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Home care providers are classified into two distinct categories: Agencies and Registries. The difference between the two is the employment status of the caregiver. Which you choose may have major implications on your responsibilities and liabilities as a care recipient or family member.

Agencies employ their caregivers. Alan Homemaker & Companion Services, for example, is an agency.

Registries do not employ their caregivers. Instead, they use independent contractors.

Why is this distinction important to you?

An agency has an employer-employee relationship with their caregivers. This relationship does not exist between a registry and independent contractor, it exists between the worker and the consumer. Consumers are often unaware of the personal risks of hiring a care worker through a registry or hiring an independent contractor. In many instances, a registry may be less expensive, but they often fail to advise consumers of their financial obligations when consumers become employers of a care worker.

Work Related Injuries: Homeowner’s insurance does not typically cover an employee in the home. If the worker sustains an injury while on the job, such as a strained back or injury due to a slip or fall, the employer is liable for the medical expenses. As an employee of an agency, the caregiver is covered by the company’s worker’s compensation insurance, which is required by law in nearly every state. A registry does not bear this responsibility when using independent contractors because they are not an employer. The responsibility then falls on the party that hired the contractor, which could cause significant financial hardship even for a wealth patient. If the patient is unable to cover these costs, the worker may be left with a devastating injury.

Payroll Taxes: When a consumer is considered an employer of a home care worker, the consumer is responsible for the employer paid Social Security, Medicare, Federal and State unemployment taxes, as well as State and Federal payroll taxes. As an employee of an agency, the home care worker’s payroll taxes are paid by the agency.

Supervision: Good home care is dependent upon a well supervised care plan. A licensed home care agency has the responsibility to continuously supervise their employees. A registry does not bear this responsibility. If they were to supervise the workers, their workers would be considered employees of the company and the company would bear the cost of payroll taxes and worker’s compensation insurance.

A registry may be an attractive option to save some money, but the health and financial consequences could be dire.