Is the Companion, Roommate, or Respite Care Provider an Independent Contractor or Employee?
It has been commonplace for agencies and vendors to treat live-in companions, roommates and respite care providers as “independent contractors” rather than employees. This has the appeal of excusing the agency or vendor from providing certain insurances (e.g., health, workers’ compensation and unemployment), as well as responsibility for federal withholding and compliance with complicated wage and hour laws. Unfortunately, both the IRS and DOL (Department of Labor) apply rigorous tests in determining whether the employment relationship is really one involving an independent contractor or employee. The IRS uses a comprehensive 20 point test, focusing on a number of factors, including who exercises control, the nature of the business, length of employment agreement and payment method. DOL, on the other hand, employs a broader standard. Under the Fair Labor Standards Action (FLSA), an “employer” is defined as “any person acting directly or indirectly in the interest of an employer in rela
