It is a reality in our health care system that private home health care is expensive and sometimes difficult to obtain. Home care agencies not only charge by the hour, but they often have a three or four hour minimum shift requirement for their aides. In addition, people who live outside of the cities and surrounding suburbs may find it difficult to find home health aides in their area.

Many families try to counter the cost and difficulty of using a home care agency by hiring a private caregiver. Often the caregivers are neighbors or friends, or may be someone who has worked for another friend. You pay them only for the hours they work, rather than for a minimum shift, and you can pay them much less because they do not work for an agency and so you are not paying the agency markup. They sometimes even have training as a home health care aide.

These private caregivers usually provide wonderful care at a bargain price. However, sometimes the bargain can have a downside. Below are just a few of the drawbacks to hiring health care workers privately. I have also provided advice to manage the process properly if you do decide to hire a private worker.

Workplace Injuries

A private worker who does not work for an agency is not covered by Workers’ Compensation insurance (or simply “Workers’ Comp”). Workers’ Comp is required for all employees but private employers rarely provide it. What can happen without it? A home care worker is often lifting or assisting their patient to help them get out of bed or use the bathroom. If the caregiver hurts his or her back and can not work, he or she is entitled to apply for Workers’ Comp. Although you may think that your caregiver would never make a claim for Workers’ Comp, you should be aware that it may happen without intent. If the caregiver goes to the hospital, a standard question always asked is, “Were you hurt at work?” Your caregiver may innocently answer yes, not realizing that answering the question in that manner will trigger his or her insurance company to pass the claim off to the employer.

You can obtain your own Workers’ Comp insurance for your employee. You may be able to do so through your home owner’s insurance company.

Income Taxes/Social Security Deductions

Employers of private caregivers are often tempted to pay wages without any deductions because the employee is self-employed or an independent contractor. In Massachusetts, as well as under federal tax laws, a private home health care worker is unlikely to meet the definition of an independent contractor. It is important to understand that the decision of whether or not the employee is an independent contractor is not actually decided between the employer and the employee. The Commonwealth or the IRS makes the determination based on the facts and circumstances of each situation. For the Massachusetts law, see MGL c. 149 s. 148B, and for the IRS “twenty point tests” see IRS Revenue Ruling 87-41.

The employer is expected to withhold income taxes, Social Security and Medicare taxes from every paycheck. Arranging for these withholdings is not difficult or expensive. You can hire a payroll service or a CPA or book-keeper who can assist you in automating the process.

One additional issue is that the fact the caregiver himself or herself will often ask to be treated as an independent contractor so as to collect more money. Doing so can subject you to fines and penalties if a determination is made by the state or federal government that the employee is not an independent contractor. Note an employer of less than 10 people is not required to provide health insurance.

Domestic Workers Bill of Rights

Massachusetts adopted the Domestic Workers Bill of Rights in 2014. The law requires an employer to give a notice of rights to certain domestic workers, including those who are “caring for someone who is old or sick.” The rights include:

  • A written contract for employees who work more than 16 hours/week.
  • Payroll records and a paystub.
  • Payment of minimum wage.
  • Work free rest periods and meal periods at required intervals. During the rest and meal periods, the employee must be free of all work duties and able to leave the place of employment.
  • Sick time and leave as required by the law. Although the employee is not necessarily paid for the sick days, his or her job must be protected.
  • Additional rights apply for live-in workers.

For more information see:

Lack of Accountability

Having a private caregiver is often a wonderful arrangement, but if the job doesn’t work out, or if your loved one needing care suddenly wants a new person, what do you do? What if your private caregiver can not make it to work one day?

There are many ways an agency can solve these problems and prove their cost to be worthwhile. Below are a few examples:

  • If you or your loved one has an issue with a caregiver, you can ask an agency to send another person.
  • If a caregiver is sick, has car trouble or a sick child, an agency can send a substitute.
  • An agency usually provides training for aides concerning how to safely assist a patient.
  • An agency will do background checks to be sure that the caregiver does not have a criminal record.
  • An agency will take care of all scheduling, training, payroll, and the various types of insurance needed.

If you decide to hire a private caregiver without an agency, be aware of the drawbacks and take steps to mitigate any potential harm or disruption to your loved one and to your own peace of mind.