Agency vs. Private

The Risks of Agency vs. Private

• Limited Accountability - When privately hiring your caregiver, you have no recourse if they do not show up for a shift, and there is rarely a back up plan when this occurs.
• Reduced Background Visibility - Background checks can be confusing, expensive and time consuming. Most individuals don't even bother. It's a big gamble to let a stranger in your home if proper precautions are not taken.
• Withholding (Trust Fund) Taxes - Any individual who employs a private caregiver directly, will be responsible for collecting and remitting the following to the Internal Revenue Service and the Department of Revenue for your state:
• The employee's social security and Medicare taxes
• Federal income tax withholdings
• State income tax withholdings. You should always consult with your accountant or other tax advisor regarding this liability.
• Employer Social Security and Medicare Taxes - If you employ a private caregiver directly, you will be responsible for remitting to the Internal Revenue Service the employer's social security and Medicare taxes. This is approximately 7.65% of an employee's gross wages and is paid by the employer in addition to the gross wages. You should always consult with you accountant or other tax advisor regarding this liability.
• Federal and State Unemployment Taxes - If you employ a private caregiver directly, you will be responsible for remitting to the Internal Revenue Service and the Department of Economic Security unemployment taxes. This is currently about 2.70% of the first $7,000.00 of an employee's gross wages. The employer is to pay this 2.70% tax in addition to the gross wages. You should always consult with you accountant or other tax advisor regarding this liability.
• Liability for Employee Job Related Injuries - If you employ a private caregiver directly you will be responsible for any job related injuries suffered by your employees. To protect yourself, you should contact your insurance agent to discuss the availability and cost of workmen's compensation insurance.
• Evidence of Professional & General Liability Insurance and Bonding - If you employ a private caregiver directly, you should make sure that they provide you evidence of their professional and general liability insurance and coverage by a fidelity bond. These types of insurance will provide you a source of recovery in the event that you suffer any loss or damage due to your employee's misconduct. You should contact your insurance agent immediately to discuss the advisability of such insurance.