It’s no secret that with advancements in health and medicine, life expectancy is nearly 10 years longer than it was just a few decades ago. But with age comes age-related health problems. Just because we are living longer, doesn’t mean that we remain spry and active for those extra years. Once someone can no longer care for themselves, they and their families have a few options, depending on the level of care needed. The preferred choice is having an at-home caregiver so the person needing care can remain in a comfortable, familiar environment.
From classified ads to websites like Care.com, there are numerous places to find individuals who work independently as caregivers. But before you start writing checks, there are a few things you should know about the responsibilities associated with hiring someone to work in your home.
Determine employment classification for tax purposes and file appropriate taxes
First and foremost, you will need to determine if the caregiver you hire will be classified as an employee or not. The determination of caregiver classification holds significant implications for tax withholding, payroll taxes, and other tax-related responsibilities, emphasizing the importance of careful consideration and compliance with federal laws. The IRS uses a guideline called the Economic Reality Test to make this distinction.
While we won’t go into detail about the Economic Reality Test in this article, when the test is applied, caregivers are almost always classified as employees. As such, they are entitled to be paid minimum wage and overtime in accordance with law.
There are some exemptions to this, including caregivers who primarily perform something called companionship services. However, for the purposes of this article, we will treat the caregiver as an employee since more often than not, that will be the case.
Comply with employer requirements
As an employer, there are a number of tasks that must be completed so that you remain in compliance with state and federal laws regarding the employee/employer relationship. It should be noted that tax and employment laws change regularly so you will also want to make sure you keep up with any changes in the law.
As the employer of a household employee, you may be required to register with state and federal agencies, withhold taxes, ensure your employee is eligible to work legally, and file income tax returns reporting wages. If this sounds like a lot, there are companies that cam assist you with these tasks.
Ensure you have a policy that will cover you against a potential injury claim
Another important thing to take into consideration when hiring a household employee is what you will do if that person is injured in your home. As the property owner, you have a duty to maintain a safe environment for anyone on your premises, including caregivers hired to provide assistance.
In Louisiana, household employers are not required to carry workers comp insurance (a policy that pays for medical expenses and lost wages if an employee has a work-related injury or illness). However, if you choose not to carry workers comp, you will want to ensure that your homeowner’s policy has adequate protection. Homeowner’s insurance typically includes liability coverage, which may help protect you in case someone is injured on your property, but not always.
Run a background check before hiring
Like in any job application process, your caregiver should be able to pass a background check. Louisiana is a closed record state, however, and only conducts background requests for specific agencies – not individual people. Your best bet is finding a reputable online background check website, most of which will require payment.
Get a caregiver agreement
Though it is not a requirement, employers should have a written contract that outlines the terms and expectations of the caregiving relationship. This document should address crucial aspects such as the caregiver’s responsibilities, working hours, days off, etc. Clearly defining the scope of care, including any specific medical or personal needs, ensures that both parties are on the same page regarding the expected level of assistance. Legal considerations, such as confidentiality clauses and dispute resolution mechanisms, should also be incorporated to provide a framework for addressing potential challenges. The contract serves as a protective measure, offering clarity and accountability for both the caregiver and the family. An experienced elder law attorney can help you with this step.
Hire the best fit for your family
While hiring someone to care for you or a loved one may seem an easy task, there are many things that need to be addressed before you do so. In addition, determining if they are a good personality fit for your loved one or weighing if they’ve got the right skills and experience you’re looking for, there is a sizable list of tasks that are required for employers to be in good standing in the eyes of the law. If you are ready to take on that list, an independent caregiver may be the right option for you.
The information provided is not intended to be legal or tax advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge, New Orleans and Lake Charles, LA. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027.
