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It seems unethical, but trying to come up with ideas for affordable home care and we love the aide.

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In short, usually not.
You sign on with the agency and they provide insurance and bonding for you. You usually sign a non-compete clause, too.

When my client's family found out how meagerly you get paid as CG they went THROUGH my company and upped my bas salary so I was making a decent $15 an hour instead of $8. One of the client's sons was a lawyer and he did all the legwork. I didn't ASK for the raise, b/c the company DID NOT give raises, ever. Whatever amt you 'hired on' at was what you made no matter how long you worked for them.

Appalling, really. Plus my client routinely tipped me 'out of pocket' when she had me do extra stuff for her that wasn't in the contract. I've never felt so valuable and loved as I did those years I worked for her!
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Paying her privately would not save much money when you consider having an elder law attorney draft a contract, then an accountant or payroll company to manage the payments to social security, workman's comp, liability insurance, federal, state and local taxes. What about health insurance, if you provide it that could easily be another thousand a month. And paid vacation? And don't forget the fee to buy the caregiver from the agency. What if she decide to quit within a couple of months?

Sure, giving her a raise and paying under the table would save money. That is illegal and could get everyone in trouble with the IRS and other taxing authorities. Not paying into social security will effect the caregiver's benefit when she retires. Without a caregiver contract and legal payment could effect mom's ability to get Medicaid should she ever need it. Payments to caregiver without proper accounting would be considered a gift and subject to a penalty, the period of time that mom would be denied Medicaid until private pay equals the penalty. If caregiver were paid $36,000.00, under the table for one year, then once mom needs Medicaid fees to nursing home would have to be paid out of pocket for three months if nursing home fee was $12,000.00 a month. 12x3=36.

Be Kind, be very careful with under the table payment. Do you pay taxes, etc on the income? Do you pay into social security? What will happen if you are injured on the job?
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AlanBingham Mar 2020
This is excellent advice. There is much to consider with liability and tax considerations if you go with someone not from an agency directly.
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Our contract with our CG said we had to pay a large "buy out" fee if we hired her privately. We loved her,, but the buy out was the deal breaker. Look at your contract and see what it says.
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When I was looking for in-home help, the first thing I did was ask for a copy of the contract to review.  Every single one had clauses preventing the direct hiring of any of their staff w/o compensation, sometimes ranging into the $5,000 to $10,000 range.

Do you have one health aide on duty for 24 hours?   That's a lot for one person.  

Unfortunately, much as I searched, I was unable to find a home care worker outside of an agency.  The ones who were interested either weren't experienced, didn't have any insurance, and just weren't the right fit.   But those weren't the bigger issues, which were the costs and liability.

In order to hire this aide directly, you'd have to pay her directly as well, raising the issue of obtaining liability insurance, taking deductions and sending them to the IRS, and possibly the state.

The comp insurance, which in my state can't be added to a HO policy but would have to be a commercial comp policy, would have cost approximately $750 annually, with increases up to $1K the second year.   If the worker was injured, that comp policy could be paying out for years, causing you to dip into cash reserves you might have.

These are some of the downsides to hiring someone directly, especially for a 24/7 job.

BTW, I love your cute dog!
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You can ask her. She is a free agent to do as she pleases. There are advantages to having 1 caregiver - consistency. There are also disadvantages, no one to care when caregiver gets sick or wants a vacation. Agencies should cover gaps in care - illness of employee, vacation, days off - with their own staff.

My MIL did well with 4 caregivers through 1 agency that provided 24/7 care for her in her condo in Hawaii. She now goes to adult day program and has a caregiver at night.
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So, you hired an Agency and they met or exceeded your expectations and sent you a wonderful Aid who does a wonderful job. In turn for their exceptional service you want to fire them and steal their employee, causing irreparable harm to their business. Is it unethical? Do you really have to ask?
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The Agency may have had the caregiver sign a clause in the contract that prohibits her from accepting a private job with the client directly. If the caregiver did sign such a contract and there was a penalty for her to pay if she did accept private work, then you could pay that fee for her and that would solve the problem.
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Aside from any contract prohibitions or provisions, when hiring someone directly, you become the employer. That means you have to provide any needed liability, workman's comp and any "benefits" the person receives like health insurance. In addition, you must pay the employer's share of the Social Security and FICA tax, withhold federal/state/local income taxes and remit those to the federal government and state quarterly, as I understand it. You will need to get an employer taxpayer ID for that purpose. You can't just pay cash out of pocket, at least not legally. It's not like hiring a babysitter for a night.
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When we signed on with our agency, they told us that if we tried to hire that person privately that we would pay a fine of $10,000.
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You can do it above board by paying the agency a one-off introduction fee. The alternative would be that the aide leaves her agency, but she will probably find that her contract prevents her from then immediately taking a role with one of the agency's clients; and she would not be safe to assume that they won't enforce it when, rather than if, they find out.

In any case: have you actually asked the aide whether she is interested? If she were my friend I'm not sure I'd advise her to accept the offer, and certainly not if the agency she works for is a good one.

And again, from your point of view: what happens if she falls ill or is injured? It's never wise to place all your eggs in one basket, so to speak.
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