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 that 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.
Jennifer Parent can be reached at firstname.lastname@example.org.
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