Our caregivers often tell us they joined CareLinx because working with us gives them great flexibility and control over their daily professional lives. After all, you get to set your own hourly rate, choose the care assignments you want to work, and maintain a schedule that best fits your needs – and your family’s.
While there are big upsides to working independently, there are also legal and tax considerations that go with it. As an employee, the company you work for must pay certain state and federal taxes and have insurance in place to safeguard your interests in the unlikely event something goes awry while you are performing your duties. On your own, those resources disappear. And that’s where people who seek care assignments through Craig’s List or even some other home care companies can run into financial trouble. All too often, they are unprepared for the big tax bill from Uncle Sam or for the even larger legal costs should the person in their care fall and the family looks to claim negligence.
As a CareLinx caregiver, however, these issues won’t be keeping you up at night. We took great care to make sure that the arrangement we have with our caregivers – and that you have with the families that ultimately retain your services – meet all relevant labor laws and regulations that impact us as a California-based company.
As you know, we require that any family using a CareLinx caregiver be designed as the employer of record. That means they are responsible for paying FICA employment taxes (which goes to Social Security, Medicare and Unemployment Insurance), in keeping with domestic employment law. In addition to helping manage this task to the benefit of families and caregivers alike, CareLinx bonds and insures our caregivers with a $1 million professional liability policy backed by Lloyds of London. That’s for everyone’s peace of mind.
Other companies in the shared- or gig economy (which is what they call companies that match consumers in need of a specific service with individuals willing to do the work), including our direct competitors, have taken a different approach, trying to paint those who supply the labor for their services as independent contractors even though they control wage rates and/or schedules. Doing so unfairly skirts labor law requirements about paying employment taxes and maintaining insurance coverage, so it’s far less costly for them to do it this way. But it puts the individuals doing the work at risk.
As a Forbes magazine article explained, “a question remains of whether workers understand what they’re letting themselves in for…(Working as an independent contractor leaves them) on the hook for tax withholding, financial risk from being hurt on the job, and liability coverage. Forget such worker protections as workers comp insurance, minimum wage payments, and overtime.”
It’s little surprise, however, that some of those companies are now facing legal challenges from the government and those who do the work that makes their businesses possible. HomeJoy has already folded as a result, and many others will likely follow.
Our approach may not have been the cheapest way to do business, but it is the right way, both ethically and legally. We wouldn’t – and won’t — change a thing.
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