Using a referral agency
Home care referral agencies do not employ health and home care workers. They help you find caregivers near you, then—if it’s a good match, and you hire the person, collect a referral fee. Referral agencies, also called home care registries, are not required to be licensed, though it varies by state.
The level of screening done by referral agencies can also vary dramatically. Some agencies screen thoroughly and conduct background checks, others only verify the identity of the caregiver and nothing more. If you hire a caregiver through a referral agency, it may be up to you to do the screening and background check. This type of agency has no obligation to offer professional liability or workers’ compensation insurance since each caregiver works independently. You’ll want to find out whether there is bonding and liability insurance and you’ll need to provide your own insurance to protect yourself against worker injury on the job.
Since the caregiver is not an employee of the referral agency, they may be your employee, making you responsible for payroll taxes, income tax withholding, paid sick leave and overtime.
Finding an independent caregiver
Many people seek caregivers on their own. They may ask friends for referrals, post job descriptions on neighborhood message boards, or hire someone they know from church or other local groups. While this option is usually less expensive than going through an agency, it requires you to handle many more of the details yourself—something most people looking for care don’t have time for. You’ll need to detail the services you want, determine what you can pay, interview candidates, check their references, and run a criminal background check, which is always recommended. If you decide to hire an independent in-home caregiver, you’ll need to determine what taxes you’re liable for, set up a tax withholding system, and also be sure your homeowners insurance has sufficient liability coverage in case the caregiver gets injured on the job. You also may be responsible for paid sick time and overtime.
Using a licensed home care agency or home care organization
In California, agencies that are not referral agencies must be licensed as “Home Care Organizations.” These are often referred to as home care agencies. But it’s not always easy to tell if you’re dealing with a referral agency or a licensed home care organization, so be sure to ask. We’ll use the more common term home care agency to refer to licensed home care organizations. Licensed home care agencies are required to provide bonding, professional liability insurance, and workers’ compensation insurance. They are also responsible for all of the employment obligations of their care providers, including payroll taxes and compliance with overtime laws. While all licensed home care agencies are required to conduct a criminal background check of care providers, they are not required to check the driving record or perform a drug test. Be advised that not all background checks are equally comprehensive. So it’s your job to ask for the screening and background check details if you use a home care agency to find your caregivers.