Consumer directed care comes with many benefits, including the comforts of home, care continuity, as well as significant cost savings over in-home care provided by a business (like a home care agency). However, when a family employs a caregiver directly, they become a household employer and are responsible for managing payroll and tax filings, as well as maintaining compliance with federal, state and local labor law and HR-related obligations.
Enlisting the help of a household employment specialist is important because most payroll companies are built for businesses not families. They file business tax forms, which causes confusion and issues with the IRS when applied to household employment situations.
Additionally, since commercial businesses have attorneys and in-house HR professionals, most payroll companies are not setup to provide labor law guidance at all, much less specialized guidance for household employers. Without proactive guidance and support, families tend to have unanswered questions and frequent problems some of which can grow into expensive legal issues.
Specialized services like HomePay cater to the unique needs of household employers by handling the appropriate household employment tax forms and streamlining the other pieces of the compliance puzzle:
- Work Eligibility Verification. This includes instructions and guidance for Form I-9.
- New Hire Reporting. Every state requires employers to report the hiring of a new employee.
- Insurance Solutions. Many states require employers to carry workers compensation insurance, which can be difficult for families to secure. Access to resources to help coordinate payment from long-term care insurance and/or Veterans Administration benefits are also helpful.
- Wage and Hour Law Compliance. Minimum wage and overtime laws vary by state and industry. Specialists stay on top of household employment regulations and keep families compliant.
- HR Support. Families need proactive guidance and assistance with employment contracts, wage notice requirements, termination notices, paid time off, raises, bonuses, reimbursements, etc. The laws surrounding these items can vary by state and a specialist will know what is required and what is considered best practice in the industry.
- Tax Agency Management. A comprehensive specialist will handle IRS and state tax agency correspondence, audits and recordkeeping.
- Budget Planning. Specialists provide guidance and tools to help with budgeting for the total cost of care, including wages, taxes, insurance and tax breaks.
In addition to minimizing risk, proactive assistance with all the extras saves time in the long-run and helps ensure that the employment relationship runs smoothly. If you would like to discuss a specific household employment need or ways we can work together, please give us a call at (888) 273-3356 or send us an email to learn more.