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socrateaser, Lawyer
Category: California Employment Law
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Experience:  Retired (mostly)
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Socrateaser, you answered an employment question for me that

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Socrateaser, you answered an employment question for me that expressed California Employment Law. Does this translate completely to the State of New Mexico? I reside in New Mexico. I need information that applies to New Mexico Employment laws.

In Harger v. Structural Services, Inc., 916 P. 2d 1324 (NM 4/17/1996), the New Mexico Supreme Court writes:

  • In defining the term "independent contractor," we adopt the approach taken in Restatement (Second) of Agency Section 220, "Definition of Servant" (distinguishing servants from independent contractors for purposes of tort liability). Further, Section 2 defines an independent contractor as "a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking.

As can be seen from the above definition, the right-to control the worker's physical conduct is the dividing line between an employment or independent contractor relationship. If you are prepared to to enter into a contract with the caregiver under which it is agreed that the caregiver can undertake his/her duties with regard to the care of your mother in any manner that the caregiver sees fit, and that your only interest in such care is that your mother is maintained in a reasonably comfortable manner, then you could have an independent contractor relationship with the caregiver.


However, you could also be found to have engaged in elder abuse, if the caregiver fails to provide reasonable care -- because you would be effectively setting up conditions under which you would be ceeding your authority and responsibility for your mother's care to an unlicensed third party.


If your caregiver is a Certified Nurse Aid, and has successfully passed the Caregiver Screening Program, then maybe that would help demonstrate the sort of necessary independence to confirm an independent contractor relationship. However, again, in my experience, none of these things are particularly impressive to the Internal Reveune Service -- because the government has a very strong incentive in trying to transform everyone into an employee. All I can say is that it's always a dicey issue, many people ignore it entirely, and simply take their chances that the caregiver won't create a problem, freqeuently caregivers are not only unlicensed, have no criminal background check, but also are undocumented aliens who operate "under the radar," and while they may be very good at what they do, they may also be a ticking time bomb, waiting to explode in the face of the "employer."


I'd really like to give you a perfect workaround, but there isn't any. The old saying, "Ya pays yer money and ya takes yer chances," is fully applicable here.


Hope this helps.

Customer: replied 3 years ago.

OK. It all gets clearer and muckier all at once. I read that if one is self-employed, one is responsible for oneself in all aspects of being in and around a person or their property (re: their own health and well being) and that this type of hire is the most reasonable situation or solution if one does not desire becoming an employer. Then we have the Feds. Then we have human nature. I have an agency who is free to guide their employees however they wish. My comeback has been I wish to have the more reliable persons in our home regularly. Nevertheless, unless they desire to make the MONEY, we are subject to a constant stream of strangers. They usually do not provide nursing on a daily basis. Which prompts one to feel the strain of providing responsible care for ones relative. The only relief is not being an employer. We are still reliant on their screening their employees and their particular choices. What say you?

If you are stating that the agency is acting as the employer, and you are not getting the sort of help upon which you can rely, then your only recourse is to advertise for a caregiver and employ them yourself. This will cost you more money. If you don't want to be the employer, then you could hire a registered nurse, and pay a lot more money -- but, you would have a professional who could be viewed as sufficiently independent and skilled to avoid being deemed an employee.

I don't really know your circumstances sufficiently to make a recommendation about a particular level of care. I have had a lot of success with "board and care" facilities, which are homes with only a few residents, but which are not considered full-care institutional facilities for Medicaid purposes. But, if you absolutely must have in-home care, then you have to balance the cost of such care with the caregiver qualfications and your risk of being deemed an employer -- unless you hire a sufficiently skilled professional who is willing to set up their own corporation to employ themselves.

Hope this helps.
Customer: replied 3 years ago.

I do plan to propose this to an RN. I just hope that I can have a caregiver without repercussion. Mother will only get temporary care from Medicare and then the private pay kicks in on the 21st day in an institution. The cost so far has been comparable and at times less to have in-home care. I think as she progresses, we will be able to tailor her care to where it is consistently less than an institution's. So my final question is: Would I be legally responsible if I were to purchase service from a self-employed caregiver (not an independent contractor).

I think you may still be misunderstanding the legal terminology.

A worker is either an independent contractor or an employee. There is no third category, no matter how described.

Self employment is equivalent to being an independent contractor. However, just because someone calls themselves, "self employed," does not mean that they actually are self employed. The actual determination is made by the government -- and, if there is a dispute, then by the court. A person is an independent contractor, only if the court determines that the person has the right to control the means and methods of his or her labor. Most self employed persons are only independent because they have never filed a complaint to have the government or court determine their actual status.

The legal fact is that most people are employees -- very few are independent contractors.

A person who calls him/herself self employed, can become their own employee, by incorporating their business and then employing themselves through their corporation. By doing this, the person relieves the customer (you) from the possibility of being hit with the potential fines for misclassifying a worker as an independent contractor.

So, if you find a caregiver that you really like, and you want to hire them without risk, then that person could incorporate their business and employ themselves.

However, there is one catch with this: The typical caregiver is not business savvy enough to incorporate and then pay their own payroll taxes to the government. It's expensive to do so, and inevitably the caregiver will simply not follow the legal requirements. The result will be that you will pay this person's business, and the person will simply take the money and pocket it without remitting payroll taxes. And, the result of this will be that the government may determine that this was all a sham to avoid your being deemed the employer, with the bad result, again falling to you.

Ultimately, this leaves you with five choices:

1. Close your eyes, hire who you want, pay them without considering the liabilities, and pray that nothing goes wrong;
2. Hire someone under an independent contractor agreement, and hope that they don't come back and decide that they were a misclassified worker, and report it to the government.
3. Hire someone through an agency, and pay the agency to treat the person as an employee, so you aren't liable for the employment taxes.
4. Hire a person as your employee and pay their employment taxes.
5. Hire a person who is sufficiently motiviated and business savvy to be able to incorporate themselves and pay their own employment taxes. Audit that person's books routinely to make certain that they actually are paying their employment taxes.

Hope this helps.
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