Are caregivers employees or contract employees?

Thanks for your answers. What I am understanding more and more, is that there are people that want to just pay cash, (because it would otherwise be a hassle), which is not the way to ever work for anyone.

I appreciate hearing from all sides on this.

Freqflyer, I was thinking that, too. The client pays under the table, usually cash. No one's the wiser. But as the caregiver, you won't be able to make any deductions at all on your taxes. And, I'd be careful. If you are making quite a bit of money and paying your bills but are showing no income, that could trigger an audit.

The advantage for the client would be that they would be paying out much less.

Be careful. If you get hurt doing your job but are being paid under the table, I don't know that you'd have much of a legal leg to stand on. And caregivers get hurt all of the time. Mostly backs.

Sharon

Kaydeb, sounds like the client wants to "pay you under the table", for what ever reason.... unless it has something to do with the patient getting Medicaid. This can get complex. Maybe another writer on this forum can elaborate.

pamstegman
I don't understand what you mean? Let me clarify. I have two college degrees, this isn't about education.

What I mean is in home one person would have to set up for me to be an employee and they do not want to go through all the paperwork. Some people in my city are set 100% that this is how you have to do it, and people that have you for 8 hours or for 2 months just do not want to do this. That is why I pay my own taxes.

It has everything to do with the people that want me to watch their loved ones, they don't want to set up as an employer, and I be the employee, and supposedly some people are saying this is the "legal" way to do it, not the independent contractor way where I get a 1099.

Hope that makes sense.

Both answers are correct.

You also mentioned the unreliability of work. And it is very irregular in this field. You may have a client and a steady 40 or whatever hours a week, and then they pass away, or go into a facility, and you are now "jobless". When I had my company, we always tried to keep our caregivers with plenty of hours, but we just couldn't promise them a full week continually. It's just too sporadic. Clients come and go very quickly. A 24/7 client, which was great for the caregivers, usually wouldn't last long: they'd either pass away or get well. That's just the nature of the business.

But this irregularity will also happen if you are self-employed.

Sharon

If you're going to be an independent caregiver, you'd better have your i's dotted and t's crossed is all I can offer. Just so you're aware, your Social Security contribution is going to be 14.4% of your income. And the IRS will KNOW your income, because you'll be issued a 1099. Those are all cross-checked.

On the other hand, you'll get to deduct from your income things like mileage to and from your charge's place of residence, supplies you might furnish (vinyl gloves, etc.), and other things like office supplies, etc. I'm thinking it'd probably pass muster, if you're even questioned. Odds are you won't be.

The downside: You won't be eligible for unemployment, You won't be insured if you're injured on the job. (In other words, you won't be covered by Worker's Compensation.) If you fall or hurt your back, or something like that, you'll be dependent on your charge's homeowner's insurance to pay your claim. And they probably won't since they don't generally cover injuries by contract workers. They are required to have their own.

Personally? I wouldn't hire you if you paid your OWN salary. Too much exposure on my end. But if you think it's to your advantage, go for it. You'll probably be fine other than the drawbacks I mentioned . . . and probably a few I didn't. ;)

"I hear from many people that they will not hire me (past tense), because they would not be an employee to hire me."
This makes no sense at all. I would want any applicant to be able to write and read. At least get your GED.

If you work on your own [not part of an Agency] then you are *self-employed*. You are responsible for paying your own estimated quarterly income taxes, paying for your own health insurance, and retirement funds. If someone hires you, you have a contract between that person and yourself. The client pays you directly.

If you work for an Agency, they are your employer... they take out the necessary taxes from your paycheck. The Agency might offer you benefits, such as vacation pay, health insurance, etc. The contract would be between the client and the Agency. The client pays the Agency.

If you work for an Agency and find you have free time to work on your own, you need to read the rules of employment with your Agency. Chances are the Agency wouldn't allow you to freelance on in your free time.