Beware when you ask for prices, you may be fed misinformation and downright lies when you ask for the cost of in home care.

Yesterday I attended a court ordered mediation involving a brother and sister who disagree about the cost of 24 hour care for their elderly parents.  One of the siblings asked me to attend to explain to the other sibling, the attorneys, and the mediator the true cost of qualified and legal in home care.    Everyone involved in caring for the parents could not make sense of quotes that varied by hundreds of dollars each day.

I had quoted that reputable agencies were charging on average $450-500 a day for a 24 hour caregiver, one person working the entire shift who would be expected to get some sleep while in the home.  Three other companies had quoted between $160 and $200 a day.  What a difference in the cost of in home care!  What reasonable person would opt for my rates over the other, much cheaper proposals?

The answer is a combination of buyer beware and you get what you pay for, plus some misinformation and downright lies.  As a former consumer advocate and investigative reporter for ABC 10News for 15 years, I feel worried that people are being taken advantage of, without being told the true issues and risks.  In each case of those lower cost quotes, the unscrupulous companies were luring the family into a situation that would potentially put the parent’s and their estate in harm’s way.

Two of the three lower cost companies admitted they were “registries”.  One said, “We are not an agency, we are a private company”, which I read as saying “You are on your own if legal issues come up.. because we are not responsible.”  Both companies asserted that that the caregivers that would be sent into the home would be “independent contractors.”

The biggest lie was printed in an email sent by the sales and marketing person for the company.  She wrote, “as independent contractors, our caregivers cannot file a worker’s compensation claim, so you don’t need that insurance.”

Lies, Lies, Lies.

Let’s start with the first lie, that the caregivers are independent contractors.  Not in California – someone is almost always the employer, responsible for new hire reporting, payroll tax withholding and payment, and workers compensation insurance.  Whether you have 1 employee or 100… the rules in California apply.  Some registries or “private companies” as mentioned above, work hard to make sure they are not the employer by quietly shifting that burden onto their clients instead.

If you control the hours the caregiver works, (you ask her to care for mom Monday through Friday), if you supervise (ask her to bathe mom on Tuesdays and make nutritious meals, and then check to make sure it’s done), then you are the employer.  I don’t know of any caregiver without hours set in advance and tasks that must be completed.  Simply labeling someone an independent contractor does not make them one.  Paying payroll taxes and following state law adds to the cost of in home care.  So what if you don’t do it?  There is no statute of limitations on payroll tax violations, penalties are huge, and families can easily be caught the moment the caregiver files for unemployment.  Not to mention civil costs of a lawsuit is filed.  California is must stricter than other states when it comes to the independent contractor issue.

Now to the second lie… that a caregiver called an independent contractor cannot file a worker’s compensation claim – that is simply nuts.  Anyone injured during the scope of work can file a worker’s compensation claim in California, especially someone who was misclassified as an independent contractor.  It’s not only risky to not have worker’s compensation insurance, it’s illegal!  People can be prosecuted for having people work for them and not having worker’s compensation insurance.   Worker’s compensation insurance is expensive, especially for the class of workers known as 8827 in California – caregivers.  Following the rules and having worker’s compensation insurance adds to the cost of nursing home care.

The third low cost quote came from a company that claimed to be a full fledged employer.  But I would argue they had to be doing something “shady”.  Here is why.  They quoted $200 a day for one caregiver working 24 hours.  But under current labor laws, caregivers must be paid for all hours worked, even sleep can’t be deducted now after a recent California Supreme Court ruling (Mendiola vs. CPS Security.) 

Its a simple math problem.  Take the current minimum wage in California, ($9 per hour), multiply it by 9 hours at regular time and that’s $81.  This is a 24 hour shift, so we have more math to do.  After 9 hours, due to AB 241, the California Domestic Workers Bill of Rights, caregivers are entitled to time and a half, (min. $13.50 per hour) for the remaining 15 hours of the shift.  Add all of that up, and it comes to $283.50 per day if no off duty breaks are taken.  (Off duty meaning the caregiver can leave the home if they’d like.)   What reputable company is going to charge a family $200 a day while paying $283.50 in wages, plus worker’s compensation, plus payroll taxes?  Clearly the company is not following wage and hour laws, and a family working with that company may be exposed to co-liability when the caregivers file a claim.

The mediator brought in to help the siblings during the meeting yesterday understood the risks.  She is currently working with another family who hired a caregiver privately.   The caregiver had stopped working for the family three years before the elderly parent passed away.  But as soon as the elderly client died, the caregiver filed a worker’s compensation claim against the estate.  That was five years ago! The case is still open.  I’m sure the family regrets being the employer in that case.

At the end of the day yesterday, the siblings agreed to hire us because we told the truth, even if we cost considerably more than those 3 other companies.  Our company culture is based on honesty.   I do worry about the cost because it puts quality care out of reach for many seniors.   Our state professional group, the California Association for Health Services at Home, is working with lawmakers to find solutions to the high cost of in home care.

I’m not trying to preach that everyone should follow the rules the way I do.    That is a personal choice and different people have different tolerance for risk.  I have no issue with registries, as long as clients are told they are the employer and must pay payroll taxes and have worker’s compensation insurance.  (Some don’t reveal that because then their rates don’t seem like much of a bargain..)  I do object strongly to companies with unrealistically low quotes preying upon people desperate to find care by saying there is no risk.   That’s fraud, that’s a lie.  Don’t take my word for it, read this  article created by the American Board of Home Care explaining the different home care options and the risks associated with each.  Be aware, the article uses the term “independent contractor” because that’s what the registries call the caregivers.  You already read my opinion on that.   Be educated and then make the best choice for your situation.

Lauren Reynolds Founder/Administrator

Lauren Reynolds
Founder/Administrator

 

 

Lauren Reynolds is the Founder/Administrator of At Home Nursing Care, a full service agency that provides in home care across San Diego County and the Westside, Southbay areas of Los Angeles County.  Previous to this role, she earned 14 Emmy Awards as a consumer and investigative reporter for ABC 10News and was honored by the Consumer Attorneys of San Diego for her protection of taxpayers, average families and workers.

At Home Nursing Care is a BBB Accredited, ABHC and CAHSAH Certified provider of quality in home support services for San Diego and Los Angeles areas. You can reach At Home Nursing Care by calling 888-634-8004 or visit us online at www.athomenursingcare.com