I just found out that the caregiver agency that takes care of my mom pays their employees under the table. What should I do?

I'll tell you what to do and this is speaking from 25 years of experience as an in-home caregiver both agency-employed and private paid.

Mind your own business about how the agency pays their help. In cases like yours, there is no need to even keep the agency as part of mother's care plan. If they're paying under the table they are not insuring the employee, paying social security for her, giving her sick time, no worker's comp if she gets sick, and if a client passes away and there's no work she doesn't get unemployment.

So basically, the agency is for lack of a better term on my part, is like a pimp. They do nothing and provide nothing. Only the employee has to turn over a cut of her money every week.

You can cut out the agency and hire and pay the caregivers privately.

If insurance is paying, then let that arrangement continue and you (using your mother's money) make up the difference in cash for what the agency won't pay.
The agency is the one taking the risk here not you. They are the one who will get in trouble with the IRS and the ICE if they're hiring and paying under the table. You giving them each some cash every week leaves no paper trail and you won't be taking any risks.

I see the problem here by OP paying under the table, she has a contract with the agency. If Medicaid is ever needed, she needs to tell them where the money went.

You could have a conversation with the agency management/owner explaining that you just took over the parents contracts and need to update the records. Ask for a copy of their membership with e-verify and COI (certificate of insurance).

Be ready to come home or move mom to care. Four+ year employees can be found but are not the norm.

Three of the caregivers for my mom from the same agency asked me for extra hours, cash for those hours, and to not let the agency know about it. I never did it, but eventually changed agencies, mostly because they had too high of turnover with their employees, most likely because they were not paid enough. I still wonder if I should have told the agency, but I really did not like the owners, so I just let the issue go.

Why is that a huge moral dilemma?
The amount of waisted taxes politicians squander, is into the millions.
Pay her under the table and forget about it.
Do you want to change care provider now? She's doing a difficult job, that not many people want to do, you trust her, her presence helps you out. Taxes are your least concern.

Are the multiple caregivers from this same agency? And do the corroborate this caregiver's story about the agency paying its employees under the table?

Could there be the possibility this caregiver is not being totally truthful about how she is being paid in order to try to coax some more money out of you?

For example, are they perhaps paying her under the table for any hours over 40 per week she works, so she won't trigger overtime, or being marked as a full-time employee and therefore entitled to benefits?

I'm not saying it's not possible, but it seems to be an awfully big risk for a company to take, to pay its employees under the table, and risk ramifications from the government, especially the I.R.S. Especially if a disgruntled employee decided to "drop a dime" on the agency, as the old saying goes.

Before you consider doing what she asked, maybe try and verify her story. Because if she is indeed being paid under the table, as BurntCaregiver said, you have the option to pay her directly and remove the agency from the equation.

IT sounds like she dosent make enough money to survive. In PAmost agencies pay 14.00 AN hr while the agency gets 32 an hr. Hire her yourself being you like her. I USE CARE.COM AND they do backround checks and they most girls get $20 an hr and there is a fee to join care,com

If you are anything like me, I love to jump to conclusions and make mountains out of molehills, but between the commotion and making a fool out of myself, I do my best (I don't always succeed) to take a deep breath and think about my thoughts for a minute. I am going to suggest you do the same...

If you have great Caregivers you know, love, and trust, count yourself amongst the luckiest of lucky. You and Mom are blessed, so let's not do anything rash or off-the-cuff, okay???

First, let's check in on the vocabulary. They may have "paid under the table" confused with being 1099 independent contractors who don't get taxes withheld but get a 1099 at the end of the year. That is totally Kosher, completely legal, and usually provides a win-win-win for the clients, caregivers, and agency. I would check with the caregivers first, then the agency. If that is not the case, then all good news for you! I will explain in a minute!!!

I would also quickly like to address the concerns about Workman's Comp that some of the 13 other experts who have chimed in mentioned. Companies that staff 1099 Independent Contractors will not cover their caregivers with Workman Comp. (There are private products that cost about $9/week that are essentially just like Workman Comp if that's a big issue.) In all the years I've been doing this, I've never had a Workman's comp eligible accident at a client's home. Yes, they "could" happen, but your homeowner's insurance will likely give you all the protection you would need in the rare case a qualified accident did happen.

Now, back to Mom and ensuring she gets the care she deserves! Worst (or best) case scenario, the agency has been fleecing you all these years. (We'll call this Option 1) No worries... that means you don't have an enforceable non-compete, and the girls won't either. It means you have all the power! In a few phone calls, you can find a new 1099 agency, explain the problem to them, and let them know you are happy to keep paying the same price, but you want the girls to make $X more. With $0 customer acquisition costs, staffing costs, training costs, etc., any smart businessman would jump on that at a 25% margin.)

PRO TIP! When calling an Agency or Registry, the first question to ask is, "Do you accept Medicaid"? If they say yes, say, "Sorry, wrong number," and hang up. Just because of the nature of Medicaid, those agencies tend to have lower standards that, unfortunately, might carry over to their private pay clients.

Now, let's say the Agency is on the up and up! You are the customer, and you do have the right to negotiate and/or renegotiate an agreement.

(We will call this Option 2.) I suggest you be really straight with the Agency owner and say, "My girls aren't making enough to pay their bills, and it's starting to affect my mother's care. I need you to pay them more.". (Important negotiating strategy... now SHUP UP AND LISTEN!). If you are lucky, he'll say okay - knowing that you are a good, reliable client that is easy to manage and pays well. Or, he might propose a compromise, like he'll give the girls $2/hour and raise your bill rate by $1/hour. Do what's right for you and mom!

If Option 2 doesn't work, you can always go back to Option 1.

Option 3: Have the agency bill you extra and have them give that money as a bonus to the caregivers (on their 1099, so you don't need to worry.)

Option 4: (talk to your accountant first; don't take my word for this) Have the girls start their own LLCs or S corps so you can pay them directly without worrying about 1099s. (It won't work if any LTC insurance is involved.)

Option 5: Not recommended, but you could give the girls' money under the table, but let the agency know you are doing it, so there is transparency. But never pay them more than $600 per year if you aren't prepared to provide 1099s.

Would it make you feel any better to call it a tip? We tip everyone now...if I pull up to a starbucks drive thru window, they want a tip to hand me the coffee I just bought. If you truly like the care she is giving your mom...just give her a tip every month.

Honestly, i’ve worked with people from Ukraine, and other Eastern European countries, and being paid under the table is a completely normal thing to do. The caregiver might not feel like they’re being underhanded at all. You could just pay them a tip regularly I suppose, give them a gift so to speak. But you do have to somehow account for that. Make very sure that the agency really is paying them under the table before you jump to conclusions and yak to everybody, it won’t be easy to take it back.