I just found out that the caregiver agency that takes care of my mom pays their employees under the table. What should I do?

I think that you are being scammed. I would tell the caregiver that you are going to the agency. I don't believe or disbelieve her, but a reputable agency would be out of business fast with this sort of thing. Like at once. Too much of a risk.

As to papers? Of course, in all likelihood, she doesn't have papers. I do believe it may even be illegal to ASK her about that, as companies have got in trouble doing so. It honestly isn't on YOU to check that; that goes through the agency. Not your business nor are you liable for hiring, but you COULD be in trouble with this under the table nonsense.

I would tell her you are morally beholden to both report her request to be paid under the table to her AGENCY and to the IRS.

She can deny she said that, and likely she will. You have no PROOF she said it. So going to the agency alone may iron all this out.

Do you have any social workers involved with your Mom? A good place to start with this.

I’ve been an employer for decades and am trying to figure out how a (supposedly) legitimate business (LLC or corporation) can only pay “employees” under the table.

So, the “agency” must not be an actual registered business. This is problem # 1.

Problem #2 is the aid asking YOU for a raise. In cash. Nope. Inappropriate. Weird.

Go to a different agency that you have researched thoroughly and has ratings/recommendations from the community.

FYI many people want to be paid in cash to avoid taxes or exceeding their SS or welfare income limits.

Did you research this agency when you hired them? I would not necessarily stop using them. Not your problem they pay their staff under the table. You have a contract the agency not the aide. You don't give her a raise, the employer does. If the employee wants to make more money, she gets another job. Maybe keeps the one she has and works another shift somewhere else. Not your problem she does not get paid enough. I agree, your being scammed.

Not sure if you should tell her employer what she said, she could get fired. And I would tell her that. "Sorry, I cannot pay you under the table. I already pay the agency a good sum for Moms care. I won't tell ur boss that you approached me because I am afraid u will get fired and I do like your work. But what ur asking is illegal. And so is what your employer is doing. I hired an agency because they are suppose to be taking out payroll taxes."

Don't pay her. Right now you are in the dark about this agency. If they are found of any wrong doing, they pay the price not the clients.

I had a similar experience. I called an agency, whose info. I got from hospice, to get an overnight aid. I had been staying with mom24/7 and was about to snap. I asked them if they were licensed and insured. They said yes. So my only other question was when can someone start. There were problems almost immediately. Caregiver being asked to work days immediately after my mom’s night shift, being asked to meet the owner in a parking lot for her pay, etc.
Someone here said the caregiver was probably lying. Then the agency called me and asked me to change my daytime aid’s hours so their overnight person could get to a day job. Ultimately the agency admitted to never getting my caregiver’s SS# and all kinds of other drama. It turned out the caregiver was telling the truth. The agency was the scammer. I reported them to hospice, who said they would never recommend them again. I should have reported them to the state, but I was in barely surviving mode at the time. Plus the aid was great and I didn’t want to get her in trouble.

I'll tell you what to do and this is speaking from 25 years of experience as an in-home caregiver both agency-employed and private paid.

Mind your own business about how the agency pays their help. In cases like yours, there is no need to even keep the agency as part of mother's care plan. If they're paying under the table they are not insuring the employee, paying social security for her, giving her sick time, no worker's comp if she gets sick, and if a client passes away and there's no work she doesn't get unemployment.

So basically, the agency is for lack of a better term on my part, is like a pimp. They do nothing and provide nothing. Only the employee has to turn over a cut of her money every week.

You can cut out the agency and hire and pay the caregivers privately.

If insurance is paying, then let that arrangement continue and you (using your mother's money) make up the difference in cash for what the agency won't pay.
The agency is the one taking the risk here not you. They are the one who will get in trouble with the IRS and the ICE if they're hiring and paying under the table. You giving them each some cash every week leaves no paper trail and you won't be taking any risks.

Are the multiple caregivers from this same agency? And do the corroborate this caregiver's story about the agency paying its employees under the table?

Could there be the possibility this caregiver is not being totally truthful about how she is being paid in order to try to coax some more money out of you?

For example, are they perhaps paying her under the table for any hours over 40 per week she works, so she won't trigger overtime, or being marked as a full-time employee and therefore entitled to benefits?

I'm not saying it's not possible, but it seems to be an awfully big risk for a company to take, to pay its employees under the table, and risk ramifications from the government, especially the I.R.S. Especially if a disgruntled employee decided to "drop a dime" on the agency, as the old saying goes.

Before you consider doing what she asked, maybe try and verify her story. Because if she is indeed being paid under the table, as BurntCaregiver said, you have the option to pay her directly and remove the agency from the equation.

You could have a conversation with the agency management/owner explaining that you just took over the parents contracts and need to update the records. Ask for a copy of their membership with e-verify and COI (certificate of insurance).

Be ready to come home or move mom to care. Four+ year employees can be found but are not the norm.

I just re-read what you wrote, and I think I misunderstood the first time I read it...

Am I reading this correctly now, that this caregiver asked her boss (from the agency) for a raise and when he refused, she wants YOU to provide the raise, above what you already pay the agency? And to do so in cash "under the table"?

That seems really unprofessional to me, if that's the case.

I had originally thought she wanted to leave the agency and have you hire her directly.

Three of the caregivers for my mom from the same agency asked me for extra hours, cash for those hours, and to not let the agency know about it. I never did it, but eventually changed agencies, mostly because they had too high of turnover with their employees, most likely because they were not paid enough. I still wonder if I should have told the agency, but I really did not like the owners, so I just let the issue go.

I see the problem here by OP paying under the table, she has a contract with the agency. If Medicaid is ever needed, she needs to tell them where the money went.

IT sounds like she dosent make enough money to survive. In PAmost agencies pay 14.00 AN hr while the agency gets 32 an hr. Hire her yourself being you like her. I USE CARE.COM AND they do backround checks and they most girls get $20 an hr and there is a fee to join care,com

Why can’t the caregiver find another agency? Right now, care agencies face a shortage of caregivers and nurses, so the demand outpaces supply. Caregivers now have the upper hand and can negotiate a better salary.

Report this 'owner' to the IRS.
With no LEGAL agency-employee contract/relationships, you/r mom could potentially be responsible for any injuries incurred 'on the job.' The bottom line, this 'agency' apparently lied to you. I would report them to any entity that monitors caregiver agencies.

Confront the owner of the 'agency' and record his / her conversation. As that could be illegal without telling the person they are being recorded, have someone with you - a witness.

You need to find out what your liability is when there is no agency protection. Worse, they do not vet their caregivers - experience, criminal record/finger-printing, provide workers' comp - nothing.

Anyone 'insisting' on being paid u-t-t is someone you do not want to work with - unless you are very aware of possible liability.

This isn't (to me) about legal status of workers. It is about the 'agency' - which appears to be a fraud lying to you. As someone below said, find out about their certification/insurance. Google the name of the agency and/or check with the BBB (Better Bus Bureau) and Attorney General - providing the name of the 'agency' owner. S/he should be reported.

With that said - it is up to you to hire who you want.
Tell this person you'll hire her directly and get rid of the middle man - if you want to keep her.

You have nothing to lose by directing hiring ... which with a legal agency, you are not allowed to do contractually) - if you signed a contract?

The concern I would / do have is that this worker could be reported by the agency if she is illegal. Although I would imagine that the owner/agency would be putting his/herself in jeopardy too.

And then consider ... how many others is this 'agency-owner' 'hiring under the table?

My concern is your liability. Everyone needs to make a living.

In this case, whether you got a 'contract' with the 'agency' doesn't really matter with the exception of - if you did get a contract, read it thoroughly. It is all lies to you ... since they are providing an 'employee' that is not legally working through / with the agency as a legal employee.

Report this owner immediately.


Gena / Touch Matters

There’s industries that underpay the employees, who are providing a very valuable service, there are a lot of workers who are not documented that provide invaluable services to us living in the states. I would be more concerned with the crime of agencies and corporations who take financial advantage of caregivers than I would about a caregiver having a decent level of pay

If you are anything like me, I love to jump to conclusions and make mountains out of molehills, but between the commotion and making a fool out of myself, I do my best (I don't always succeed) to take a deep breath and think about my thoughts for a minute. I am going to suggest you do the same...

If you have great Caregivers you know, love, and trust, count yourself amongst the luckiest of lucky. You and Mom are blessed, so let's not do anything rash or off-the-cuff, okay???

First, let's check in on the vocabulary. They may have "paid under the table" confused with being 1099 independent contractors who don't get taxes withheld but get a 1099 at the end of the year. That is totally Kosher, completely legal, and usually provides a win-win-win for the clients, caregivers, and agency. I would check with the caregivers first, then the agency. If that is not the case, then all good news for you! I will explain in a minute!!!

I would also quickly like to address the concerns about Workman's Comp that some of the 13 other experts who have chimed in mentioned. Companies that staff 1099 Independent Contractors will not cover their caregivers with Workman Comp. (There are private products that cost about $9/week that are essentially just like Workman Comp if that's a big issue.) In all the years I've been doing this, I've never had a Workman's comp eligible accident at a client's home. Yes, they "could" happen, but your homeowner's insurance will likely give you all the protection you would need in the rare case a qualified accident did happen.

Now, back to Mom and ensuring she gets the care she deserves! Worst (or best) case scenario, the agency has been fleecing you all these years. (We'll call this Option 1) No worries... that means you don't have an enforceable non-compete, and the girls won't either. It means you have all the power! In a few phone calls, you can find a new 1099 agency, explain the problem to them, and let them know you are happy to keep paying the same price, but you want the girls to make $X more. With $0 customer acquisition costs, staffing costs, training costs, etc., any smart businessman would jump on that at a 25% margin.)

PRO TIP! When calling an Agency or Registry, the first question to ask is, "Do you accept Medicaid"? If they say yes, say, "Sorry, wrong number," and hang up. Just because of the nature of Medicaid, those agencies tend to have lower standards that, unfortunately, might carry over to their private pay clients.

Now, let's say the Agency is on the up and up! You are the customer, and you do have the right to negotiate and/or renegotiate an agreement.

(We will call this Option 2.) I suggest you be really straight with the Agency owner and say, "My girls aren't making enough to pay their bills, and it's starting to affect my mother's care. I need you to pay them more.". (Important negotiating strategy... now SHUP UP AND LISTEN!). If you are lucky, he'll say okay - knowing that you are a good, reliable client that is easy to manage and pays well. Or, he might propose a compromise, like he'll give the girls $2/hour and raise your bill rate by $1/hour. Do what's right for you and mom!

If Option 2 doesn't work, you can always go back to Option 1.

Option 3: Have the agency bill you extra and have them give that money as a bonus to the caregivers (on their 1099, so you don't need to worry.)

Option 4: (talk to your accountant first; don't take my word for this) Have the girls start their own LLCs or S corps so you can pay them directly without worrying about 1099s. (It won't work if any LTC insurance is involved.)

Option 5: Not recommended, but you could give the girls' money under the table, but let the agency know you are doing it, so there is transparency. But never pay them more than $600 per year if you aren't prepared to provide 1099s.

Why is that a huge moral dilemma?
The amount of waisted taxes politicians squander, is into the millions.
Pay her under the table and forget about it.
Do you want to change care provider now? She's doing a difficult job, that not many people want to do, you trust her, her presence helps you out. Taxes are your least concern.

You are facing a difficult situation because "No" may lead to sub-standard care. Nonetheless, explain that you have to abide by the laws in your state. While she may be a stellar care-giver, you might find yourself in legal trouble in the future. Additionally, how do you hold a worker accountable for their actions if there is no record of payment. If her employer allows, you may want to consider offering gifts like groceries or gift cards

If she works for a legit agency, it's not likely she gets paid under the table (avoids taxes). Even if she has no papers, they would have needed a SSN to report her wages. Possible she is using a friend or relative's SSN to work. That is common to do.

You can just tell her that you have to report all money you pay out for caregiving for your parent because of accounting for the money he spends and for IRS records. If she persists, let her know you need her EIN from IRS so that you can send her and the IRS a W9 for contracted labor that shows the amt she was paid at the end of the year. She'll have to pay taxes on that money. NOTE - Undocumented folks can and do get Emp Id Number from IRS so they can pay taxes on their earnings at the end of the year. As strange as it is, it is illegal to hire folks without documentation, however at the end of the year IRS will process their income tax return and collect taxes from them.

natalya26: This is suspect from the get go and should be reported to the Agency and the IRS.

Check your Secretary of State's office to see if there is a company by that name registered with the State to do business in that state. If there is, at least it is a legitimate company. It doesn't necessarily mean they pay their taxes.

To me, the right thing to do would be to look for a new agency.

I'd be really, really careful. Now that she asked you for the money, if you don't provide it, she might work through your Mom to get the money or worse, steal from your Mom. That is the reason why I think you might want to find a new agency, pronto.

Would it make you feel any better to call it a tip? We tip everyone now...if I pull up to a starbucks drive thru window, they want a tip to hand me the coffee I just bought. If you truly like the care she is giving your mom...just give her a tip every month.

I can not believe a legitimate agency pays their employees under the table.
I would do some investigation and see if this is in fact a legit agency.
I wonder how your parents found this agency.
Have you looked on line to see if they have a website?

Are there traceable payments for the caregiving services? All the monies paid to the caregivers over the course of the years would this be looked at as a "gift" or is it a legitimate, tax deductible caregiving expense? I hope this will not cause problems if there is ever a need to apply for Medicaid.

I suppose the other question is how long will mom be able to stay in the house with caregivers? (are they there 24/7 or are they there a few hours?) Mom may soon reach a point where she needs 24/7 care. Is the house set up so that she will be able to get around safely..no stairs, wider halls and doors if she has to use a walker or wheelchair, larger bathroom so that she can manage with equipment and another person that will have be there to help her? Or will she have to transition to a Memory Care Facility?

Just because this caregiver says she is paid under the table does not mean it is actually happening. Most agencies have policies that forbid the caregiver to discuss their wages with clients or their families. Tell the caregiver that you are not comfortable with these discussions. Let him/her know that you are willing to give a good report to the employer in hopes that she/he will receive a raise.... but that is as far as you can/will go. If she/he persists in these types of comments, you may need to report this to their employer and the local Better Business Bureau.

Honestly, i’ve worked with people from Ukraine, and other Eastern European countries, and being paid under the table is a completely normal thing to do. The caregiver might not feel like they’re being underhanded at all. You could just pay them a tip regularly I suppose, give them a gift so to speak. But you do have to somehow account for that. Make very sure that the agency really is paying them under the table before you jump to conclusions and yak to everybody, it won’t be easy to take it back.

Maybe she is a contract worker with the agency and so they pay her cash and don’t withhold taxes? Idk. You also may be right that she isn’t legal. She could also be a nice person who lies.

Why would a legitimate agency pay an employee under the table? Why would a caregiver ask you for money?

Caregivers don’t make enough money. This is why there is a high turnover and a shortage of help.

I would call the agency to verify what the caregiver said. I wouldn’t be comfortable with an agency if they were paying their employees under the table.

I wouldn’t be comfortable with a caregiver asking me for a raise either. She should address needing higher wages with her boss. You are already paying the agency for a service. Why should you pay extra to the caregiver?

Not really an answer but can a private caregiver be paid cash without the 1099 forms, filling out SS, taxes? I had the chance to pay for private care but was hesitant because of unforeseen repercussions that may take place. Much cheaper for sure but who would be liable if something went wrong? I would have hired her but my gut said probably not a good idea. Is that even legal?

sounds fishy to me. the agency has too much overhead to be payinging under the table.

It's more than that - it's against the law. If your caretaker is extremely desperate, your mother's and/or your belongings might just go missing. That could include your driver's license, your credit cards, your cell phone. Replacing those involve enormous time, effort and frustration for you. If your caretaker is not earning enough, she needs to find another employer. If she is a U.S. citizen, she could be losing contributions to Social Security, possibly unemployment benefit funds, etc.

Be careful. Likable and competent, careful and honest caregivers are out there.

I always tipped the CNA $20 for transportation when she came . Extra $40 a week and made sure there was Mineral water or soda to drink . I was grateful I had a conscientious person helping me with My Dad and I tried to giver her a nice Christmas present .