Changes in the Law - Home Care: Now What?
Ron Stormoen
By now many in the home care industry have heard about recent California and Federal laws which may drastically impact how home care companies operate.
This is the second of two articles. Article 1 summarized some significant changes. This Article provides some possible alternative contractual/care arrangement for home care companies, their employees and the care recipients to consider.
If the traditional in home care company model has now become too expensive for the home care company and/or the care recipient, is there an alternative? An employment type agency model may provide an alternative. As with any legal discussion, you should consult an attorney to determine whether an alternative is right for you.
I. THE VARIOUS MODELS DISCUSSED (THE CONTEXT)
When considering alternative home care placement agencies (distinct from the employer – employee model), there are essentially four models (and possibly variations of each) to evaluate. The following four are identified and defined and then some various questions are posed and answered.
As discussed below, the primary issue arising with these models, and the risks created, is whether the workers have been misclassified(as independent contractors when they should have been employees or employees of the care recipient when they should have been classified as employees of the company).
Certainly, as discussed below, there are other operational issues and risks, but the potential for misclassification seems to trigger audits, investigations and claims in this area.
The four potential models when considering a homecare referral or placement company are:
a. Employment Agencies, under the Employment Agency Act (California Civil Code §§ 1812.500 – 1812.5095);
b. A registry (typically of skilled workers, such as nurses) (California Civil Code §§ 1812.524 – 1812.533);
c. Job listing service (California Civil Code §§ 1812.502(c), 1812.502 (f)(1), 1812.515, et seq); and,
d. General placement agencies.
A. Employment Agency
1. Defined
According to Civil Code section 1812.501, an employment agency is defined as follows:
“(a)(1)(A) Any person who, for a fee or other valuable consideration to be paid, directly or indirectly by a jobseeker, performs, offers to perform, or represents it can or will perform any of the following services:
(i) Procures, offers, promises, or attempts to procure employment or engagements for others or employees for employers.
(ii) Registers persons seeking to procure or retain employment or engagement.
(iii) Gives information as to where and from whom this help, employment, or engagement may be procured.
(iv) Provides employment or engagements.
(B) Any person who offers, as one of its main objects or purposes, to procure employment for any person who will pay for its services, or that collects dues, tuition, or membership or registration fees of any sort, if the main object of the person paying those fees is to secure employment.
(C) Any person who, for a fee or other valuable consideration, procures, offers, promises, provides, or attempts to procure babysitting or domestic employment for others or domestics or babysitters for others.
(2) ‘Employment agency’ or ‘agency’ shall not include any employment counseling service or any job listing service.”
. . .
This is a very broad statutory definition which will sweep in many of the placement models.
It should be noted that while, in general, a company may be exempt from the Employment Agency Act when it charges fees exclusively to employers for the services, the exemption does not apply (regardless of how fees are paid) to homecare agencies: that is, agencies who provide “domestic employment,” which includes, per statute, “employment by placement of domestic help in private homes.” (California Civil Code § 1812.501(h).)
There are criminal penalties and civil remedies associated with violations of the Act, so, if you venture into this area, it is important to make sure the company complies. (California Civil Code § 1812.523, et seq.) These are noted but not discussed herein. Also, as a further aside, if the company falls into this employment agency category, its name must include either “agency” or “personnel service.” (California Civil Code § 1812.508, et seq.)
2. A Particular Company Example (demonstrating the employment agency model, how an audit may arise and how the company may find protection by strict compliance)
As a helpful aside, below is one fairly recent court case, which provides guidance in this area—more for what to do, rather than what not to do, and it shows what can happen (government agency audits).
In An Independent Home Support Service, Inc. v. Superior Court (2006) 145 Cal.App.4th 1418) the entity provided a referral service to individuals and entities that required the services of a domestic worker, typically for an elderly or infirm family member. The company had a roster of between 100 and 150 domestic workers (including homecare givers). Either through referral from hospitals, assisted living facilities, or from a patient directly, a patient (or representative) would call the company and the company would then refer a domestic worker on its roster for an interview with the patient.
The domestic worker was free to accept or decline the engagement and negotiate the hourly rate of pay. The domestic worker submitted biweekly invoices to the company, which were then approved by the care recipient. The company was responsible for collecting sums due the domestic worker from the care recipient. Receipts were deposited in a separate dedicated trust account, and the domestic worker was paid from this account. The company had three “in-office” staff assisting with the administrative work.
At some point the company was investigated by the Department of Labor Standards Enforcement (probably because of a complaint by a disgruntled “in-office” employee), which determined that two of the company’s “in-office” staff should have been but were not covered by worker’s compensation insurance. The company then obtained said insurance from State Fund, who thereafter performed an “underwriting inspection” and determined that all the domestic workers were employees and should have been covered by worker’s compensation insurance.
The company thereafter challenged that determination, taking the position that the workers were independent contractors, and the lawsuit ensued.
The court held that the company’s compliance with the Employment Agency Act (cited above and discussed below) exempted the company from maintaining worker’s compensation insurance for its domestic workers. The court further found that the requirements of the Act concerning how the worker was classified and treated (particularly California Civil Code § 1812.5095, discussed in detail below) was consistent with the law concerning independent contractor, not employees. Therefore, the company could not be, and was not, the employer of the workers.
This case is instructive because it suggests that if a company is going to venture into this area, the safest approach is to cloak itself in the requirements of the Employment Agency Act.
An issue of nomenclature should also be noted: Rather than using the terms “employment agency” some homecare placement companies have referred to themselves as a “domestic agency operating as a registry” or simply “homecare registry” which typically refers to a domestic agency that engages in the business of obtaining and filing commitments for domestic help. While I use the term “employment agency” rather than “registry,” both are functional equivalents and are governed by the same laws. In other words, it appears that a “registry” model is still an employment agency model.
As set forth below, because the registry/agency services contemplated by a home care company (and as expressed in the questions provided) best fit the employment agency or homecare registry model, the following discussion will primarily focus on the requirements under the Employment Agency Act to respond to the questions below.
B. Nurses’ Registry
Another placement model is a registry, which is typically, under California law, for skilled (licensed workers, such as certified nurses’ assistants or licensed nursing staff). The Nurses’ Registry, defined by the Civil Code, is a representative model.
Section 1812.524(b) of the Code defines a Registry as, “a person who engages in the business of obtaining and filling commitments for nursing service. A nurses' registry which makes or plans to make referrals for nurses' employment other than private duty nursing shall comply with Chapters 1 (commencing with Section 1812.500) and 2 (commencing with Section 1812.503) of this title with respect to those referrals.”
A Nurse’s Registry has specific requirements related to the duties of the Registry for bonding, contracts, disclosures, verification of experience and licensing, log sheets and records, restrictions on fees and advertising. These restrictions are more onerous than the caregiver (or domestic agency) employment agency model.
Because most of the questions posed relate to unskilled caregivers, this memorandum will only generally discuss this model (except as asked particularly). If other questions arise, the answers for skilled workers may be found in California Civil Code sections 1812.524-1812.533.
C. Job Listing Service
A Job Listing Service means any person who provides, offers or represents it can or will provide any of the following services, for a fee to be paid, directly or indirectly, by the jobseeker in advance of, or contemporaneously with, performance of these services: matches jobseekers with employment opportunities, providing or offering to provide jobseekers lists of employers or lists of job openings or like publications, or preparing resumes or lists of jobseekers for distribution to potential employers.
D. General Placement
Some entities have attempted to skirt the requirements of the Employment Agency Act and the Nurses’ Registries and created a hybrid model, in which an agency places caregivers in a relatively loose manner and sometimes calls them employees and sometimes 1099 independent contractors and sometimes payment for placements comes from the employer (homeowner) and sometimes from the worker, through a percentage of the worker’s wages. As discussed below, outside of the confines of the Employment Agency Act and the Nurses’ Registries, an agency is exposed to more risk that such an “ad hoc” model will result in misclassification of workers, violations of the Employment Agency Act and/or the Nurses’ Registries and result in substantial damages and penalties (criminal and civil).
The better approach, is to follow the requirements of the Act, and/or the Registries.
In that context, the following questions posed are addressed.
II. RESPONSES TO QUESTIONS POSED (THE CONTENT)
A. If the owner collects the payments for care from the client and pays the “independent” caregiver, then that voids the “independent” status. Is that correct?
Not necessarily. Depending on how the agreement or contract between the company and the homeowner or caregiver is set up, payment can be made in two ways:
1. Payment is made directly to the caregiver from the homeowner. No trust account is required by the company because no payment is going through the company; or,
2. Payment is made to the company from the homeowner, and the company makes payment to the caregiver. If the contract sets up payment in this way, the funds the company receives must be deposited into a trust account until payment can be made to the caregiver. (See Civil Code § 1812.5095(b)(8).)
B. I know there are many agencies that have some jurisdiction in this area, IRS, DOL, EEOC, etc and also state agencies. Most have different qualifications to be classified “independent.” What is the likelihood of being audited by any or all of them?
You are correct that various state and federal agencies may have “jurisdiction” or an interest in this area, including your referenced agencies (IRS, the DOL, the EEOC), but there are more, including, but not limited to, the State Franchise Tax Board, the California Department of Industrial Relations, the Department of Worker’s Compensation, the Department of Labor Standards Enforcement, the Employment Development Department, the Attorney General and so on.
By and large, however, the vast majority of company liability issues arise because of an alleged misclassification of the worker as an independent contractor when in fact the worker is deemed an employee by one of the government agencies (or, as mentioned above, the worker should have been an employee of the company and not the care recipient). By following the requirements of the Employment Agency Act (and, if appropriate, the Nurses’ Registry) much of the risk of liability is reduced.
We cannot give any percentage likelihood on being audited by any or all of them. However, the above reference case (An Independent Home Support) shows how having both employees and independent contractors can easily trigger a broader audit of company practices.
I will also add that the homecare industry is an evolving industry that is often under more intense scrutiny than other industries (because of, among other things, the perceived lack of regulation), so a model, like a homecare placement company, has a much greater chance of review by the various agencies mentioned above, which is why strict compliance with existing law is critical.
C. Should I have two separate companies one for W-2 employees one for 1099 independent contractors?
Determining whether the same company could have workers as employee caregivers and other workers as independent contractor caregivers, is a little complex. However, as a general proposition separate companies are not required, simply good recordkeeping. Civil Code section 1812.522(b) states:
“If any employment agency, employment counseling service, or job listing service also engages in any other business which is not subject to this title, the records of the agency or service pertaining to matters under the jurisdiction of this title shall be kept separate and apart from the records of that other business.”
Based on the foregoing, one company could theoretically operate two or more business models. However, this is not a good idea. First, there is too much risk of blurring functions, operations and records. Second, with two businesses within the same company, there is a risk of one business being viewed as the alter ego of the other and both being liable for the business of the other. The records for the companies and the caregivers must be kept separate for each company. Finally, with caregiver placement – caregiver employment agencies under scrutiny anyway, running both businesses out of one increases the risk of audits and findings that one or the other businesses are not compliant.
D. Is it possible to have the same person work for the company as a W-2 employee and also as a 1099 independent contractor?
As mentioned above, there is a way to maintain employees and independent contractors within the same company. You might even be able to have the same person be an employee for some purposes and an independent contractor for others. Clear separation of tasks, responsibilities and payment, and recordkeeping, is critical.
This question raises an important issue that C, above, hinted at: Can a company have the same worker be an employee on one job and then (through the same or another company, which I presume has the same owners?) have the same worker be an independent contractor on another job, or the same job?
Theoretically, yes. However, I would not recommend having the same person be both an employee and an independent contractor as this will be one of the “red flags” to government agencies who will contend that the arrangement is simply an end run around legal requirements. Also, some laws, like worker’s comp laws, and wage and hour laws, are very liberally construed in favor of requiring a company to cover a person (or pay a certain wage, etc.)—that is, treat them like an employee. It could be difficult to justify having worker’s comp, for example, for one person doing one job but not a “separate” identical job.
I’m not saying this cannot be done, but great care and specific contract language (and good records) are vital. We, or some other lawyer, would have to assist in structuring the contracts.
A discussion, or reminder, of the difference between an employee and independent contractor might be helpful to illustrate the difficulty with mixing and matching employees and independent contractors.
In one case the California Supreme Court discussed the factors relevant to determining if an individual is an employee or independent contractor for certain purposes. Of primary importance was “ ‘whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” The high court also indicated that the right to discharge at will without cause is strong evidence of an employee-employer relationship. Other factors relevant to the determination, include “(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.” (Borello v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350.)
The key concept coming out of Borello, and in light of the requirements of the Employment Agency Act (discussed below), is the question to answer when classifying and then reclassifying the same worker: who is exercising direction, control or supervision? The problem with mixing and matching the same worker (as an employee and then as an independent contractor) is it may be difficult to argue that the company is not exercising direction, control or supervision “of the manner and means of accomplishing the result desired” when the company directs the same worker to the same job or similar jobs; the company has responsibility for direction, control or supervision and the result on one job (and the worker is probably even trained and supervised by the company for the result) and then the worker (or homeowner) determines the direction, control or supervision for the result on the next job. This would certainly be the case of a worker changing classifications on the same assignment. However, even on distinct assignments, there is a risk of blurring of classifications—the worker himself/herself might be able to credibly argue the he/she didn’t know who they were suppose to be from one job to the next.
One must carefully review the above employee v. independent contractor elements in the Borello case and the statute discussed below in G; I would be very concerned that such blurring will result in liability for misclassification (or at least frequent government agency investigations).
Again, I suppose with clear records and clear contracts one might be able to make the fine classification distinctions, but I think the risk is not worth the perceived benefits.
E. Will or can our blanket liability insurance cover these 1099 caregivers?
There is liability insurance that covers both (or an endorsement can be purchased). For insurance specifics, however, you really need to speak with an insurance agent.
I would be best to have a separate rider/endorsement for 1099 caregivers to maintain separateness between employees and others. Any blurring in one area could create problems of misclassification issues.
F. I understand that with most homeowner’s insurance plans there is the ability for the homeowner to purchase a worker’s comp rider for “domestic workers.” Would our “independent” caregivers qualify?
As you may know, the company, if it is set up as an employment agency, is not required to provide worker’s compensation insurance for the caregivers. Depending on how the contract is structured between the caregiver and the homeowner (employer), the homeowner or the caregivermay be responsible for the worker’s compensation insurance. (See Civil Code § 1812.5095(f))
The type of coverage available through a homeowners policy depends on the type of insurance that the homeowner has. Many policies do provide such coverage or a rider or endorsement can be purchased to ensure adequate worker’s comp coverage of the caregiver as employee (of the homeowner employer).
If the caregiver is viewed as a true independent contractor, then, of course, neither the company nor the homeowner is required to provide such insurance.
G. What documentation do I need for the caregiver?
This question (and the next one) gets to the crux of the structure of this model. There is some significant contract language and disclosures to the worker and the homeowner necessary to operate this business model and to ensure that the company is not deemed to be the employer.
Civil Code section 1812.5095 provides the contract and disclosure requirements for both the company and the worker. The worker and the homeowner will have a separate contract.
The following sets forth the law verbatim and highlights some of the more significant areas for the relationship between the company and the worker. The requirements should be carefully considered and there may be follow up needed as a result of the legal requirements. Certainly, a lawyer should advise and draft any contract or disclosure.
Pursuant to section 1812.5095:
“An employment agency is not the employer of a domestic worker for whom it procures, offers, refers, provides, or attempts to provide work, if all of the following factors characterize the nature of the relationship between the employment agency and the domestic worker for whom the agency procures, offers, refers, provides, or attempts to provide domestic work:
(1) There is a signed contract or agreement between the employment agency and the domestic worker that contains, at minimum, provisions that specify all of the following:
(A) That the employment agency shall assist the domestic worker in securing work.
(B) How the employment agency's referral fee shall be paid.
(C) That the domestic worker is free to sign an agreement with other employment agencies and to perform domestic work for persons not referred by the employment agency.
(2) The domestic worker informs the employment agency of any restrictions on hours, location, conditions, or type of work he or she will accept and the domestic worker is free to select or reject any work opportunity procured, offered, referred, or provided by the employment agency.
(3) The domestic worker is free to renegotiate with the person hiring him or her the amount proposed to be paid for the work.
(4) The domestic worker does not receive any training from the employment agency with respect to the performance of domestic work. However, an employment agency may provide a voluntary orientation session in which the relationship between the employment agency and the domestic worker, including the employment agency's administrative and operating procedures, and the provisions of the contract or agreement between the employment agency and the domestic worker are explained.
(5) The domestic worker performs domestic work without any direction, control, or supervision exercised by the employment agency with respect to the manner and means of performing the domestic work. An employment agency shall not be deemed to be exercising direction, control, or supervision when it takes any of the following actions:
(A) Informs the domestic worker about the services to be provided and the conditions of work specified by the person seeking to hire a domestic worker.
(B) Contacts the person who has hired the domestic worker to determine whether that person is satisfied with the agency's referral service.
(C) Informs the domestic worker of the time during which new referrals are available.
(D) Requests the domestic worker to inform the employment agency if the domestic worker is unable to perform the work accepted.
(6) The employment agency does not provide tools, supplies, or equipment necessary to perform the domestic work.
(7) The domestic worker is not obligated to pay the employment agency's referral fee, and the employment agency is not obligated to pay the domestic worker if the person for whom the services were performed fails or refuses to pay for the domestic work.
(8) Payments for domestic services are made directly to either the domestic worker or to the employment agency. Payments made directly to the employment agency shall be deposited into a trust account [discussed below] until payment can be made to the domestic worker.
(9) The relationship between a domestic worker and the person for whom the domestic worker performs services may only be terminated by either of those parties and not by the employment agency that referred the domestic worker. However, an employment agency may decline to make additional referrals to a particular domestic worker, and the domestic worker may decline to accept a particular referral.
(c) The fee charged by an employment agency for its services shall be reasonable, negotiable, and based on a fixed percentage of the job cost.
(d) An employment agency referring a domestic worker to a job shall inform that domestic worker, in writing, on or before the signing of the contract pursuant to paragraph (1) of subdivision (b), that the domestic worker may be obligated to obtain business permits or licenses, where required by any state or local law, ordinance, or regulation, and that he or she is not eligible for unemployment insurance, state disability insurance, social security, or workers' compensation benefits through an employment agency complying with subdivision (b). The employment agency referring a domestic worker shall also inform that domestic worker, if the domestic worker is self-employed, that he or she is required to pay self-employment tax, state tax, and federal income taxes.
(e) An employment agency referring a domestic worker to a job shall verify the worker's legal status or authorization to work prior to providing referral services in accordance with procedures established under federal law.
. . .
(k) Any violation of this section with the intent to directly or indirectly mislead the public on the nature of services provided by an employment agency shall constitute unfair competition which includes any unlawful, unfair, or fraudulent business acts or practices and unfair, deceptive, untrue, or misleading advertising. Any person or entity that engages in unfair competition shall be liable for acivil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation.”
H. What documentation do I need for the client?
Section 1812.5095 provides the following, concerning the company and homeowner or client:
. . .
“(f) An employment agency referring a domestic worker to a job shall orally communicate to the person seeking domestic services the disclosure set forth below prior to the referral of the domestic worker the following disclosure statement:
‘(Name of agency) is not the employer of the domestic worker it referred to you. Depending on your arrangement with the domestic worker, you may have employer responsibilities.’
Within three business days after the employment agency refers a domestic worker to the person seeking domestic services, the following statement printed in not less than 10-point type shall be mailed to the person seeking domestic services:
‘(Name of agency) is not the employer of the domestic worker it referred to you. The domestic worker may be your employee or an independent contractor depending on the relationship you have with him or her. If you direct and control the manner and means by which the domestic worker performs his or her work you may have employer responsibilities, including employment taxes and workers' compensation, under state and federal law. For additional information contact your local Employment Development Department and the Internal Revenue Service.’
(g) An employment agency referring a domestic worker to a job shall not specify that a worker is self-employed or an independent contractor in any notice, advertisement, or brochure provided to either the worker or the customer.
(h) Every employment agency referring a domestic worker to a job and who is not the employer of the domestic worker being referred, shall in any paid telephone directory advertisement or any other promotional literature or advertising distributed or placed by such an employment agency, on or after January 1, 1995, insert the following statement, in no less than 6-point type which shall be in print which contrasts with the background of the advertisement so as to be easily legible:
‘(Name of agency) is a referral agency.’
(i) An employment agency may not refer, in its advertising, soliciting, or other presentments to the public, to any bond required to be filed pursuant to this chapter.
(j) An employment agency may not refer, in its advertising, soliciting, or other presentments to the public, to any licensure acquired by the agency.”
NOTE: There are other requirements for the company:
For example:
1. The company must be bonded (in the amount of $3,000) (§1812.503);
2. The company must conduct a personal interview with the jobseeker and make a “reasonable effort to verify the experience or training of the jobseeker” (§1812.509);
3. There is other contract language needed between the company and the jobseeker (§1812.504);
4. There is fee schedule requirements and information related to fee schedules the company must provide to the jobseeker (§1812.505); and,
5. There are advertising restrictions (§1812.508).
I. Do I have any liability if the caregiver I place damages or steals something?
The answer to this question depend on how the relationship is structured—employee v. independent contractor.
Generally, an employer can be held responsible for the mistakes or wrongs caused by their employees acting within the course and scope of their employment. Also, generally, a company is not liable for the acts of an independent contractor. If the company follows the requirements set forth above (in the Employment Agency Act), it should not be liable for the acts of the worker, as they would be classified an employee of the homeowner or an independent contractor.
However, the company complying with the requirements of the Act (and/or ensuring the worker is an independent contractor or employee of the care recipient) does not guarantee that a company would never be liable for the tortuous or wrongful acts of the worker. There are some exceptions to this general rule: for example, if the independent contractor is engaged in ultra-hazardous activities or was directed by the company to act or not act or was following company policy and procedures, there may be company liability.
Generally, speaking, however, the reason to set up the structure as a statutory employment agency under the Employment Agency Act is to preclude agent (worker) liability.
J. If the patient passes while the caregiver is there would I have liability?
Generally, no, assuming the structure is set up so that the caregiver is deemed an employee of the homeowner or an independent contractor. See I, above.
K. How should my skilled workers be classified?
Assuming you are referring to nurses (licensed registered nurse, licensed vocational nurse, practical nurse or certified nurse assistant), they are regulated by other statutes (See Civil Code § 1815.524 et seq.) and have different requirements than caregivers.
The placement model can be similar but the company has more requirements to meet: more disclosures, more investigation requirements (duties to verify licensing and experience), more and detailed recordkeeping requirements (log sheets and records), a separate bond and more advertisement restrictions.
As far as classification goes, that depends on your placement model. Nurses can more easily be classified as independent contractors (assuming you meet the requirements set forth in Borello, above) due to their expertise and less control by the company.
However, again, the first issue is what is the business model? Then classifying nurses is more easily done.
L. Do you need to set up a trust account for payments?
Depending on how the agreement or contract between the company and the caregiver is structured, payment can be made in two ways:
1. Payment is made directly to the caregiver from the homeowner. No trust account is required by the company because no payment is going through the company.
2. Payment is made to the Company from the homeowner, and the Company makes payment to the caregiver. If the contract sets up payment in this way, the funds the Company receives must be deposited into a trust account until payment can be made to the caregiver. (See Civil Code § 1812.5095(b)(8))
The first method is preferable because it provides the most separation between the company and the worker, which keeps the lines between employee and independent contractor clear.
However, the second method is acceptable under the law and at least from a practical point guarantees payment to the company. As the trust account holder, however, the company owes fiduciary duties (i.e., properly handling the money, accounting for same) to both the homeowner and the caregiver. In any dispute between the homeowner and caregiver, the company cannot takes sides and could not distribute funds from a trust account until the disputes were resolved.
M. Who completes the client assessment
The issue on assessments relates to whether the company—by doing the assessment—exercises direction, control or supervision(which may morph an independent contractor relationship into an employer – employee relationship).
An employment agency can take various actions (and make records and assessments) in the following ways and not be deemed to exercise direction, control or supervision:
1. The company can ascertain and document the services to be provided and the conditions of the work;
2. The company can inform the caregiver about services to be provided and the condition or work specified by the homeowner (and document same);
3. The company can contact the care recipient to determine whether that person is satisfied with the agency’s referral (and document same) (Civil Code § 1812.5095(b)(5)).
N. What paperwork is a registry required to store on clients or 1099 contractors
The answer to this depends on the model. Regarding the caregiver employment agency model, the company needs to keep on file all the documents referenced in the Act: including, but not limited to, contracts, advertisements, disclosures, fee schedules, job orders, the bond, worker’s personnel files (showing hire terms, evidence that the company verified legal status or authorization to work, information documenting the company’s efforts to conduct a personal interview of the worker/jobseeker and reasonable efforts to verify the experience or training of the person, assessments, tax information and so on) and referral/care recipient information. If there is a trust account, certainly all bank statements and accounting information must be maintained. Of course, all communications between the parties would be important.
The requirement to keep the records mentioned above is codified in Civil Code section 1812.522. The records must be made available for inspection at all reasonable hours “to the representative of the Attorney General, any district attorney, or any city attorney.” In light of this statutory mandate, more records rather than fewer should be the practice.
Regarding the Nurses’ Registry, the forgoing applies. However, there are additional requirements (such as log sheets and records detailing the assignment, the name of the patient, the attending physician, the fees charged, etc. and documents demonstrating the company is meeting its duty to verify licensing and experience). (Civil Code section 1812.528-529.)