How to Hire Paid family caregivers: An Employer's Guide

A paid family caregiver is a relative paid for caring for one specific person — an adult child, a spouse, a sibling, another relative, or in some programs a close friend. The care happens in that person's home, or in the caregiver's own home under a shared-living arrangement.

The work is whatever the client's plan of care spells out — for a non-medical hire, companionship, help with bathing and dressing, meals, errands and light housekeeping — delivered to that one person. What is different is the reporting line: the client is the caregiver's own relative or, in programs that allow it, a close friend, and the program, not a staffing coordinator, decides who can hold the job.

The employer role depends on the model. In consumer-directed programs such as New York's CDPAP, the consumer or their designated representative is responsible for recruiting, hiring, training, supervising and terminating the personal assistant, and the fiscal intermediary handles payroll, tax withholding and employment records. New York runs that function through one statewide fiscal intermediary, Public Partnerships LLC: all CDPAP recipients are required to work with it, under a transition that started January 6, 2025 with an April 1, 2025 deadline.

Federal self-direction rules describe the financial management entity's role: collecting and processing workers' timesheets, processing payroll, withholding and payment of employment taxes and insurance, and tracking and reporting the participant's budget (42 CFR 441.484(c)). CMS names the participant's side of the arrangement employer authority — recruiting, hiring, training and supervising their workers — and budget authority over how the program's funds are spent.

In structured family caregiving and other shared-living arrangements, the caregiver's own home is the care setting, and a provider organization is party to the arrangement. What that means for wages and employer duties turns on the facts of the arrangement, not the program's name — the pay section below covers that test. In a registry-style setup, the household may employ directly while your organization supports payroll only.

Employer status follows control, and the IRS draws that line explicitly. IRS Publication 926 says that if an agency provides the worker and controls what work is done and how, the worker is not the household's employee. Settle which side of that line each arrangement sits on before the first shift, because it decides who withholds taxes, who owes wage-hour duties, and whose screening rules apply.

The funding routes are programs, not private pockets. Self-direction is available under several Medicaid authorities — state plan personal care, 1915(c) waivers, 1115 demonstrations, and sections 1915(i), 1915(j) and 1915(k). Home and community-based services under section 1915(c) of the Social Security Act may include homemaker, home health aide, personal care, adult day health and respite care services (42 CFR 440.180(b)).

The VA route is separate. The VA's Program of Comprehensive Assistance for Family Caregivers serves veterans with a single or combined service-connected rating of 70% or more who need in-person personal care for at least six continuous months. Those caregivers are VA program participants, not your hires — but families will ask your office about the program, so know where the boundary sits.

Spouse and relative rules are program-specific, and they matter when a couple enrolls. New York's CDPAP lets a Medicaid member hire a friend or family member as their personal assistant unless they are the member's spouse or designated representative, or the parent of a CDPAP consumer under age 21. Never carry one program's spouse rule to another — the state Medicaid agency's rules for that program govern.

The worker's side of this arrangement — how relatives qualify, enroll and get paid — lives in the paid family caregiver career guide. This page stays on your side of the hire.

The qualifications come from two places: the program that pays and your state's rules for the agencies it regulates. The state Medicaid agency that operates a self-direction or structured family caregiving program sets that program's own caregiver criteria — the CDPAP exclusions above are one program's list — and they can differ from the next state's program with a similar name.

For the occupation this hire sits inside, BLS's Employment Projections table lists typical entry education as a high school diploma or equivalent, with short-term on-the-job training. That describes how people enter home health and personal care aide work generally — it is not your program's rule.

Where your state's rule for the assignment does require a credential — a nurse aide registry listing, for example — verify it with the registry before the first shift, the same way you would for any aide hire. Which credential, if any, applies to a relative paid through your program is a question for the state agency that runs the program, not something a job title answers.

Program rules change. Confirm the caregiver requirements for your program — age, assessment, training and background check — with the state Medicaid agency that operates it, and with the VA for its caregiver programs, before you enroll anyone.

Recruiting runs differently for this role than for a general caregiver opening. In consumer-directed programs the participant does the recruiting — CMS gives them employer authority over their workers — and your pipeline fills through program enrollment rather than job ads.

Your sourcing work is therefore two-sided: helping participants understand who their program allows them to hire, and keeping a direct-applicant pool for the caregiver roles your agency fills itself. Build the channels you can operate directly — referrals from enrolled families, rehires and previous applicants, your own postings, and the community organizations your clients already belong to.

The labor context is the one every direct care employer is hiring against. BLS Employment Projections put home health and personal care aide employment at 4,677,100 jobs in 2025, growing 18.1% to a projected 5,524,400 by 2035, with 760,500 openings projected each year. PHI, a direct care research and policy organization, separately projects an estimated 9.7 million total job openings in direct care from 2024 to 2034, counting occupational transfers and labor-force exits alongside new jobs.

The two series use different windows — BLS projects 2025 to 2035, PHI covers 2024 to 2034 — so name which one you are quoting when you take the numbers into a budget conversation.

When you post the role yourself, keep the ad about the job. It is illegal under EEOC-enforced laws to publish a posting that shows a preference for or discourages applicants based on race, color, religion, sex, national origin, age (40+), disability or genetic information. A spec that names a gender or an age band is the misstep to design out.

The channel detail — which boards deserve budget, how to word the ad, how referral rewards are structured — belongs to the recruitment strategy guide. Before you publish, browse the paid family caregiver jobs board to see what candidates in your market are comparing against.

Screen every candidate through the same sequence: application review, a phone screen, an interview, reference calls, then the background screening your program and state require. A fixed order treats every applicant consistently and leaves you a record of how each enrollment decision was made.

When you order a consumer report — a criminal background check or a motor vehicle record — the Fair Credit Reporting Act requires a clear written disclosure in a stand-alone document and the applicant's written authorization before you pull it. That applies to a relative hire the same as any other applicant.

Your own enrollment adds checks on the agency side. State Medicaid agencies must screen provider applications by risk level, and high-risk screening adds criminal background checks and fingerprints to license verification, database checks and site visits (42 CFR 455.450). What your program requires of the caregiver, and when those checks renew, comes from the state Medicaid agency's rules for that program.

Federal exclusion screening is separate. No Medicare, Medicaid or other federal health care program payment may be made for items or services furnished by an excluded individual (42 CFR 1001.1901).

Federal statute and regulation do not require providers to check the OIG's List of Excluded Individuals/Entities, though many state Medicaid programs and provider agreements do require monthly exclusion checks. OIG recommends screening before hiring and periodically; because the list updates monthly, monthly screening best minimizes liability.

Call references yourself. For a relative hire they do double duty: they speak to caregiving skill, and to whether the family relationship supports a working reporting line with your office.

The step-by-step — what to order, in what order, and with which written disclosures — is the background checks guide's territory. Confirm your screening sequence with the state Medicaid agency for your program, or with health-care counsel, before you enroll anyone.

Start from the fact other pay tables skip: BLS's OEWS has no separate family caregiver occupation — the published group is home health and personal care aides (SOC 31-1120), counted together. What a relative earns is governed by the program that pays them: in self-directed models the participant holds the employer and budget authority described above, and in some self-directed models it is the beneficiary who sets the worker's pay rate. Confirm your program's current rate structure with the state Medicaid agency that operates it before you promise a number to a family.

The VA route is set federally. Under 38 CFR 71.15, the PCAFC monthly stipend rate is the General Schedule grade 4, step 1 rate for the veteran's locality pay area, divided by 12. The Primary Family Caregiver receives 62.5% of that rate, or 100% if VA finds the veteran unable to self-sustain in the community. It varies by locality and changes when OPM updates the General Schedule rate — it is not a rate your agency sets.

For the broader occupation this hire sits inside, BLS's published group is home health and personal care aides (SOC 31-1120), reported combined. In May 2025 that group earned a national median of $17.21 an hour — $35,800 a year — with a 10th-to-90th percentile hourly range of $13.00 to $21.65. Payroll employment was 4,305,810. Use those figures only to sanity-check what a program's rates look like against the wider field; they are not a pay rate for a family caregiver.

Whatever the program pays, your wage-hour duties depend on who the employer is. Since January 1, 2015, third-party employers such as home care agencies cannot claim the FLSA companionship-services exemption. They owe at least the federal minimum wage for all hours worked, plus overtime at time-and-a-half over 40 hours in a workweek. The federal minimum wage is $7.25 an hour, and state or local floors may be higher.

The bar covers the live-in exemption too. Under 29 CFR 552.109, third-party employers may not use the live-in overtime exemption, even when the worker is jointly employed by the household; the household itself may still claim the exemption. That is why the employer-status question at the top of this guide matters before you set any rate.

Hours need your attention before rates do. Travel between clients during the workday is compensable hours worked, and the third-party employer is responsible for paying it; ordinary home-to-work commuting is not.

For live-in workers, employer and worker may agree to exclude bona fide meal, sleep and off-duty time, but the employer must still track and record all hours actually worked. Confirm any sleep-time or live-in arrangement with the DOL's Wage and Hour Division before you build a schedule around it.

Structured family caregiving adds its own wrinkle. For shared-living arrangements, the DOL's position is that the particular facts of the arrangement between the provider, the consumer and any third party — not the program's name — determine whether and how the FLSA applies. Have the arrangement reviewed by the DOL or health-care counsel rather than assuming the program's label settles it.

Two tax rules come up in every family caregiving conversation — state them precisely or not at all. Under IRS Notice 2014-7, qualifying Medicaid HCBS waiver payments under section 1915(c) to individual care providers for care in the provider's home are treated as difficulty-of-care payments excludable from gross income.

That is the exclusion a shared-living arrangement can fall under when its payment meets those conditions — a qualifying waiver payment for care in the caregiver's own home. And a household employing a worker it controls must pay Social Security and Medicare taxes once it pays that household employee $3,000 or more in cash wages in 2026 (IRS Publication 926). Whether that applies when the worker is the household's own relative depends on the relationship, so check Publication 926 before assuming it does. Both rules are narrow; confirm any individual arrangement with a CPA.

One more rule sits downstream of your pay decisions. Under the 2024 Medicaid Access Rule, states must ensure each provider spends at least 80 percent of Medicaid payments for 1915(c) homemaker, home health aide and personal care services on direct care worker compensation. The requirement applies from July 9, 2030, or from the first managed care rating period starting on or after that date. Payment data from self-directed models where the beneficiary sets the worker's pay rate is excluded from the state's calculation.

Pay rules stack: program rates, the FLSA and the IRS rules above each apply on their own terms. Confirm what you owe with the state Medicaid agency for your program, the DOL for wage-hour questions, and a CPA for tax treatment — before you publish a rate.

In consumer-directed models the participant or their representative makes the hiring choice, and your office structures the process around it: scheduling the interview, running the screening sequence, and completing the enrollment file. In the roles your agency fills itself, you interview directly. Either way, put the same structure around every interview so comparisons stay fair.

Keep questions on the job and the candidate's work history. The EEOC's guidance is to limit pre-employment inquiries to what is essential for determining whether a person is qualified for the job, and to avoid questions that would indicate race, sex, national origin, disability status, age, religion, color or ancestry.

Assess what the assignment actually demands. Reliability and boundaries sit at the top of the list: a relative caring for their own family member still works to a plan of care, reports changes in condition, and keeps documentation current. Ask how the candidate handled a task the client refused, what they do when the next visit is at risk, and when they would call the office instead of handling something alone.

Run the same working demonstration for every candidate — a supervised transfer, a bathing routine, a meal-preparation visit, matched to the tasks on the care plan — so you compare like against like.

Put the offer in writing with the concrete terms. Name the hourly rate and how it maps to the program's rate structure, how hours are recorded, and the schedule the client needs. Add the training you provide and when it happens, who supervises the work, and your mileage and travel-time policy. The clearer the terms, the easier the candidate's comparison against every other option on the table.

Onboarding starts before the first solo shift. Complete the enrollment file the program requires, verify work eligibility on Form I-9 — Section 2 is due within three business days of the hire — set up payroll, and complete any training your program requires before independent work. Layer your own orientation on top: documentation, the clock-in routine your scheduling system uses, and the escalation path for changes in a client's condition.

Electronic visit verification deserves its own walkthrough for this workforce. Under the 21st Century Cures Act, states must require EVV for Medicaid personal care services from January 1, 2020 and home health care services from January 1, 2023 (with a one-year good-faith exemption available). The mandate covers personal care services under 1905(a)(24), 1915(c), 1915(i), 1915(j), 1915(k) and section 1115 demonstrations, so self-directed and consumer-directed Medicaid caregivers are subject to it too. The verification captures six data elements: the type of service, the individual receiving it, the date, the location, the individual providing it, and the begin and end times. The law does not require any particular EVV system — states choose the model.

CMS has also drawn a live-in boundary. EVV requirements do not apply when the caregiver and the beneficiary live together, because services by someone living in the residence are not an "in-home visit" — though states may still choose to require EVV there, especially for hourly-billed services. Check your state's rule before you tell a live-in caregiver the app does not apply to them.

Keep the paper trail the domestic-service rules require: each worker's name, Social Security number, address, hours worked each week, cash wages and overtime pay, preserved for three years (29 CFR 552.110). Build the file as the weeks happen, not at renewal time.

Start from what PHI documents for direct care as a whole. PHI's Key Facts 2025 attributes median annual earnings of just under $26,000 for direct care workers to low wages and part-time hours — earnings that include part-time schedules, which is why the figure sits below a full-year equivalent. Where your agency sets the wage and the schedule, those are the two inputs that figure names; where the program sets the rate, the rate is not yours to change.

Judge your own program from your own records — separations, exit reasons, how long caregivers stay enrolled — then fix what the records name. For family caregivers the conversation also includes the shape of the job itself: a clear reporting line that does not run through the family, scheduled relief on the calendar, and a supervisor the caregiver can call when the relationship gets complicated.

The scheduling, overtime and wage-hour topics around this hire sit in the employer hiring guide.

Employer information, not licensing, legal, medical, benefits or tax advice. Program rules, pay rates, EVV and screening requirements come from the state Medicaid agencies, the VA, the DOL, the IRS and the EEOC. Confirm the current requirements with the agency named for each rule, and with a CPA or health-care counsel for classification, tax and business-structure questions.