Now the thing is the couple will gladly pay $5,000, but the agency is telling them that it's $20,000. Now I know that that is asking for too much. What should we do? Should we call the better business bureau or who do we need to contact. I emailed them 2x already and asked for a copy of the “contract" (if she did have one) the agency is talking about and they never replied back. Help please!
Yes. All too often on this site, I see people paying and being paid "under the table." Usually when people want private caregivers, it is to save money -- the caregiver can get more than they do from the agency, and the person hiring the caregiver can pay less than they would pay the agency.
How many of these situations result in the proper employment taxes being paid, though?
The thing is, an employment contract can exist in fact even if it isn't down on paper and signed as such (though it should have been. Naughty agency!). Who issues her pay check? Have they been handling taxes and benefits properly? Does she work only through them?
If the agency can prove that your mother is their employee or their subcontractor they will have a case against the nice couple if the couple poaches her, and therefore continuing negotiations about the price of what is, actually, their finder's fee or commission will be the way to go.
Even so; the agency will, of course, have to supply the paperwork that shows what the nice couple is paying for once the price is agreed. It will be interesting to see what they come up with.
I should look on the $20K bid as a bargaining position rather than a final offer and, with the couple's permission of course, pick up the phone and start talking. And you've looked at the agency's website to see if there is any information about terms and conditions there, have you?
The agency may not have a contract with mom. It may be policy which is handled differently many times, you know, the it depends.... It s wonderful that this couple love your mom, she must do a wonderful job with them.
Call other agencies, as a shopper, and ask what their fees are if a client wants to direct hire a caregiver. You may even be able to Google it to find out if the 20k is reasonable.
BUT the attitude about this seems unreasonable. If your mother signed a contract, she needs to live up to it. If she received an employee's handbook with that information in it then it might be enforceable, too. (I don't know.) But if they cannot produce a copy of the contract, then I think your mother is justified in quitting (with whatever notice is required -- two weeks, usually) and signing on directly with the family, with no payment for the contract. (This is not a legal opinion, you understand.)
Mom will then have to be sure the situation is legitimately handled for taxes. Either she is a self-employed person with all the paperwork and quarterly tax payments that entails, or she is an employee of the family, who will have to without payroll taxes and pay the employer's portion of SS, etc. If they are willing to pay $5000 to release her from her contract, they probably won't mind taking on the bookkeeping tasks or turning it over to their bookkeeper.
If your mother does decide to work directly for the family, she should be sure the tax-related paperwork is all decided before she hands in her notice.