs to do overlaps with one of her scheduled formula feeds. And if one of us gets sick! This time last year I was laid up with covid for 2 weeks. That would cause real problems now given the state of her physical and mental health (very prone to anxiety). I know that number of hours will quickly add up to and exceed the threshold.
I'm in MA. As I'm writing this I think I may just use an as agency, I can't start getting into workers comp and worrying about getting or someone getting injured. Would be nice to have one person she/they get to know and trust tho as opposed to rotating and never know what you get...
Thoughts?
Is it about where to hire? Is it about what tax forms to do when you hire someone?
I am guessing it is about taxes; anyway, that's where I will start.
Whether you are hiring anyone for one thing or for another, or whether they are independent or through an agency, you are responsible for IRS rules.
If hiring through an agency check out rules with them.
In general, IRS and tax rules are easy to find through online. AARP has tax tips and guidelines for caregivers, also. Found this online with a click:
"IRS rules for hiring a caregiver12345:
If a caregiver earns more than $750 a quarter or more than $1,900 a year, they are considered a household employee, and taxes must be paid accordingly.
If a privately hired / independent caregiver is paid more than $2,700 per year, they are considered a household employee, not an independent contractor.
If a caregiver qualifies as an independent contractor, they are responsible for reporting the income received and paying appropriate taxes.
For tax purposes, someone is considered a household employee if you dictate their work in and around your home."
In general, when hiring through an agency, it is difficult to get someone "by the hour". They usually have minimums, because otherwise you can imagine a caregiver would be going from home to home, spending an hour at each and then another hour in travel time. Just doesn't work. Visiting Angels, when I checked them for my brother years ago, was a minimum of three days a week, four hours each day. So that would have been 12 hours per week. It does quickly add up.
Good luck. Not certain I answered the exact question, but I tried!
I did this kind of work for 25 years before going into the business end of it. Believe me every homecare worker has a side-hustle in cash at some point because homecare is famous for being unreliable and being an agency or nursing home employee doesn't pay much. For ten hours a week any CNA is going to be happy to get paid with the envelope system. No checks, no paperwork. You'll get a good person who if they don't already have experience with feeding tube and care (most of us do) they will train quickly from you.
You'll be getting someone to help out and the person you hire will be making a nice little chunk of change for themselves that no one's getting a piece of. For ten hours a week, go this route.
Pros of Private hire:
- hourly rate more affordable (if you do the bookkeeping and tax reporting yoursefl)
- may be easier to find someone for only 10 hrs a week (like a nursing student or neighbor or someone from your religious organization).
- you are more in control
Pros of Agency hire:
- aids are vetted with background checks
- the agency provides subs when your person is sick or on vacation
- no bookkeeping or tax reporting
- keeping/firing "bad fits" is "easier"; you can get a replacement faster
- the agency has final accountability if an aid steals from you
- aids covered by WC (Worker's Comp)
Cons of Private hire:
- interviewing; background checks on candidates (every time you need a new person)
- being an employer if you go over the IRS hours for contract (payroll; withholding; quarterly reporting; W2s etc) and comply will all employer responsibilities.
- having to increase (and pay for ) sufficient liability coverage; making sure they have coverage themselves
- no subs unless you have 2 hired people on rotation
- risk of theft
- you will need to pay for a legally drafted contract that protects you.
- paying for a bookkeeper to do the payroll/reporting piece; find such a service (FYI you still are ultimately responsible if they make a mistake).
Cons of Agency hire:
- agencies don't always train their people properly or enough
- not many agency aids want clients for less than 20 or 30 hrs/wk
- the agency is only as good as the management and schedulers
- read the contract thoroughly before you sign it
I'm sure I've probably left out other pros and cons but this is what I've learned from my own personal experiences. I hope this helps.
It's ten hours a week. That's a side-hustle for some CNA who wants to pick up a bit of extra cash. There's no need to complicate it with unnecessary paperwork and contracts. For ten hours a week the less done in writing the better for everyone all around.
As for a homecare agency. They do not train employees. If you're a CNA you are already trained and certified as a CNA. A homecare agency employing you does not train you to be a CNA. Some states require a CNA to have one year CNA experience in a nursing home or LTC before they can go into homecare.
People who are employed by a homecare agency to be homemaker/companions get zero training from the homecare agency who hires them. If they're lucky they get a careplan, but in my experience most agencies don't even do that. They basically send you in and you're on your own.
Most agencies will also pretty much hire anyone to do homemaker/companion work. There's not a lot of vetting going on. I worked with caregivers when I was still in the field who had records a mile long and had done time. The backround check is mostly looking for whether or not the employee had been fired from a homecare agency. Myself, I insist the employee bring their own police backround check and I insist on regular drug testing. I'm unusual though. The big agencies couldn't care less. They put a person in a home and collect the money. If a caregiver isn't a good fit for a client, no one is rushing to find a replacement. Same when someone is out sick. This is worse among the big chain homecare agencies. They really don't care.
They also do not pay Worker's Comp because most states don't require it for employees who are part-time and pretty much every homecare agency keeps their caregivers as part-timers so they don't have to offer benefits of any kind.
Agencies are not accountable if an employee steals from a client. Paperwork gets signed by potential clients and/or their represenatives that the agency will only be liable for 'X' amount of dollars and that the employee can be held personally liable and a client would have to sue the employee to recover any damages. The employee signs paperwork that they will not sue the agency or a homeowner in the case of injury or loss of property.
For ten hours a week, hire private and pay in cash. They'll get someone good if they're paying well and it's cash.
I do worry about "what if", what if she (carer) falls on the stairs. The number of hours wouldn't necessitate unemployment claims, etc. Food for thought. I imagine like Burnt said (I was hoping you'd weigh in!), people do this all the time without mishap. Doesn't mean there's no risk, just has to be risk I'm willing to live with (I own the place they live in)
My dad was a line cook and worked "under the table" often. He paid for it in diminished social security benefits later. But for an older woman who has been doing this for years or someone who is doing a side job that knows how she wants to be paid and what works for her....
If and when the need for more substantial hours increases I'll have more to consider.
Appreciate the input and discussion.