Regulations and Red Tape When it comes to establishing basic terms and conditions of employment, such as hiring someone as an independent contractor or as a W-2 employee, business owners generally enjoy significant leeway. But this could change for certain Michigan businesses providing home help care services under proposed changes by the Michigan Department of Community Health (MDCH). This is because the MDCH is proposing to radically intrude into a company’s employment operations by prohibiting the hiring of independent contractors and restricting the hiring of certain family members.

Specifically, the MDCH in a notice of proposed policy changes bulletin advised that the following restrictions will be implemented beginning October 2, 2014:

  • No Independent Contractors – The use of contract employees (1099 subcontractors) will no longer be allowed in the Home Help program. Thirty days prior to this deadline, MDCH will notify the beneficiaries served by the agency, the beneficiaries’ DHS Adult Services Specialists and the provider agencies so that beneficiaries can make alternative arrangements, if necessary.
  • Restricted Use of Family Members – Members of a beneficiary’s immediate family (parents, adult children or siblings) will not be able to provide Home Help services to the beneficiary as an employee of an agency. A beneficiary’s family members (excluding legally responsible adults) can provide services to that beneficiary as individual Home Help workers.

The deadline for submitting a response to these proposed changes is August 31, 2014. As noted above, if these changes are implemented, they would become effective October 2, 2014.

For background purposes, the Home Help program is administered by the MDCH in cooperation with the Michigan Department of Human Services (DHS). The Home Help program provides in-home personal care services to individuals who need hands-on assistance with Activities of Daily Living (ADLs) and assistance with Instrumental Activities of Daily Living (IADLs). MDCH is responsible for approving agency providers for participation in the program.

A number of our law firm clients would be affected by these proposed changes and we are currently evaluating the appropriate response and possible legal challenges if the regulations are actually implemented. If you are a home help care service provider with questions about this article or these proposed regulations, feel free to contact attorney Jason Shinn.