Guides
Home care agency compliance checklist: the order to work in
A home care agency compliance checklist in working order: worker relationship, paid travel, exemption, caregiver screening, OSHA exposure plan, records.
A home care agency's compliance with its own caregivers comes down to three questions: are they paid correctly, are they protected on the job, and is everything documented? Work through them in the order the rules bind, starting with the worker relationship. Each section names the rule or agency behind it.
What to take away
- The first decision is the worker relationshipemployee or contractor. The U.S. Department of Labor decides it on the facts of the assignment, not the contract label.
- Travel between clients is usually paid time. Unpaid travel shows up in a wage claim, not an audit.
- A caregiver's shift is not the same as billable hours. Build the rate so paid travel, documentation and training time are covered before you quote a client.
- Check each role against the companionship exemption instead of applying one answer to the whole roster.
- Check the OIG exclusion list before the first shift, and write the bloodborne pathogens exposure plan before the first visit.
- Keep one file per caregivercredentials, screening results, training, payroll records and hours worked.
Scope of care, employment classification and licensing vary by state and payer, and none of this is legal, tax or clinical advice. Confirm current requirements with your state licensing agency, the U.S. Department of Labor, the IRS and a qualified adviser. For the wider picture, see agency operations.
Decide the worker relationship before you price a visit
Before you price a single visit, decide whether your caregivers are employees or independent contractors. That choice sets your payroll duties, your insurance and your exposure if the classification is challenged.
Employee or contractor?
Does the working arrangement match the label?
Payroll duties, insurance, lower misclassification risk
Payroll exposure, insurance gaps, classification challenge
The Labor Department publishes guidance on hours worked for domestic service employment, including examples that involve a home care agency. The rules sit in 29 CFR Part 552. They explain which time counts as compensable: on-duty time, waiting time, travel, and time moving between clients.
Read that guidance before you write a contract. The label on the contract does not settle the question. The working arrangement does.
Agencies that set schedules, assign clients and supervise care usually have employees. Get a written opinion from an employment lawyer before you rely on contractor status, because the test looks at how the work is controlled.
Pay for travel between clients
A caregiver who finishes at one client's home and drives to the next is usually working during that drive. If your schedule treats that time as unpaid, you have a payroll problem that grows with every shift, and bookkeeping and cash flow will show it late.
Break-even rate in four steps
- Take caregiver hourly rate
- Multiply by paid travel hours per week
- Add CPP, EI, FICA, unemployment, workers' comp
- Divide by billable hours that week
The arithmetic is simple and you supply the numbers:
- Multiply the caregiver's hourly rate by the paid travel hours in a week.
- Add the employer on-costsFICA and unemployment insurance, plus workers' compensation premiums.
- Divide the total by the billable hours that week.
- Compare the result with your quoted rate.
That total is your true labor cost per caregiver week, and the result is your break-even hourly rate before overhead. If your quoted rate is below it, the agency loses money on every visit, and busier weeks make it worse. The pay rates and labor costs guide covers the on-costs in more depth.
Check each role against the companionship exemption
The Labor Department keeps a page on how the Fair Labor Standards Act applies to direct care workers, including home health aides, personal care aides, caregivers and companions. It sets out federal minimum wage and overtime obligations for those roles.
Companionship exemption: who is covered
Generally exempt
- Role
- Companions
- Duties
- Companionship only
- Roster check
- Narrow, case by case
Generally not exempt
- Role
- Personal care aides
- Duties
- Personal care duties
- Roster check
- Check each role against current rule
Companionship exemptions exist in the Fair Labor Standards Act, at 29 U.S.C. 213(a)(15), and the Labor Department defines them in 29 CFR Part 552. They are narrow and they do not cover everyone on your roster. A caregiver who performs personal care duties is generally not exempt.
The same page says the 2013 rule precluded third party employers such as home care agencies from claiming either exemption, and it records a proposal to return to the 1975 regulations. Check the current status of that proposal before you rely on any exemption.
Check each role against the current rule rather than applying one exemption to the whole team. Record the answer for each job title, with the date you checked and the source you used.
Check exclusion before the first paycheck
Screen every caregiver before the first shift. If you serve Medicare or Medicaid clients, you must screen against the OIG List of Excluded Individuals and Entities before hiring. An excluded worker cannot be paid with federal health care funds.
It is standard practice to re-check the list monthly because it changes. Many states also require a criminal history check, and some require fingerprinting through the state police or the FBI for home care workers.
State nurse aide registries are a separate check. They apply to aides taking shifts in Medicare- or Medicaid-certified nursing facilities, not to home visits. The licensing and compliance guide covers the state side of screening, and the permits article covers which approvals come first.
Protect caregivers under the bloodborne pathogens standard
OSHA covers home care employers even though the worksite belongs to the client. The bloodborne pathogens standard, 29 CFR 1910.1030, requires each employer with occupationally exposed employees to establish a written Exposure Control Plan designed to eliminate or minimize exposure.
The same standard requires hepatitis B vaccination offered to employees with occupational exposure, gloves and other protective equipment, and safe handling of sharps. Write the plan, stock sharps containers and protective equipment, and train each caregiver before the first visit.
OSHA's home health care guidance explains how to meet the standards where you do not control the worksite. Pair it with caregiver training so the written plan reaches the people who carry it out.
Keep the records a regulator or insurer will ask for
Keep one file per caregiver: credentials, screening results, training, payroll records and hours worked. When a regulator or an insurer asks, the file is the answer. Your insurance and coverage review will also draw on it.
HIPAA follows the transactions, not the size of the agency. An agency that bills Medicare or Medicaid, or transmits any claim electronically, is a covered entity, and its billing service or EHR vendor is a business associate.
The Privacy Rule requires a notice of privacy practices and a named privacy official. The Security Rule covers electronic records only, while paper files stay under state privacy law and your own retention policy.
Each new hire also completes Form I-9 for employment eligibility and Form W-4 for federal withholding. Both belong in the same caregiver file as the screening and training records.
What to check before the first client
- Confirm the worker classification for each role against the Fair Labor Standards Act and your state labor office.
- Map every paid hourclient time, travel between clients, documentation, training and on-call.
- Work out the break-even rate and compare it with the rate you quote.
- Check each job title against the companionship exemption and record the date and source.
- Register for payroll taxes with the IRS and with your state revenue and unemployment agencies, and confirm workers' compensation coverage.
- Screen every caregiverstate criminal history checks and fingerprinting where required, plus the OIG List of Excluded Individuals and Entities.
- Write the exposure control plan, and stock sharps containers and protective equipment.
- Build one file per caregiver and keep it current.
Common questions
Does a home care agency have to pay caregivers for travel between clients?
In most cases, yes. The Labor Department's guidance on domestic service hours worked treats job-to-job travel as compensable time. Confirm how the rule applies to your specific schedules with your state labor office or an employment lawyer.
Can I hire caregivers as independent contractors?
Sometimes, but the test looks at how the work is controlled, not what the contract says. Agencies that set schedules, assign clients and supervise care usually have employees. Get a written opinion from an employment lawyer before you rely on contractor status.
How do I set an hourly rate that covers compliance costs?
Start with true labor cost: wages plus payroll taxes, workers' compensation, mileage and paid travel. Divide by billable hours to get a break-even rate, then add overhead and margin. Review it monthly against your fill rate and caregiver turnover.
Does OSHA apply when the worksite is the client's home?
Yes. OSHA covers home care employers even though the worksite belongs to the client. Its home health care guidance explains how to meet the standards where you do not control the worksite.
