(612) 409-4351In-Home CareReserve a visit
All field notes
Autumn 2026·7 min read·Abloom Senior Living

Hiring a caregiver yourself, or going through an agency

The hourly number is only part of the comparison, and Minnesota law decides more of it than most families expect.

What the hourly comparison leaves out

Somewhere in the first week or two of looking into help at home, someone tells you that you can hire a person directly for well under what an agency charges. The hourly comparison is usually accurate, which is why the question comes up in almost every first conversation we have with families.

Three other sets of rules decide the rest of it, and they sit in three separate places: the state home care licensing statute, the federal tax code, and Minnesota's workers compensation law. No one agency covers all three for families, so this is easy to miss and most people do miss it.

The two arrangements

In the first, you find a caregiver, agree on the hours and the pay, and pay her yourself. You are her employer. You set the schedule, you handle the money, and you are the one she calls when something changes.

In the second, you contract with a licensed home care provider. The agency employs the caregiver, assigns her to your parent, and carries the license, the insurance, and the payroll.

Families often end up doing some of both, so this does not have to be one choice. A neighbor who comes for two afternoons a week and an agency that covers the mornings is a common arrangement in Woodbury and Cottage Grove.

Minnesota caps the hours a privately hired caregiver can work

Minn. Stat. 144A.471 says a home care provider may not "provide home care services in Minnesota without a temporary or current home care provider license issued by the commissioner of health." The requirement applies to a single caregiver working for one family the same way it applies to a company.

Subdivision 9 of that statute lists the exemptions. Two of them matter to most families. The statute exempts "an individual who only provides home care services to a relative." It also exempts "an individual who performs basic home care services for no more than 14 hours each calendar week to no more than one client."

So, in practice:

  • A son, a daughter, a niece, or a spouse can be paid to provide care without a license.
  • Someone from outside the family can be hired directly for up to 14 hours a week, for your parent only, and only for basic services such as help with dressing, bathing, meals, and reminders.
  • Past 14 hours a week, or if the work includes the things on the comprehensive list such as giving medications rather than reminding, delegated nursing tasks, or tube feeding, the person needs her own license from the Minnesota Department of Health.

If someone is already working more hours than that, the hours can be rearranged. Most families move the hours over the limit to a licensed provider and keep the rest of the arrangement as it is.

Plenty of people advertising on neighborhood boards and in church bulletins do not hold a license, and most of them have simply never been told they need one. Asking a caregiver whether she is licensed, and looking her up in the Department of Health's provider database, is awkward to bring up at the start, and harder to raise after someone has been hurt. You can find whether an individual or an agency holds a current license in that database, and our walkthrough of how to check a home care license shows where to click.

What you take on as the employer

Paying someone directly makes you a household employer in the eyes of the IRS. Most of it is paperwork, and two obligations matter here.

The IRS states in Topic 756 that if you pay cash wages of $3,000 or more for 2026 to any one household employee, you generally must withhold 6.2 percent for Social Security tax and 1.45 percent for Medicare tax, and pay a matching amount yourself. The same page sets a second trigger: if you paid a household employee more than $1,000 in any calendar quarter during the year or the prior year, you generally owe federal unemployment tax on the first $7,000 of her wages.

Minnesota adds workers compensation. Under Minn. Stat. 176.041, subdivision 1, a household worker is outside the mandatory coverage requirement only while she "earns less than $1,000 in cash in a three-month period from a single private home or household," and once she has earned $1,000 or more from the same employer in a three-month period within the previous year she is covered regardless of what the current quarter looks like. Above that line, a caregiver hurt lifting your father in the bathroom is a workers compensation matter, and you are the employer in it. Your homeowners policy may or may not help, and your insurance agent can tell you which yours does.

Hiring directly can still be the right call. Count payroll taxes, a workers compensation policy, and someone's time on the paperwork when you compare the two hourly rates. Several payroll services handle household employers for a monthly fee, and a tax preparer can set the whole thing up once and leave you with a routine.

Who covers the shift when she is sick

Families bring this up with us more often than the money or the paperwork.

A caregiver you hire directly has no backup. If she has the flu, or her own child is sick, or she takes two weeks in July, you are the one filling those hours. Many families manage that for months, and then a stretch of bad luck lands in the same week as a work deadline.

An agency carries a schedule of other caregivers and the obligation to staff your hours. Ask any agency you are considering how they handle a call-out at 6 a.m., and ask how often it happens. How quickly they answer is itself informative, and our list of questions to ask a home care provider covers the other questions.

What a license obliges an agency to do

A license is not a quality rating. It does attach specific duties that a private hire does not carry.

Under Minn. Stat. 144A.4791, a licensed provider must give the client or the client's representative written notice of the home care bill of rights "before the date that services are first provided." For comprehensive services, an individualized initial assessment "must be conducted in person by a registered nurse" and completed within five days of the start of care, and the provider must finalize a written service plan no later than 14 days in. The plan lists the tasks, the days, and the times.

Minn. Stat. 144A.476 requires state background studies on everyone a licensed provider sends into the house, and on the people who run it. When you hire privately, running a background check is yours to arrange, and so is deciding what to do with what it says.

A written plan gives you a record you can hold an agency to later. Our page on what a visit looks like walks through how a plan like that turns into an actual morning, and nursing care at home covers the tasks a nurse has to assess before an aide can do them.

When each one tends to work

Hiring directly works well for a relative who is already doing the work and should be paid for it, for a few hours a week of company and housekeeping, and for a trusted neighbor within that 14-hour limit.

An agency tends to be the better fit when the care involves two-person transfers, a feeding tube, oxygen or BiPAP, medications that have to be given rather than reminded, or overnight hours. Dementia that has made the evenings unpredictable is another, since the needs shift week to week and the schedule has to be adjusted often.

Abloom Senior Living is licensed by the Minnesota Department of Health for that second set of cases in a parent's own home, including tracheostomy care without a ventilator, G, J, and GJ tube feeding, BiPAP, CPAP, and oxygen, two-person transfers, and dementia care at home. If your parent needs any of that, ask us or any provider you are considering how often they do it. Overnight care here is staffed as awake shifts, with no sleeping hours.

What can wait

You do not have to settle this today. If the immediate problem is a few unsafe hours in the evening, you can start with those hours and sort out the rest later, whichever way you go. If you are leaning toward hiring someone directly and the hours are creeping up past 14 a week, that is a good time to look at the licensing rules again.

This article is general information from a care provider. It is not legal, financial, or medical advice. For your own situation, talk with your tax preparer, your insurance agent, or an attorney.

Where to start

If you want to talk it through with someone who will tell you plainly which parts of your situation need a licensed provider and which do not, request a visit and we will come to your parent's home, or you are welcome to come see the house in Woodbury. Our care at home is private pay or paid through long-term care insurance, and our pricing page explains how the hours are put together. We will also tell you if we are not the right fit, and point you toward who is. Our getting started page describes what the first visit covers.

Frequently asked questions

Is it legal to hire a caregiver directly in Minnesota?

Yes, within limits. Minn. Stat. 144A.471, subdivision 9, exempts an individual who provides home care only to a relative, and an individual who performs basic home care services for no more than 14 hours each calendar week to no more than one client. Beyond those exemptions, the person needs a home care license from the Minnesota Department of Health.

Do I have to pay taxes if I pay a caregiver myself?

Usually. The IRS says that if you pay cash wages of $3,000 or more for 2026 to any one household employee, you generally must withhold Social Security and Medicare taxes and pay a matching share, and that paying more than $1,000 in a calendar quarter generally triggers federal unemployment tax. Your tax preparer can set this up once and leave you with a monthly routine.

Can I pay my sister to care for our mother?

Minnesota's licensing statute exempts an individual who provides home care services only to a relative, so no license is involved. The tax and workers compensation questions still apply once the money passes the thresholds above, and a written agreement about hours and pay saves a great deal of trouble among siblings later.

What happens if a privately hired caregiver gets hurt in my parent's house?

If she has earned $1,000 or more in cash in a three-month period from that household, Minn. Stat. 176.041, subdivision 1, puts her inside the workers compensation system with your family as the employer. Ask your insurance agent what your homeowners policy covers before you are in that situation.

Can a privately hired caregiver give my mother her medications?

Giving medications is not a basic home care service, so it falls outside the 14-hour exemption and generally requires a licensed provider with nursing oversight. Our article on who can give medications at home explains the difference between a reminder and administration.

Related reading

Sources

All field notesArrange a visit