Hiring Private Pay Caregivers
Recently, I have been receiving many requests for finding private pay caregivers instead of going the agency route. So, for those of you looking to go in that direction, here are the things to know when hiring a sitter/companion.
What constitutes “private pay” caregivers?
A private pay caregiver (also known as a sitter or companion) is an independent person that is not associated with an agency and paid out of the pocket of the individual or family that is hiring. It is important to understand that insurance will not cover the cost (private, Medicare, nor Medicaid).
Where to start?
Prior to deciding on home care, make a list of ADLs (activities of daily living) that the older adult will need assistance with from the private pay caregiver you will be hiring. From there you can create a list of expectations for the person you are hiring, for example:
- Cleaning and maintaining their home
- Preparing food
- Laundry
- Driving/running errands
- Medication reminders
- and so on… (below is a sample schedule I created for a client’s family)
It is important to understand that some people may need more assistance than others and your list of tasks could be just five items. There is no one size fits all!
Determining finances
Once you understand the expectations, you can then guess the number of hours per day or week that you would need to hire someone. From there you can create an hourly rate or salary (also be sure to check with financial advisor and CPA for a budget.)
Researching and interviewing Private Pay Caregivers
Because private pay implies a one-on-one contract and not the use of an agency, you will need to reach out to friends, family, neighbors, co-workers, etc. to gather names and contact information.
Once you have a good list of at least three candidates, you will want to have done a background check and then meet with them for an interview. Having a list of questions prepared can make the process smoother and easier when comparing caregivers.
If you do not know what kind of questions to ask, I suggest purchasing The Caregiver Toolbox, which can guide you through the process.
Important topics to discuss
When you feel that you have found the right person or persons (you might need to hire several to cover days, nights, weekends, and holidays, a few important topics need to be brought up.
Some of these topics include:
- Vacation/ paid time off
- Bonuses
- Care expectations (not sitting in front of a television or computer all day)
- Training or CPR certified
- Chores, etc.
Responsibilities as a private pay employer
Since the private pay caregiver is considered an independent some important paperwork needs to be created and filled out, such as:
- Acquire an EIN (Employer Identification Number) or FEIN (Federal Employer Identification Number). This is required for tax purposes.
- Obtain a state tax identification number (if your state requires it.)
- Purchase liability insurance or worker’s compensation insurance.
- Complete an Employee’s Withholding Allowance Certificate (or a W-4 form)- both at the state level and federal.
- Report your new hire to your state.
- File a Form I-9 to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must properly complete Form I-9 for every individual they hire, including citizens and noncitizens.
- Calculate tax withholding amount once salary has been determined. Pay said taxes quarterly (state level) and annually (federal).
In conclusion…
Hire a CPA and an Elder Law Attorney to make sure you crossing all of your “t’s” and dotting your “i’s”. Otherwise, if something were to happen and you had not covered all bases, you will end up spending more money, time, and possible heartache.
