If you're a home care registry owner, you’ve likely already learned more legalese than you care to know. On the other hand, compliance always needs to be top of mind. Striking that balance is why we've put together a guide on how to use our home care software platform to help you stay compliant and reduce the risk of a DOL audit.
But compliance is just one piece of the puzzle. We know that running a caregiver registry is a lot of work, and that's why we're here to support you and your team every step of the way.
Issuing 1099Ks
Just because you send a 1099 or a caregiver acquires an EIN (Employer Identification Number), does not mean that the caregiver won’t be considered an employee for Fair Labor Standards Act (FLSA) purposes.
In a recent webinar with our partner, Polsinelli, Angelo Spinola shared that there are different types of standards for independent contractors and employees, and they can vary on a number of aspects of work. For example, Massachusetts has four different independent contractor tests, each serving a different purpose, including:
- Tax
- Unemployment
- Workers’ compensation
- Wage-Hour
In other words, you may have independent contractors in the sense that you have individuals sharing their EIN with you, but in the eyes of the Department of Labor, they may say that they are employees.
Instead of sending 1099s and taking on the added potential liability, we suggest using a third-party payment application or payment processor, like the Ally platform, issuing a 1099K form in our name, similar to the processes used in a freelancer marketplace like Upwork. This gives you a cushion protecting you from liability and gives you a more solid case if the DOL ever performs an audit.
The human part of home care software
In the event of a DOL audit, you are never alone. We’re prepared and ready to assist you and your team at any time.
Knowing the home care registry business as well as we do, we’ll comply with any requests for information that you might need. This includes:
- Working hand-in-glove with you to retrieve any data that needs to be returned
- We’re on the same team, we’re here to help you and have built the platform in a way that speaks your language and that of the Department of Labor. Don’t worry, we’re here to help you pass the test with flying colors.
We will also offer to send expert witnesses that can help strengthen your case. An expert witness is a person “with specialized knowledge, skills, education, or experience in a particular field who is called upon to provide their expertise in legal proceedings to assist the court with understanding complex technical or scientific issues.” With the complex nature of the home care industry, it’s critical to have someone on your case who can go to bat for you.
To learn more about some rules you should keep in mind with an audit, click here.
Funds flow in the right direction for registries to remain compliant
The way that money flows in and out of your agency is a key factor in passing an audit. You want to have as little direct interface with money as possible.
With a third-party payment processing and disbursement system like Ally, you can avoid touching payment. If a DOL audit happens and a home care registry is not collecting or dispersing funds, it’s concluded immediately. This makes it so much easier to handle funds while keeping things simple for clients and caregivers.
Our home care software platform also takes it up a notch by issuing checks in our name, rather than your registry’s name. The importance of the check being cut in Ally’s name is because of the FAB on Determining Whether Nurse or Caregiver Registries are Employers of the caregiver.
One of the criteria for determining employment in this industry is paying wages. If your registry cuts the check, this puts you at risk of being considered an employer of the contractors under the Fair Labor Standards Act (FLSA).
Home Care Registry Compliance Made Easy With Software
Maintaining a clean registry without any violations or fines is possible with a technology partner that understands your business. Ally makes it easy because we’ve been there.
By issuing 1099Ks, providing support during an audit, and developing a funds workflow that keeps your name out of the equation, all continually build a case that keeps you compliant. If you are ready to take your compliance to the next level, contact us today for a demo of the Ally platform.
