Live-in caregivers provide personal care and assistance services for the elderly, disabled or handicapped. Their compensation depends largely on a variety of factors, including the prevailing wage rates in your location and the skill sets of the particular care-giver. For example, a full-time licensed practical nurse, or LPN, would command more pay than a certified nurses aide or an unskilled personal assistant.
If you are planning on hiring a care provider, live-in or otherwise, you must be familiar with the wage and hour laws that govern all employees. Under the Fair Labor Standards Act, these workers must generally draw an hourly wage, rather than a salary. Additionally, you must pay overtime, which is equal to 150 percent of the employee's normal hourly wage, for any hours worked over 40. You must also comply with the federal minimum wage, which is $7.25 per hour, as of 2011. Your state laws may have more stringent requirements than federal law imposes. You must observe the law that provides the most benefit to the caregiver.
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Nationwide, the average cost of personal long-term care recieved at home averaged $20 per hour, according to a recent survey commissioned by John Hancock, a prominent insurance company that sells long-term care insurance, life insurance, and annuities. This translates to an annual compensation of roughly $37,440 per year. This compensation has risen by about 1.4 percent annually over the last decade, the survey found.
The average pay for in-home care providers varies substantially with location. Those located in and near New York City, San Francisco and Alaska can expect to pay a substantially higher market rate for labor, skilled or unskilled, than those in rural communities in the south and midwest, for example.
As an employe, you will have to withhold Social Security taxes from your care provider's pay. Specifically, you will need to withhold 4.2 percent from your employee's pay in 2011, and 6.2 percent thereafter, and forward this money to the IRS. Additionally, you must withhold another 1.45 percent in hospital insurance, or Medicare contributions. You must also forward another 6.2 percent in OASDI and 1.45 percent in Medicare tax as the employer contribution to Social Security tax. Be sure to account for this tax in projecting your care costs.
If the need is for unskilled care of children, you may consider using an au pair exchange program. In these programs, you will provide room and full board for an au pair, typically visiting from another country. You will also provide cash compensation of at least $195.75 per week, for about 45 hours of care.