Hiring Caregivers Under the Table: What are the Risks?

Can you save money in the short term by hiring a caregiver under the table?  Of course.  Is it worth all that can go wrong?  Probably not.


The client saves some time and hassle by paying an hourly wage without taking out taxes , known as paying “under the table” .   You, the client,  save more money while the caregiver takes home a bigger paycheck.  Simple and easy, right?  Well, consider the  numerous risks and hidden costs involved in paying a caregiver under the table.

Here are the dangers to consider before entering into an under-the-table arrangement.

1. You’re breaking the law

Scary, huh?

Employers who pay an employee under the table (or misclassify an employee as an independent contractor, do not pay their allotted taxes and avoid other payroll obligations) cause the loss of billions of dollars of  revenue to state governments.

When you hire an in-home caregiver, the IRS considers that person your employee if you pay her more than $1,800 in a calendar year. This means the IRS holds you responsible for withholding and paying taxes, which include income tax, Social Security, Medicare, and other state and federal taxes and benefits. Some families try to get around this by labeling a caregiver a “contractor,” in which case you file a W-9 recording the annual total of your caregiver’s wages, and she’s then responsible for paying taxes. However, few caregiver relationships meet the IRS’s definition of a contractor, and the government is cracking down on enforcing this issue. If you choose to go completely under the table, you and the caregiver together are defrauding the government of taxes and benefits. If you’re considering going this route, it’s a good idea to talk to an accountant or lawyer to learn about the legal and financial rules about hiring in-home help and the possible consequences of ignoring them.

2. You could pay more down the line.

As an employer, you were legally required to pay taxes for your employee. This means that if you get caught by the IRS, you’ll be responsible for paying back taxes, including interest and penalties. These taxes and penalties accrue each year, so if you hire a caregiver for several years, or if you get caught years later, or both, the penalties can be very steep. You might think there’s little chance of getting caught, but you’d be wrong. You can get caught during an audit of your taxes or as a result of a caregiver’s future actions, such as if she seeks unemployment compensation or in some other way reports the job.

3. An under-the-table caregiver is harder to verify.

Home-care agencies and most registries conduct background checks and use verification services to make sure caregivers don’t have a criminal history or any other issues you should know about. Often registries and agencies also check driving records and make sure caregivers have valid licenses. Many professional caregivers (who typically ask to be paid over the table) are also licensed and bonded, giving you the security of knowing that they’ve undergone professional training and that these checks have been performed. If you hire someone on your own, you’ll need to do all this yourself, and it’s unlikely the results will be as satisfying. Of course you’ll ask for and check references, but the less legal your arrangement, the greater the chance that your caregiver candidate could be padding her resume or faking references.

4. You’re not protected from disability claims.

Many professional caregivers are bonded and carry disability insurance in case of injury. Under-the-table caregivers are unlikely to come with these safeguards. If your caregiver is not bonded and insured, you could be liable if she gets hurt or disabled from an injury or accident she suffers on the job. By hiring under the table, you have little protection if she chooses to seek damages. Yes, it’s unlikely, since the fact that she agreed to an under-the-table agreement may prevent her from coming forward, but it has happened.

5. The risk of theft is higher.

Think about it — if your relationship with your caregiver is illegal, which means it’s in some sense secret, your caregiver knows there’s less chance that you’ll report abuse, theft, or other problems. The feeling of being able to “get away” with more can lead to serious problems down the line that you don’t want to deal with.

6. You may have to deal with high turnover.

According to geriatric care managers and other experts in senior care, caregivers hired under the table have much higher turnover than caregivers hired through agencies or registries, or even those hired independently but employed legally. It makes sense — there’s no paperwork to document the job, therefore no hassle to leaving and finding another. Without a contract or any legal agreement, you’re not protected from someone simply quitting with short or no notice. This is probably the least of your worries, given the seriousness of some of the issues above, but you don’t want a frail or ill loved one left without care available.

The cost of elder caregiving can be higher than any of us cares to pay.  But is it worth the fiscal and emotional punishments that can occur?  Probably not.

Does your caregiver certified by CertifiedCare.org? If not, you can help.  Students can finish in less than 1 week.  CertifiedCare offers 2 easy payment plans.  PayPal “Bill Me Later” and our own in-house zero interest & no credit check payment plan designed for those who do not qualify for conventional financing.

      “CertifiedCaregivers are better care givers”,

ranked #1 at


Original article by Melanie Haiken,   Edited by ElderCareAdvice


About Elder Care Advice blog

Get professional elder care giving advice, advocacy, education and tips for those who care for and about the frail elderly at the ElderCareAdvice blog. We are generously sponsored by CertifiedCare.org. Most posts are written by Cathleen V. Carr, unless attributed otherwise. We welcome relevant submissions. Submit your article and by-line for publishing consideration (no promises!) to Havi at zvardit@yahoo.com, our own editor who will ensure submissions are given the best possible treatment and polish before publication, ensuring a professional level of publication. There is a nominal service fee involved ($45). Allow up to 30 days for publishing.
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4 Responses to Hiring Caregivers Under the Table: What are the Risks?

  1. traceysl says:

    Here’s another issue: if you are spending down toward Medicaid, you will need to verify the expenditures made over the 5 years prior to application. If you’ve spent money on caregivers without any documentation, you can’t apply those expenses to your spend down. That ‘s another reason to do it legitimately.


  2. Yolanda Curd says:

    Thanks for the information . As an agency I do hire certified care givers , I also hire homemakers with no formal training. What type of certified training do you offer that can be completed in 1 week and what is the cost ?


    • Yolanda, CertifiedCare.org offers programs can students can complete in a day or a week- it’s up to them. People without pressure sometimes take longer, if they want. The complete professional caregiving certification program is only $449 and covers Family, professional, Alzheimer’s – Dementia, and special needs caregiving (bulk pricing available for 10 or more purchased at one time). Since our certifications last a lifetime and are transferable to other agencies, you might consider letting students be responsible for paying for their own education. We offer two zero interest payment plans (good credit or not good redit)http://www.certifiedcare.org/index.php/certification/complete-caregiver-certification. Please visit the CertifiedCare.org website for lots of information.
      Hope that helps and thanks for communicating with us.
      Come back real soon!


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