Hiring Privately versus an Agency
At the end of the day, hiring privately, where you become the employer of a caregiver, could expose you to more liability, risk, and frustration than simply working with a great agency from the beginning.
Some of the reasons to use an agency:
| |
As an employer, you |
At an Agency, we will |
| Benefits |
are responsible for a variety of benefits such as paid sick days that will increase your costs. |
manage these benefits as part of our operations |
| Hiring/Firing |
spend time and money to find an appropriate caregiver and have to terminate them if it doesn’t work out. You might have a lapse in coverage. |
provide adequate background checks and support you to ensure a great match for your client |
| Finding a replacement |
be responsible for hiring a new caregiver. |
send an alternate and work to find the right match if the first caregiver was not the right fit |
| Unemployment Insurance claims |
have to fight the claim or have your EDD account cover the fees. Over time this will have an impact on your client’s costs. |
immediately offer that employee to work with another family and find a replacement at no cost to your client |
Below is a simple calculation to highlight the true cost difference between hiring privately and using an agency.
| Pay rate to self-hire |
(Approximate) |
$17.50 |
| FICA |
7.65% |
$1.34 |
| SUIER |
3.50% |
$0.61 |
| FUTA |
0.60% |
$0.11 |
| ETT |
0.10% |
$0.02 |
| Insurance, payroll, and other agency fees – Possible placement fees could be as high as 20% |
15.00% |
$2.63 |
| Your true costs |
|
$22.20 |
|
|
|
| Agency Fee |
$23.00 |
|
|
|
|
|
Agency Costs |
Costs to hire private |
| Five-hour shift |
$115.00 |
$110.99 |
| Eight-hour shift |
$184.00 |
$177.59 |
All this to save less than $10!!
Read more about the cost comparison between hiring privately and working with a home care agency
here, courtesy of the HCAOA. (Home Care Association of America)
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