This woman was hired through craigslist and wasn't fully candid about her approach to life until over a month after taking residence (caring for mom with dementia, only the two of them live in the house). Part of it involved a sibling not allowing frank screening during the initial phone interview, but that complicates this question too much.
Tax avoidance combined with some apparently radical anti-government views (full extent & practice unknown) is driving her anti-contract mindset, but she's been good otherwise and we're trying to figure out if forcing a contract would wreck the working balance. We're technically going on blind trust, based on nothing outwardly dishonest about her. The nearest one among us is 300 miles away from mom's house.
From web searches: "According to the IRS, if a privately hired / independent caregiver is paid more than $2,100 per year (in 2019), they are considered a household employee, not an independent contractor. Thus, the family hiring the independent caregiver takes on all the responsibilities of being an employer, which includes payroll and taxes."
It would make our lives easier if she didn't become an "employee" but it leaves all parties unprotected if things go sour. One pragmatic problem is that some household duties can't be defined without a contract. This may cause future friction if she doesn't want to do chore X or Y, even if it's not that difficult and shouldn't require hiring outsiders.
Is it reasonable or common for non-family live-in caregivers to shun written contracts?
Right now your mom can stay home with a single caregiver. What happens in the event that she can not be handled by one person or this person?
I wouldn't even bring up her personal beliefs. They really don't matter. She can think, believe or speak with Martians as long as it doesn't effect her job performance.
What you want is some type of understanding about how long she has to move in the event her position ends, for whatever reason. What types of issues would end the situation, from both sides, and what exactly is expected from her. How much notice you need for her vacations, are they paid or not? These are hot button issues with any employee and you want some idea of how to plan. It doesn't have to be confrontational in the least, just a civil conversation to ensure everyone is on the same page.
If she is so volatile that you can't have a reasonable conversation about these things then you are going to get screwed. She will pull something if she feels slighted if she won't address concerns that the family has about making sure everyone is on the same page with expectations. Seen it too many times to believe otherwise.
As far as paying her under the table, well, that's between the DPOA, her and the IRS if it comes down to problems with mom needing public assistance and not qualifying because of this payment plan. I do know that the employer (DPOA or mom) will have to pay all of the taxes, even the portion that would have been withheld from a paycheck by an employer, fines and penalties if there ever is an audit. Ignorance of the law isn't justification for breaking it. But that isn't the issue right now. So I would leave it alone.
Are you and the sibling that actually hired her in agreement about this?
I guess I am trying to understand your question and why you are asking it. What will change for you if you know this percentage? I will tell you my own experience. My mom currently has two caregivers, one works 40 hours per week, the other 20 hours per week. They are both over 60, they are both fairly good caregivers, and mom likes them. They both want to be paid off the books and I agreed to this arrangement because it is easier for us. However, after doing a lot of reading and researching, I realized that this isn't legal, not for them, and not for us. And I don't like breaking the law because I have enough on my plate without having to worry about being charged with tax evasion, which is a federal crime.
I have already told one caregiver that we will need to let her go at the end of the year because I want mom's caregivers to be on the books in case she ever needs to apply for Medicaid. I am not sure when I will tell the second one because mom really likes her and she is really nice. It is possible that I will use an agency for the full-time job and keep the off the books carer in her part time position for a little longer. I don't feel great about it though because I think having everything legal and above-board makes for peace of mind. I will likely offer to give her a raise if she is willing to work on the books and hope she will go for that.
One thing that really struck me about your situation though is that you only pay the carer $2,000 per month. That is very little, as others have noted. But where you live in the country may also come into play here. Where I live, the least that an undocumented worker would get for live-in help is around $150/day, or $4,500 per month. The agencies in my area are now charging $9,000 per month for 24/7 live in care. My mom has a friend with dementia who has round the clock, hourly care at $20 per hour, 4 different caregivers, plus a cook and housecleaner. She must be spending at least $12,000 per month on these caregivers, and they are all off the books. Her POA is not concerned because the women apparently is wealthy and will never need Medicaid. I still wouldn't feel right about it.
On the other hand, I completely understand your position about being unable to find good carers through agencies. Many of us are between a rock and a hard place in these situations. People who work for agencies get paid very little and often are not well treated or respected by their employers. Yet that is legal. Good caregivers who for whatever reason need/want to work off the books risk being prosecuted (and their "employers" do as well) ... There seems to be a moral problem here because often doing the legal thing means participating in an immoral and unjust society ... Like I said, we are between a rock and a hard place ... But I will definitely see if I can get you that percentage you are after, if it will make you feel better and give you some peace of mind.
Mainly, whether numerous people are facing tax problems over it if the IRS sees that they're writing checks. If we exceed the $15k annual gifting allowed, will they audit us? I was raised to keep things above-board.
Actual paper cash is too much effort and I wouldn't have encouraged it anyhow. We originally wanted to set her up as an online banking payee and she seemed to go along, but was glad when a technical detail made it tricky.
I just didn't know so much of this was done underground, and had even read about family members signing employee contracts. I've never myself had a job without everything signed and official. It's a new culture to deal with and it looks like we're "stuck" with it to make life easier.
https://www.dol.gov/agencies/whd/fact-sheets/79d-flsa-domestic-service-hours-worked
Burnt, you need to read up on Labor Laws.
Many people who do this kind of work understand and have discretion. In other words, we know how to keep our mouths shut if we're being paid with an envelope of cash. Families hiring an old-school homecare CNA like myself also know that a handshake means a done deal with us. We will uphold our end of an agreement and you will uphold yours.
I know of actual legitimate homecare agencies, public businesses who offer the option of finding a family an employee they can negotiate the pay with and the agency stays out of it. They find a caregiver for a client. The client pays the caregiver directly. The agency usually takes a week's pay one time as their fee. Then the caregiver is responsible for their own taxes and other things. I've taken a few jobs like this too over the years. It all works if the employee is getting paid well enough.
Live-In Domestic Service Employees. Live-in domestic service workers who reside in the employer’s home permanently or for an extended period of time and are employed by an individual, family, or household are exempt from overtime pay, although they must be paid at least the federal minimum wage for all hours worked. Live-in domestic service workers who are solely or jointly employed by a third party must be paid at least the federal minimum wage and overtime pay for all hours worked by that third party employer. See Fact Sheet 79B: Live-In Domestic Service Employment Under the Fair Labor Standards Act (FLSA) for additional information. Employers of live-in domestic service workers may enter into agreements to exclude certain time from compensable hours worked, such as sleep time, meal time, and other periods of complete freedom from work duties. (If the sleep time, meal periods, or other periods of free time are interrupted by a call to duty, the interruption must be counted as hours worked.) Under the Final Rule, these employers must also maintain an accurate record of hours worked by live-in domestic service workers. The employer may require the live-in domestic service employee to record his or her hours worked and to submit the record to the employer. See Fact Sheet 79C: Recordkeeping Requirements for Individuals, Families, or Households Who Employ Domestic Service Workers Under the Fair Labor Standards Act (FLSA) for additional information.
https://www.dol.gov/agencies/whd/fact-sheets/flsa-domestic-service
Why are you quoting me state legal statutes on domestic employment law? No one cares. The poster's original question was why a caregiver getting paid in cash would be resistant to an employment contract. That has already been answered.
I will tell you for a FACT that when an agency-hired caregiver takes a live-in position they do not get paid for 24 hours a day and yet they are expected to work or be "on call" 24 hours a day though. How agencies do it is the employee gets paid for an eight hour day, even though they work more than that. They do not factor in such things as the caregiver not being able to leave the premises at the end of their paid hours. Or that their days off are in fact not 24 hours and they have to be back in the client's home before the 24 hours is up. Or having to get up and down during the night to toilet a person, repositioning, or to change diapers. They assume that the client is going to be sleeping at night. So a live-in who's up all night because some demented elder is wandering around and trying to go out doesn't get paid for that time. The pay for above board, agency hired, live-in caregiver positions is so lousy that the pay for the actual number of hours they're on duty versus what the agency pays them does not equal anywhere near to minimum wage per hour in ANY state.
And yes, care agencies get away with this every single day. Yet a person who hires privately and pays a decent amount in cash should have fear? No they should not.
There's the "law" and then there is what's done. In the world of private in-home care, the employer who pays with an envelope of cash every week usually gets competent, trustworthy, dependable help. The employee knows they're getting taken care of right and does good work. Even though the person hiring is paying far less for the service than an agency charges, the worker gets a lot more than an agency will pay them. This is why cash pay normally works so well because everybody's happy. The client gets good care. The worker getting paid in cash is making good money and can get ahead. Especially if they are a live-in and don't have to pay for their own household. The family saves money because they don't have to deal with labor laws or a care agency.
Although I've never worked as a live-in and never will, I've taken cash positions and did very well for myself.
Some things work out better when they're done privately and quietly with an envelope of cash every week.
In response to your comment about not working with an employment contract.
If a job is paying in cash, there's no way to make a legal contract that would hold up if ever the parties had to go to court. So everything is done on a person's word. More times than not it's the caregiver who usually gets screwed on their pay and living situation by a family when dealing with an honor system. Not me personally because every family I ever worked privately for knows my golden rule. If the pay for myself or any of my girls that I bring in on a job is more than one day late, they will have to provide the care for their loved one until they pay up. I don't work for free. Many times I've had families who would try to get cute and not pay what they owed. They'd try pulling at my heartstrings about how much their elderly loved one loves and needs me, but they just can't pay right now. That's never worked on me. I don't care what a family's circumstances are. Either my money is on time, or their elderly loved one goes without my service or any of my girls.
This often seems harsh and cruel but that's how it has to be because caregivers get screwed over on their pay all the time.
If the caregiver's references check out and the families of former clients vouch for her then you should be fine. If you're worried about her squatting in the house if your mother goes into a nursing home or dies, then don't hire just one live-in. Most of the families I know who had 24 hour help had two live-ins (either they split the week or one did weekdays the other weekends). Or they employed a few people to cover the time. This way no one actually lives in the home so no problems arise when it's time to move on.
Myself personally I refuse to ever take live-in regardless of how much it pays. I cannot imagine a more miserable living situation then to have to live in the home of an elderly care client. Thank-you, no.
If I were you and worried about this caregiver living at your mother's house, advertise for an additional one or even two more. If you're paying well enough, finding good people won't be a problem. Also, please use care.com and not Craigslist for this. You will actually get to view caregiver profiles and chat with them personally. Tell your mother's current caregiver that the situation has changed and she will be splitting the week with another caregiver or two if you do it that way. This way your mother's house is nobody's permanent address. I think you will have better peace of mind doing it this way. Many people do. Good luck.
Since it's based on implicit trust, how does someone truly know who they can truly trust? Even family can turn on itself, you know. It's a circular argument to say trust is valid just because someone says so!
The main thing that makes me wonder is this lady's general appearance of decency combined with a wall where she'll stop talking about certain things, and/or gets a detached or impatient attitude, then snaps out of it in a minute. She has a way of semi-complaining but still seeming steadfast to the task, though she gets defensive at times if her loyalty seems to be questioned. That would give me hesitation with someone who hadn't been hired yet, but this boat really can't be rocked right now, and it's hard to explain without being in person.
"It all works until something goes wrong", huh? How much actual experience do you have doing homecare? I mean actual hands-on client care in the home. If you've been around then you know how things work in this industry.
Yes, things can go wrong. I have had things go wrong. Once I took an injury on a client's porch steps in the winter because they were icy. Broke my foot in three places and needed surgery. I sued the homeowner's insurance for damages. It was no surprise to the family and we talked about it. I was a friend visiting who took a fall on some icy the steps. By the time I recovered well enough to go back to work, the client had been placed in a nursing home. The family tried their best to keep her home but it was one things after another all at once. So they had to place her.
My point is people who take private caregiver work do not snitch on their employers when they pay cash. Even when they get hurt. Of course they expect compensation for an injury. Who wouldn't?
It works.
The purpose of contracts throughout history is that people often turn on each other in a bind, plus they help define tasks. The term "do not snitch" implies a code of lawlessness underneath, like certain neighborhoods that don't want cops involved. Rules can make life tougher but they also protect all parties if nobody needs to hide things.
I'm getting a murkier view of no-contract but it still depends on the individuals.
Regardless, she now has them up the a with any competent California lawyer, but they're all pretending saying that she's "family." Well she is not like this festering SIL day aide. She has no incentive to hide that SS income from the IRS and could get in trouble. Let alone if she falls down in their house.
SIL recommended her. SIL no doubt will not be suing them, because SIL is wanting even more of their inheritance, and as long as they put up with SIL's covid-giving, two hour smoke breaks and so forth, that's going to be the plan.
I pray that The Lord gives you grieving mercies and strength. May the legal end be easy and unstressful.
https://www.rand.org/news/press/2021/06/21.html
I would be really concerned about having a live-in who was off the books for all of the reasons others have mentioned. Since you say money is not an issue, how about speaking to your siblings and encouraging them to hire "on the books" live in help?
How have things been with the person since November?
You have hired her and are aware of this.
How is she being paid? Because if your Mom ever needs care of government or governmental pay help with medicaid, what is to say this isn't gifting?
I also would be EXTREMELY worried about someone thusly not vetted completely.
Overall this whole picture would worry me a whole lot.
You are not responsible for whether she pays her taxes or not, but you are responsible for filing W2s and etc.
This wouldn't work for me.
Short answer-
desperation is what leads us to be enter into contract-less live in caregiving arrangements. Indentured servitude.