Most seniors will need a home health care aide sometime during their lifetime. Medicare sometimes picks up the tab. Long term care insurance will probably cover the cost for those lucky enough to have a policy. But in most cases, you or your family will pay "out of pocket" for the care.
A home health care aide, or practical nurse, is someone who assists a senior with daily activities such as dressing, bathing, medication reminders, making meals, washing laundry, walking or transferring from a bed or wheelchair. Since most seniors want to live at home, the number of home health care aides is expected to skyrocket. In New York, where figures are available, the number of such workers has grown 33 percent in the last twelve years. The current number of workers is cited to be close to nearly 2.5 million nationwide, and growing. The average cost nationally is $19. per hour.
Hiring a home health care aide is very confusing, with three different methods of hiring. The first way is by posting an employment notice in the paper, asking for referrals from friends, or checking bulletin boards at senior centers. That route carries many responsibilities and risks. You certainly must perform a background check on the worker, or at least check referrals and recommendations. You should make certain the worker is a U.S. Citizen who can legally work in this country. You will also probably need to make arrangements for payroll.
Not only do you risk hiring someone who may cause harm if you don’t do a background check, but you are also liable if the worker is injured on the job through your negligence and you have not purchased a worker’s compensation insurance policy. If that happens, you are responsible for medical bills, lost wages for job related injuries, plus pain and suffering. If you place this worker on a payroll and purchase a worker’s compensation insurance policy, you are only liable for medical and rehabilitation expenses caused by a work related injury, paid by the insurance company.
You must set up payroll. You are responsible for the employer’s portion of social security and unemployment benefits. You must withhold taxes and send them to the tax authorities. However, in Pennsylvania, because of a special exemption in the law, you are not obligated to pay your employee minimum wage or overtime. This is expected to change in the near future as the U.S. Dept. of Labor considers a change in the law.
Some people try to avoid the payroll tax and employee benefit costs by hiring the aide as a 1099 employee or “independent contractor”. That may or may not work. If the worker is subject to your supervision and control, they will be held to be an employee anyway after an audit, and you will be responsible for back taxes plus interest and penalty. Furthermore, the worker may apply for Unemployment Compensation and you may be held liable for that benefit. The result might be different if the home health aide has set up his or her own corporation with a tax identification number, business license and has other customers. That is rare.
A second way to obtain an aide is through a registry. In this case the company has a pool of workers, and you choose one from the pool. The registry may perform a background check on the employee. The registry may even have an insurance policy that covers the worker while in your home. You are still responsible for employee benefits. As above, you are not obligated to pay minimum wage nor overtime. Be careful when dealing with registries that advertise that all their “employees” are bonded. The home health aides are not their employees, and so may not be bonded.
A third way to pay for a home aide is through an agency. The aide is an employee of the agency. The agency withholds all necessary taxes and pays for workers compensation and other employee benefits. The agency may even pay medical benefits and vacation time for their employee. Although this method of hiring an aide is less risky, and fairer to the worker, it is more expensive.
In Pennsylvania, if one hires a home aide who is an employee of the agency, that aide is entitled to the protection of minimum wage laws. They are also entitled to overtime pay at a higher rate than normal pay. That means that the agency may not allow the worker to work more than eight hours a day. You may have two or more workers come to your home each day.
But that is not such a bad thing. It is good to have more than one aide familiar with the elder client in case something happens to the other. In nearly every case there will be days or weeks when one of the workers is not available due to a personal emergency, illness or vacation. It’s good to have more than one worker familiar with the tasks and medications involved with every visit.
Whenever you call a company for a home aide, ask them whether they are a registry or an agency. Ask them who the employer of the aide will be—you or them. Readers, if you have any questions, ask them below. If you are an agency that provides aides, please feel free to add a comment below.
Stay well until the next post.
— Bob Gasparro
Robert Gasparro is an Elder Practitioner (an accountant and attorney). He can be reached at email@example.com or (484) 297-2050. He welcomes questions (which will be answered as a comment to this post), and ideas for future blog posts.