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Liability?


Wages, taxes?

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Create a contract. See an elder attorney to answer specific questions for your area.
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And a payroll company or CPA that can handle all of the financial side.
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You can go onto your state's website and find the labor laws that deal with caregivers. In my state a privately paid caregiver is never a contract worker, only an employee. You can find online bookkeeping, like QuickBooks online has live people, or go onto Nextdoor.com and see if you can find an individual to hire by the hour. A CPA or payroll company is overkill and will cost too much.
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This raises an interesting questions about the typical contact which precludes caregivers from being hired by clients.    If the agency is dissolving completely, I'm assuming but not entirely certain that the employees would be released and could be hired privately. 

Are you certain the employees would be available, and are not being "absorbed" by another agency?   That could possibly be an arrangement the agency has created as part of employee severance.  

However, I'm more familiar with creation of contracts than termination. This is a question for a labor law attorney, or you could try to find a labor law forum and pose it to attorneys who post there.  You need to know if the employees have any obligation to refrain from private contracting once their employer has dissolved and no longer exists, whether the employer gives them a release to work for its former clients, and whether there's any liability to you for hiring those employees.  

This isn't unusual in business, but it is in terms of private home care.

One aspect you need to absolutely sure of:   is this agency owned by, or created through an LLC?   I learned by doing some research when we needed home care that a very prominent home care agency in this area is in fact an entity created through an LLC, which means that there are members who've paid for a "stake" in the LLC's operation, and in this case would presumably be affected by a loss of income from the dissolving agency.

There are other posts here on this issue, and one just recently.  You might want to check out the archives for more information.

https://www.agingcare.com/search?term=hiring+private+caregivers+

There are a good variety of posts offering good advice.

As to liability, I learned about this more from my insurance agent.  In Michigan, homeowners' insurance does not cover paid employees if they're injured.  I was advised that a commercial liability policy would be required.   About 3 years ago, the annual premium would have been about $750, with annual increases.

The liability issue killed it for us; we weren't willing to commit to that kind of annual expense, or the assumption of liability for any hired caregiver who was injured.   That could have bankrupt us if someone was injured, sued and was awarded a substantial judgment.

I'm not trying to discourage, just to highlight the possible negatives for consideration.
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I would explore with an elder law attorney an hour of time to learn all of the above. Because yes, YOU incur now the liability for injury, the tax repercussions, and there will be a learning curve. You will save money, but there are other things to consider as you already know. Unless you are very savvy it is more of a risk.
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This is accomplished by asking these employees if they're interested in staying on the job as private-pay caregivers.
Pay them the same rate you were paying the agency for their service.
As far as liability goes, it's maybe not what you think.
I haven't worked for a agency in some time. Back when I did we had to get paperwork signed daily or weekly by our clients or their representatives. If they still do this, ask take a look at the fine print usually located on the back of the time sheets. It pretty much spells out that the agency is only liable for a certain dollar amount in the way of liability (on my jobs it was always $1,200). Then because you're signing it, you agree in the event of an incident to pursue damages from the employee instead of the agency, and the employee will pursue damages from the client if they're hurt on the job. This protects the agency.
You have paperwork similar to this drawn up and signed by your workers.
Then you hire them as independent contractors which makes them responsible for their own taxes, Medicare, and social security.
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Talk to the caregivers privately and ask what the situation is. Find out if they will be let go OR will the agency be “absorbed” by another. If so they may then become employees of another agency and they might not be able to take private jobs.
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Talk to an atty in your state so you get employee information and hiring done correctly. If the agency has already told you they are going out of business, then ask them if employees are free to hire on privately or if there is another company buying them out and employee bound by some kind of ongoing contract. You might also ask one of the employees what they are paid per hour - whatever you pay now is part for employee and part for agency. You may be able to hire one of these folks for a little more than they make now and still save money in the long run by cutting the agency's fee out of it.

The atty can help you where IRS is concerned (hiring contract, how to report taxes, if this would be employee or contractor, etc) and explain the liability ins you would need for an employee. Get professional advice on both of these things to avoid problems later on. Be sure to discuss with atty before you offer someone cash with no taxes taken out and no kind of contract in place.
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Talk to a lawyer before approaching any of the home health caregivers. make sure you know all the legal hoops you must go through: contracts, paying taxes, having insurance...

Then, ask the caregivers you prefer about private hire. Many would prefer to work for if they can get more wages and enough hours.
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Speak with a payroll service. They can supply all of the legal requirements to ensure that nobody can sue you and that they are covered with all required taxes and insurances. Some even offer health insurance to the employees.

You do not need to see an elder law attorney, this kind of issue falls under tax attorney but, more like a CPA.

You will want to have a contract to ensure that all parties know what to expect from the agreement. You can find samples all over the internet and save your money for paying the caregivers.

When you have a stroke at the 25% or so that the payroll company gets above what you are paying, realize that this includes unemployment insurance, workmans compensation insurance, FICA, and usually the 7.65% that an employer has to match for SS/Medicare. When you run the numbers it is actually pretty reasonable, you send them a timesheet and they cut the check, they invoice you and you send them a check, makes things pretty simple.
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