Medical Forum / Diseases and Disorders / Arthritis / February 2008
Written Contract for CNA?
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Sammy bin Snoozin - 12 Nov 2007 17:56 GMT Hello again folks,
It's coming up on tax time and I have been told by the NC state employment security dept that we need a written contract between us and our CNA to prove to the state that she is indeed a contractor. Both she and I have understood this since she started this summer, but we don't know where to get a contract form to use as a guide.
I would appreciate any info from anyone who has a contract with a CNA or for similar home-help personnel.
Thanks.
Sam
jofirey - 12 Nov 2007 19:52 GMT > Hello again folks, > [quoted text clipped - 10 lines] > > Sam Sounds like you may be out of luck. The presumption is that she is an employee unless you can prove otherwise.
If she is in fact a contractor it would certainly be up to her to provide the contract at the time of its inception.
Note: You cannot turn an employer-employee relationship into a contract relationship just by saying so. If the only contract she has is with you, that is a very strong argument for an employer, employee relationship.
In case you think I'm just being difficult, it is against public policy for someone to give up their rights as an employee. Such as the right to workers compensation coverage and the right to unemployment coverage. They would also be giving up the right to matching SS funds.
All those things are in place not only for their protection but also to prevent those liabilities from falling to the public sector.
Someone waives their right to unemployment or workers comp and ends up on welfare etc, it costs me and everyone else.
Jo
Sammy bin Snoozin - 15 Nov 2007 01:51 GMT > > Hello again folks, > > [quoted text clipped - 33 lines] > > Jo Thanks, Jo, but this is not the case. A verbal contract is still a contract. I had to deal with this kind of situation in a non-nursing situation. Both parties understood the contractor relationship from the beginning. The state employment dept (another state) queried us (employer) about it. I explained the situation and the contractor and I wrote up an agreement, signed in and mailed it in, and no problem.
Ernie Jones - 12 Feb 2008 06:00 GMT I will be signing on a CNA to come to a relative's house every other day and do basic caregiving and light housekeeping and yard work.
From studying IRS publication 926, "Household Employer's Tax Guide," I believe that the working relationship between my uncle and the CNA is a contract relationship and not an employer-employee relationship.
The reason I believe this is that the publication states, "The worker is your employee if you can control not only what work is done, but how it is done."
From my conversations with the CNA and my uncle, I do not believe that this applies to their situation, because the CNA has an ongoing general objective, which is to care for my uncle, and the CNA achieves that objective using skills that the CNA learned in training as a certified nursing aide rather than following instructions that my uncle has given to the CNA.
In a contract relationship, the payer is not required to withhold taxes or social security from payments made. The only requirement is for the payer to issue a 1099-MISC form to the payee and to file the appropriate forms with IRS by the end of February.
Ernie Jones - 12 Feb 2008 06:06 GMT Another question -- if considered a household employee, would the employer/homeowner need to purchase worker comp insurance?
I will be signing on a CNA to come to a relative's house every other day and do basic caregiving and light housekeeping and yard work.
From studying IRS publication 926, "Household Employer's Tax Guide," I believe that the working relationship between my uncle and the CNA is a contract relationship and not an employer-employee relationship.
The reason I believe this is that the publication states, "The worker is your employee if you can control not only what work is done, but how it is done."
From my conversations with the CNA and my uncle, I do not believe that this applies to their situation, because the CNA has an ongoing general objective, which is to care for my uncle, and the CNA achieves that objective using skills that the CNA learned in training as a certified nursing aide rather than following instructions that my uncle has given to the CNA.
In a contract relationship, the payer is not required to withhold taxes or social security from payments made. The only requirement is for the payer to issue a 1099-MISC form to the payee and to file the appropriate forms with IRS by the end of February.
Thumper - 12 Feb 2008 21:12 GMT >I will be signing on a CNA to come to a relative's house every other day and do basic caregiving and light housekeeping and yard work. > [quoted text clipped - 5 lines] > >In a contract relationship, the payer is not required to withhold taxes or social security from payments made. The only requirement is for the payer to issue a 1099-MISC form to the payee and to file the appropriate forms with IRS by the end of February. Talk to your accountant. Thumper
california_chief - 12 Nov 2007 23:12 GMT > It's coming up on tax time and I have been told by the NC state > employment security dept that we need a written contract between us > and our CNA to prove to the state that she is indeed a contractor. > Both she and I have understood this since she started this summer, > but we don't know where to get a contract form to use as a guide. Try a stationery store. Perhaps a legal book store.
Hint: Most contracts are written by lawyers who know the terminology to include in a contract to protect your butt in case anything happens.
Candide - 13 Nov 2007 12:30 GMT > Hello again folks, > [quoted text clipped - 10 lines] > > Sam This has nothing to do with nursing. Contact a qualified attorney or at the very least take your query over to a legal newsgroup.
Candide
Sammy bin Snoozin - 15 Nov 2007 01:51 GMT Go fly a kite.
> > Hello again folks, > > [quoted text clipped - 15 lines] > > Candide Paul T. Holland - 13 Nov 2007 23:10 GMT take a look at a sample(s) of business to individual agreement:
http://www.toolkit.com/tools/bt.aspx?tid=indcon_m http://www.lectlaw.com/forms/f050.htm http://www.procopio.com/pdfs/sample2.pdf
here is a sample health aide 'employee' form:
http://allbusiness.legalzoom.com/human-resources/workforce-management-hiring-spe cifying/11300-1.html
but i must caution you - the actual definition of an independent contractor [person not incorporated] is that individual who renders 'a' service 'to' another person or entity,
but does so at a time, location, and methodology of their own choosing.
i.e.: if they [the purported contractor] 'must' report to a specific location, at a specific time, for a specific duration,
and, be under the direct supervision of that person or entity that has engaged them,
then they are 'not' a contractor, but an employee.
it is possible that the state won't look very deeply at this - but...under irs rules, you would have to be precise to qualify.
here is a bit of what is involved:
24. The Supreme Court of the United States held that the term "usual common law rules" is to be used in a generic sense to mean the "standards developed by the courts through the years of adjudication." United States v. W.M. Webb, Inc., 397 U.S. 179 (1970). In Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966), the Supreme Court of Florida adopted the tests in 1 Restatement of Law, Agency 2d Section 220 (1958) used to determine whether an employer-employee relationship exists. Section 220 provides:
(1) A servant [health aide, gardener, etc] is a person employed to perform services for another and who, in the performance of the services, is subject to the other's control or right of control.
(2) The following matters of fact, among others, are to be considered:
(a) the extent of control which, by the agreement, the business may exercise over the details of the work;
(b) whether the worker is in a distinct occupation or business;
(c) whether the type of work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required;
(e) who supplies the place of work, tools, and materials;
(f) the length of time employed;
(g) the method of payment;
(h) whether the work is part of the regular business of the employer;
(i) whether the parties believe the relationship is independent;
(j) whether the principal is in business.
In order to determine whether a worker is an employee or an independent contractor under the common law, the relationship between the worker and the business must be examined and all evidence of control and independence must be considered. All evidence of the degree of control and the degree of independence must be weighed. All factors enumerated in 1 Restatement of Law, supra, must be considered.
In such an analysis, special emphasis should be placed on the extent of free agency of the worker in the means and manner of performing the work. This element of control is the primary indicator of the status of the working relationship.
take a look at this list:
The individual clearly understands in writing that no taxes are to be withheld from her pay and that she is not entitled to employee fringe benefits.
She is free to refuse work assignments, and she determined her own work schedule.
The rate of pay was negotiable.
She was not supervised, trained, or controlled by the [entity contracting services].
The individual is solely responsible for obtaining and maintaining any required [by local or state government] certification.
> Hello again folks, > [quoted text clipped - 10 lines] > > Sam Sammy bin Snoozin - 19 Nov 2007 18:14 GMT Thanks very much Paul. This jives with the story I got from the state EDD but I couldn't find anything specific. This is a great help.
One question about...
> but does so at a time, location, and methodology of their own choosing. The hiring party can define the scope of work, with a beginning and an end, and it's up to the contractor to figure out the best way to do it.
But can't the hiring party can approve or disapprove of location, time and methodology and still have a contractor arrangement if there are legimate reasons? For example, if you hire a contractor to build a house, he can't do it from his location. Same for caring for a person who can't leave the house.
> take a look at a sample(s) of business to individual agreement: > [quoted text clipped - 3 lines] > > here is a sample health aide 'employee' form: http://allbusiness.legalzoom.com/human-resources/workforce-management-hiring-spe cifying/11300-1.html
> but i must caution you - the actual definition of an independent > contractor [person not incorporated] is that individual who renders 'a' [quoted text clipped - 65 lines] > In such an analysis, special emphasis should be placed on the extent of > "free agency" of the worker in the means and manner of performing the
> work. This element of control is the primary indicator of the status of > the working relationship. [quoted text clipped - 30 lines] > > > > Sam Paul T. Holland - 20 Nov 2007 21:00 GMT hey sbs
> Thanks very much Paul. This jives with the story I got from the state > EDD but I couldn't find anything specific. This is a great help. [quoted text clipped - 12 lines] > legimate reasons? For example, if you hire a contractor to build a > house, he can't do it from his location. in theory yes, but the example you give would be for a 'licensed' contractor usually [but not always] a 'sub-s', 'corp.' or 'llc' entity who would have responsibility for any subs, workers, etc. - including their own status as a worker - this is called a 'prime' trade contractor
> Same for caring for a person > who can't leave the house. ah - not really the same - this is 'personal' service. as opposed to 'trade' service
in context, 'you' are the prime contractor and while the location is understood to be predetermined, the actual work - start, stop, oversight, etc. is of necessity directly overseen - no real independence - unless there is an understood flexibility.
remember - each state has their own criteria, which may or may not be in sync with the federal rules.
another thing to not overlook:
nobody is going to care about all those individuals who hire someone to perform a single task - a 'one-off' situation, that is totally diff. from an 'on-going' relationship.
bottom line, the rules exist because so many 'hires' never report earnings, and/or to protect those hires from abusive employers taking advantage...
do a great number go 'grey market' off the books? sure - how many get caught? no one really knows...
and you should also be aware of any potential liability issues where the hired person, working in your location, has a slip and fall or other like occurrence - would your homeowners [or renters] insurance cover them since there is an employer relationship? in a normal job scenario, there would be workman's comp insurance for just such a problem. a large percentage of folks in these jobs don't have health insurance themselves...
hth
paul
> > take a look at a sample(s) of business to individual agreement: > > [quoted text clipped - 132 lines] > > > > > > Sam
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