Only if the facts of the working relationship support it; the label you choose does not decide it. The IRS weighs three areas: behavioral control, financial control and the type of relationship. If you set schedules, train caregivers and direct how care is given, they may be employees. ProfitDrawer's home care business guide suggests reading the IRS and Department of Labor pages before your first hire. Form SS-8 asks the IRS to decide.
The IRS's three areas of evidence:
| Area | What it asks |
|---|---|
| Behavioral control | Do you control, or have the right to control, what the caregiver does and how? |
| Financial control | Who controls the business side: how they are paid, expense reimbursement, who supplies tools? |
| Type of relationship | Is there a written contract, employee type benefits, an ongoing relationship, and is the work central to your business? |
The IRS says all information showing the degree of control and independence must be considered. Either side can file Form SS-8 for an official decision, which the IRS says can take at least six months.
Why it matters: if you treat an employee as a contractor without a reasonable basis, the IRS says you may be liable for that worker's employment taxes.
Wage rules too: the Department of Labor says that since January 1, 2015, federal minimum wage and overtime protections apply to direct care workers employed by home care agencies and other third party employers. State laws can add more.
Talk to a tax professional or employment lawyer before your first hire. General information, not legal or tax advice.
Source: Independent contractor (self-employed) or employee? (IRS) · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.