Connecticut has established a task force to classify employees properly, protecting the benefits of workers and preventing companies from misinterpreting the rules covering independent contractors to gain an unfair advantage over the competition.
The objectives are twofold:
In some instances to prevent the public from being victimized by the failure of companies to disclose the hidden risks associated with obtaining certain personal services that may expose the buyer as an “unintended employer” or liable for damages or injury.
Secondly, in many instances, such mis-classification encourages an underground economy that negatively effects both governments and the public.
In today’s dramatically weaker economy, this collaborative initiative by the State Labor and Revenue Departments is important because of the probability of recovering Connecticut’s share of the billions of dollars in lost tax revenue for the financially strapped state and the federal governments...
The purpose is to clarify the meaningful distinction between people who work as employees as defined by the law and bona-fide independent contractors. We hope that as a byproduct of this enforcement that stricter rules may be enacted to require disclosure to the public of differences in the structure of home health care agencies that serve many of the elderly and disabled people of Connecticut. The differences primarily exist between employer-based agencies such as ours and others who are part of what is termed a registry model.
Let’s examine why the distinction is critical.
Employer-based agencies are service providers that deliver bona fide employees, compensated on a payroll, reporting earnings, withholding and matching employment taxes and covering Workers’ Compensation.
Registry models—in multiple forms--are catchalls for non-employees supplied under the guise of independent contractors, without payrolls, no taxes withheld or matched, no Workers’ Comp and for all practical purposes, the individuals are ineligible for unemployment insurance.
The potential for abuses that place employees and consumers at risk is distressingly evident in our industry, home care, furnished by the 13 members of the Connecticut chapter of the National Private Duty Association.
As registered, employer-based agencies, we serve thousands of Connecticut residents, a quality-committed trade association conforming to all reporting requirements and the conventional employer-employee relationship. At the same time, experience reveals that even accredited hospital personnel—medical, legal and financial professionals, planners and social workers—are sometimes unaware of the consequences of engaging a registry for home care.
As part of the discharge process, hospital patients are typically given a list of home care agencies without separating employer-based agencies from registry models, leaving the impression that all of the entities on the list are more or less equal.
That might lead to a decision largely based on cost, not always the most advantageous criteria to apply.
In such cases, for example, absent Workers’ Comp, in the event of injury to the care giver, homeowner’s insurance does not provide coverage for potential liability. Care-givers working under such an arrangement are, in some instances paid directly by the client who is also responsible for a separate fee paid directly to the registry.
This could leave the care-giver without benefits like paid sick leave, unemployment insurance and employer’s contributions to Social Security and Medicare.
Additional information is available on the NPDA Web site at www.ctnpda.org.
Ken Gurin is owner of Comfort Keepers of Shelton, an employer-based homecare business, and president of the NPDA Connecticut Chapter.
