Elder Caregiver as Independent Contractor?

Many of HomeWork Solutions’ professional staff hold American Payroll Association (APA) professional accreditation. Regular professional education is a requirement to maintain credentials, and we receive many notices regarding webinars that help fulfill CPE credit requirements.

A current APA webinar offering is Employees v. Independent Contractors – How to Avoid Misclassification. The course description:

The IRS is really cracking down on finding and penalizing employers who improperly classify a worker as an independent contractor when he's really an employee. Don't let your clients get caught in the crossfire. Did you know that even if the worker agrees to be classified as an independent contractor, the IRS will not honor that agreement?

In general, a worker is presumed to be an employee except in situations where the family paying for services can demonstrate the worker's true independence. This means the employer must be able to prove that the worker performs services that the employer does not have the right to direct, the worker maintains an independent business enterprise with his/her own insurance, and that the services provided by the worker are outside the household’s usual course of business (ie. carpenters, roofers, etc.). Most household workers and elder caregivers who are paid directly by the household, or by a third party acting on behalf of the household, are employees and the employer is responsible for employment taxes, recordkeeping and required insurance matters. This is true of most elder caregivers you directly hire, and those senior caregivers you hire with the assistance of a registry service.

Our free white paper: Privately Employed Home Caregiver Payroll can help you understand your tax and recordkeeping obligations.

More information from the Internal Revenue Service.

July 2015 Update on Senior Home-Care Independent Contractor Issues

On July 15, DOL Administrator David Weil issued an Administrator’s Interpretation that said “most workers [who are classified as independent contractors] are employees under the FLSA’s broad definitions.” This clarification by the government put the final nails in the coffin of the independent contractor myth.

According to attorney Cynthia Effinger of McBrayer, McGinnis, Leslie & Kirkland, PLLC, "The defining question in this calculus is whether the worker is truly in a separate business that is independent economically from the employer. If the worker is economically dependent on the employer, the worker is an employee in the DOL’s eyes."

Read her full opinion...

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