Recognizing the Risks of Hiring

a Caregiver Privately for Home Care

What New York families should know about caregiver employment, payroll taxes, workers’ compensation, disability and Paid Family Leave, overtime, background screening, supervision and accountability — before arranging care at home.

Last reviewed: September 2026 ~14 min read

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Hiring a caregiver privately in New York can make you a household employer under federal and state law — even if you call the caregiver an independent contractor. Depending on hours and pay, that can trigger payroll taxes, minimum wage and overtime rules specific to home care aides, workers’ compensation, Disability Benefits and Paid Family Leave, and I-9 employment-eligibility requirements. It can also leave your family solely responsible for screening, supervision and backup coverage. None of this makes private hiring illegal — it just means the obligations are real, and worth understanding before care begins.

IN THIS GUIDE

When someone you love needs help at home, finding the right caregiver quickly becomes the family’s most immediate concern. Is the caregiver experienced? Compassionate? Reliable? Will Mom or Dad feel comfortable with them?

Those questions matter enormously. But there is another question families can easily overlook: who is actually employing the caregiver? The answer can carry real legal, financial and practical consequences.

A caregiver hired privately may become the household’s employee under federal and New York law — even when the family informally considers the caregiver an “independent contractor,” pays the caregiver directly, or found them through a friend, neighbor or referral. This guide explains the major risks New York families should understand before hiring a caregiver privately, and the questions worth asking when comparing private employment with care through a licensed home care agency.

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Is a privately hired caregiver a household employee?

Sometimes, yes. Consider a common arrangement: a family hires someone to help an older parent with bathing, dressing, meals, mobility, companionship and other daily activities. The family sets the caregiver’s schedule, decides what needs to be done and directs how the work is performed.

Under IRS rules, those facts may establish a household employer–employee relationship. The IRS explains that a household worker is generally an employee when the person hiring them can control both what work is done and how it is done — regardless of whether the work is full-time or part-time, or whether wages are paid hourly, daily, weekly or by the job.

A genuinely self-employed worker is different: they generally control how the work is performed, provide their own tools, and offer services to the general public through an independent business. Simply agreeing to call a caregiver an “independent contractor” — or issuing a 1099 — does not make it so. Worker classification depends on the actual relationship, and families who are uncertain should consult an employment or tax professional rather than relying on a label.

For the federal rules, see IRS Publication 926, Household Employer’s Tax Guide.

The 10 major risks families should understand

1. You may become responsible for household employment taxes

For 2026, if a household employer pays an individual household employee $3,000 or more in cash wages during the year, Social Security and Medicare taxes generally apply — a combined 15.3%, split 7.65% employee / 7.65% employer.

Federal unemployment tax (FUTA) has a separate trigger: a household employer who pays $1,000 or more in total cash wages in any calendar quarter of 2025 or 2026 may owe FUTA for 2026. State unemployment requirements can apply on top of that.

Depending on the circumstances, responsibilities can include Social Security and Medicare taxes, unemployment taxes, payroll records, wage reporting, employment eligibility verification, Form W-2 and Schedule H reporting, and applicable New York obligations. The IRS warns that an employer who fails to withhold and pay required household employment taxes generally remains liable for those taxes, plus interest and penalties. Paying a caregiver “off the books” does not eliminate the employment relationship or its obligations.

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2. New York has a separate minimum wage for home care aides

New York’s general minimum wage is not the number that applies to most home care arrangements. For work performed beginning January 1, 2026, the NY Department of Labor sets the home care aide minimum wage at:

$19.65/hour — New York City, Long Island and Westchester County
$18.65/hour — the remainder of New York State

New York defines “home care aide” broadly under Public Health Law §3614-f — it can include home health aides, personal care aides, home attendants and other licensed or unlicensed workers whose primary responsibility includes help with daily living, instrumental daily living, or health-related tasks, subject to statutory exceptions.

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3. Overtime can become a significant expense

Home care often starts small and grows. Four or six hours a day can expand to eight, ten or twelve, or add weekends and overnights, as an older adult’s needs increase.

New York’s Domestic Workers’ Bill of Rights generally provides overtime at 1.5× the regular rate after 40 hours in a workweek — or after 44 hours for qualifying live-in workers. A flat daily or weekly payment does not, by itself, eliminate minimum-wage or overtime obligations. This becomes especially important when an informal arrangement gradually turns into full-time care.

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4. New York’s “spread of hours” rule may create additional pay

Home care aides may be entitled to spread-of-hours pay when the span of their workday exceeds 10 hours — an additional hour of pay at the applicable minimum wage. “Spread” means the interval between the start and end of the workday, including working time plus certain meal or off-duty periods, which is not necessarily the same as hours actively worked.

Long, split, overnight and live-in schedules can make this calculation genuinely complicated. Families using those schedules should get advice specific to the arrangement rather than assuming an hourly rate times “active work hours” satisfies New York wage law.

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5. Workers’ compensation can become the household’s responsibility

Caregiving is physical work — assisting with transfers, bathing, mobility, and intervening when someone begins to fall. Even excellent caregivers can be injured.

The NY Workers’ Compensation Board generally requires household employers to carry workers’ comp coverage when a domestic worker — a category that explicitly includes home health aides, nurses and companions — is employed 40 or more hours per week by the same employer. Time at the residence can count toward that total when the employer requires the worker’s presence, including certain sleeping and eating time, plus errands or duties performed away from the residence.

Don’t assume homeowners insurance covers this. The Workers’ Compensation Board expressly states that domestic or household workers are not covered under the workers’ compensation rider of a homeowner’s insurance policy (NY Insurance Law §3420(j)). Confirm coverage before the caregiver begins working, not after an injury occurs.

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6. Disability Benefits and Paid Family Leave can apply at a lower hours threshold

New York sets a separate, lower bar for these two coverages. Per the Workers’ Compensation Board, Disability Benefits and Paid Family Leave coverage is generally required once a domestic worker — again including home health aides, nurses and companions — works 20 or more hours per week for the same employer and 30 or more days in a calendar year for that employer.

It’s easy to conflate this with workers’ comp, but the two triggers are different: 20+ hours/week for DB & PFL, versus 40+ hours/week for workers’ comp. See the comparison table below.

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7. New York domestic workers have additional employment rights

The Domestic Workers’ Bill of Rights goes beyond wage and overtime rules. Covered domestic workers are generally entitled to:

One 24-hour day of rest every seven days (a worker can agree to work it, but overtime pay is required for those hours)
Three paid days of rest each year after one year working for the same employer
Protection under the NY State Human Rights Law, including protections against certain harassment and retaliation

Domestic employers must also provide written information about the agreed pay rate, overtime rate and payday; give employees written wage statements; and keep accurate daily and weekly time records. These are employment responsibilities, not simply home care considerations.

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8. Employment eligibility verification is an employer responsibility

IRS Publication 926 requires a household employer to determine whether a household employee can legally work in the United States, and to complete the employer portion of Form I-9 after examining the employee’s documentation. The completed I-9 stays in the employer’s own records; it isn’t filed with the IRS. A caregiver referred by a friend, neighbor or another caregiver doesn’t itself satisfy this requirement — an employee working inside your home can still be your employee.

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9. Screening a caregiver is more than a background check

A caregiver may spend more time alone with an older adult than almost anyone outside the immediate family, with access to the home, medications, mail, finances and valuables. Screening matters enormously — identity, employment eligibility, training, credentials, employment history, references and competency all deserve real evaluation.

New York also maintains a Home Care Registry with limited information on Home Health Aides and Personal Care Aides who completed state-approved training. But screening only tells a family about the person they’re hiring today. The next question matters just as much: who is overseeing the caregiver tomorrow?

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10. Private employment can leave the family responsible for supervision, backup and accountability

An older adult’s needs rarely stay static. Someone who initially needs companionship may eventually need help with bathing, transfers or mobility as cognitive impairment progresses, fall risk increases, or medications change. A privately employed caregiver may have no separate supervisor evaluating any of that.

There’s also an immediate, practical question: what happens when the caregiver doesn’t show up? Illness, vacation, a family emergency or an unexpected resignation can turn a missed shift into an urgent care problem for someone who can’t safely be left alone. Every private-care arrangement needs a realistic backup plan.

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Coverage thresholds at a glance

Two of the most commonly confused New York requirements are the hours thresholds for insurance coverage. They are not the same number:

New York household-employer coverage thresholds for domestic workers, including home health aides, nurses and companionsCoverageTriggerSourceDisability Benefits & Paid Family Leave20+ hours/week for the same employer, and 30+ days worked in a calendar yearNY Workers’ Compensation BoardWorkers’ Compensation40+ hours/week for the same employerNY Workers’ Compensation BoardFederal Social Security & Medicare (FICA)$3,000+ in cash wages paid to one employee in 2026IRS Publication 926Federal Unemployment Tax (FUTA)$1,000+ in cash wages in any calendar quarter of 2025 or 2026IRS Publication 926Overtime (1.5× regular rate)Over 40 hrs/week (live-out) or 44 hrs/week (live-in)NY Domestic Workers’ Bill of Rights

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Financial exploitation, elder abuse and the importance of oversight

Most professional caregivers choose this work because they genuinely want to help people. Responsible home care planning, however, has to account for risks families hope never occur. Older adults — particularly those experiencing dementia or other cognitive impairment — can be vulnerable to neglect, manipulation, financial exploitation and abuse.

The answer is not to distrust caregivers. The answer is accountability: knowing who monitors the care, who receives complaints, how concerns are investigated, how incidents are escalated, and what happens when a caregiver needs to be removed from an assignment. The less able an older adult is to independently report what’s happening in the home, the more that oversight matters.

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Privacy, boundaries and access to the home

Caregivers work inside one of the most private environments imaginable, with potential access to medications, medical information, checkbooks, credit cards, mail, computers, passwords, keys and valuables. Establishing clear boundaries and safeguards before care begins protects both the person receiving care and the caregiver.

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Private caregiver vs. licensed home care agency

Hiring privately can look less expensive because the hourly rate paid directly to a caregiver may be lower than an agency’s hourly rate. But comparing hourly rates alone doesn’t necessarily compare the same thing.

A family’s real cost of private employment can include the caregiver’s wages plus employer payroll taxes, unemployment obligations, workers’ compensation when required, Disability Benefits and Paid Family Leave coverage when required, overtime, spread-of-hours pay when applicable, payroll administration, and whatever recruiting, screening, scheduling, supervision and backup staffing the family chooses or is required to arrange itself. An agency rate may already fold many of those responsibilities in, depending on the provider.

In New York, the distinction matters legally, too: the Department of Health requires an organization to be licensed or certified by NYSDOH to provide or arrange home care services in the state. Licensed Home Care Services Agencies (LHCSAs) provide home care including to people paying privately or using private insurance. Not every agency is the same — families should evaluate the agency, not just the arrangement type.

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Questions every family should ask

Before choosing either path, a family should be able to get clear answers to:

Who is the caregiver’s legal employer?
Who pays and reports payroll and unemployment taxes?
Is the caregiver classified as an employee or independent contractor — and what supports that classification?
Who is responsible for workers’ compensation coverage when required?
Who provides Disability Benefits and Paid Family Leave coverage when required?
Who is responsible for minimum wage, overtime and spread-of-hours compliance?
Who maintains payroll and employment records, and how is employment eligibility verified?
How are the caregiver’s identity, references, credentials and qualifications verified?
Who supervises the caregiver after care begins, and who notices when the client’s needs change?
What happens if the scheduled caregiver calls out, becomes ill or resigns?
How are complaints and incidents investigated and escalated?
Who can the family reach outside normal business hours?
What insurance protects the caregiver, the client and the household?

A professional home care provider should be able to answer every one of these clearly and specifically.

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Frequently asked questions

Is a private caregiver automatically an independent contractor?

No. Whether a caregiver is an employee or independent contractor depends on the actual working relationship, not the label the parties use. Under IRS guidance, a worker is generally a household employee when the household controls both what work is performed and how it is performed.

Can I simply give my caregiver a 1099?

Issuing a 1099 doesn’t by itself make someone an independent contractor. Families should determine the worker’s proper classification based on the actual circumstances and get professional tax or legal advice when uncertain.

Do I have to pay payroll taxes for a private caregiver?

Potentially. For 2026, Social Security and Medicare taxes generally apply once a household employer pays an individual household employee at least $3,000 in cash wages during the year. FUTA has a separate $1,000-per-quarter household-payroll threshold, and New York obligations may also apply.

What is the minimum wage for a home care aide in New York in 2026?

Effective January 1, 2026, qualifying home care aides must generally receive at least $19.65/hour in New York City, Long Island and Westchester County, and $18.65/hour in the rest of New York State.

Does a private caregiver get overtime in New York?

Covered domestic workers generally receive overtime at 1.5× their regular rate after 40 hours per week — or after 44 hours for domestic workers who live in their employer’s home.

Do I need workers’ compensation for a caregiver in my home in New York?

New York generally requires workers’ compensation coverage when a domestic worker — including home health aides, nurses and companions — is employed 40 or more hours per week by the same household employer. Circumstances vary, so confirm your obligations with the NY Workers’ Compensation Board or a qualified insurance professional.

Do I need Paid Family Leave or disability coverage for a private caregiver?

New York generally requires Disability Benefits and Paid Family Leave coverage when a domestic worker works 20 or more hours per week for the same employer and 30 or more days in a calendar year for that employer.

Does homeowners insurance cover a privately employed caregiver’s workplace injury?

Don’t assume it does. The NY Workers’ Compensation Board specifically states that domestic and household workers are not covered under a homeowners policy’s workers’ compensation rider. Verify all applicable coverage before a caregiver begins working.

Is hiring a caregiver privately illegal?

No. A family can employ a caregiver directly. The key issue is understanding and complying with the employment, wage, tax and insurance obligations that apply to that particular arrangement.

Is using a licensed home care agency automatically better than hiring privately?

Not necessarily — families should evaluate the specific provider and the needs of the person receiving care. But structurally, when an agency is the caregiver’s employer, it can assume the employment, payroll, insurance, staffing, screening, supervision and administrative responsibilities that would otherwise fall entirely on the household.

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Talk through your family’s options

For families considering private-pay home care or comparing an agency with hiring privately, our team can walk through how agency-based care works, which responsibilities the agency assumes, and what to ask any provider before you decide.

Call 7 Day Home Care: 516-408-0034

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Official resources for New York families

IRS Publication 926 — Household Employer’s Tax Guide (2026)
Household employee status, FICA/FUTA, Form W-2, Schedule H, I-9 requirements
NYS Department of Health — Home Care Information for Consumers
LHCSAs, Certified Home Health Agencies and the Home Care Registry
NYS Department of Labor — Domestic Workers’ Bill of Rights
Overtime, day of rest, paid days off, Human Rights Law protections
NYS Department of Labor — Minimum Wage for Home Care Aides
Current regional minimum wage rates for home care aides
NYS Workers’ Compensation Board — Household Employer Coverage Requirements
Workers’ compensation rules for domestic workers
NYS Workers’ Compensation Board — Disability & Paid Family Leave Requirements
DB and PFL coverage rules for domestic workers

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7 Day Home Care is a New York State Licensed Home Care Services Agency serving families throughout Manhattan, Queens, Brooklyn, Nassau County, and Suffolk County.

This resource is provided for general educational purposes and is not legal, tax, employment, insurance or financial advice. Laws and regulations can change, and how these requirements apply depends on the facts of each employment and care arrangement. Families employing caregivers directly should consult appropriate legal, tax and insurance professionals about their individual obligations. Figures reflect New York State and federal rules in effect as of September 2026 and are subject to change.