Q. My mother suffered a stroke and needs 24/7 in-home nursing care. For the past six months, my mother has been paying three excellent retired nurses to provide for her care. Will issuing each of these private nurses a 1099 form satisfy her legal obligations and qualify them as independent contractors?
A. The question is whether these nurses should be classified as
independent contractors or your mother's actual employees. With
more families seeking in-home care, it is important to know how our
government agencies define employment status when it comes to
employing in-home caregivers, and the implications that follow.
Misclassification of workers has significant implications with
respect to minimum wage, overtime requirements, unemployment
insurance, federal and state payroll taxes, and workers'
compensation. There can be civil penalties, liability for damages
if someone gets injured on the job, penalties for back pay, and
back taxes.
The NH Department of Labor uses a seven part test for this
analysis, which can be found online at http://www.nh.gov/labor/forms/mandatory-posters.htm.
For an individual to be correctly classified as an independent
contractor versus an employee of your mother, all seven criteria
must be met.
For purposes of unemployment insurance, NH Employment Security has
what is called the "ABC" test to determine an
individual's employment status, found here: http://www.gencourt.state.nh.us/rsa/html/XXIII/282-A/282-A-9.htm.
If your mom is looking to hire independent contractors, the
following steps should be taken to protect her interests. She
should enter into a written contract setting out the mutual
obligations and expectations as a contractor. She is wise to hire a
company which has a federal identification number and to pay the
company for all services performed. That entity can then pay each
of the caregivers and pay for the worker's compensation,
unemployment, and liability insurance for them. Negotiate the
price. Have the company decide who works what hours and days during
the week and what each person gets paid. The caregivers should
control the care provided and training. The company should also be
allowed to offer similar in-home care services to others.
Unfortunately, despite most family's best intentions, this is
an area where significant legal obligations can arise unwittingly.
Take care to classify caregivers properly. If you have questions
beyond these guidelines, contacting an attorney well-versed in
employment law might save you and your family a lot of uncertainty
and stress.
Click here to see article in the Union Leader.
Published in the Manchester Union Leader, February 2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.