Being an employer in California

Most people come to Self-Determination for the choice it offers. What the program does not announce is that about nine in ten participants end up hiring someone — and that the day you do, you take on a second job with rules of its own.

This page is about that second job.

It is not a warning. Employing your own staff is the single biggest reason families say the program changed things for them: you choose the actual person who walks through your door, and you decide what they are paid. But it is a real role with real obligations, and almost nothing written for this program covers it. That gap is why this page exists.

Start here

What changes when you hire someone, why the rules are as tangled as they are, and the one habit that prevents the expensive mistake.

Why this page keeps telling you to ask

Pay, hours, overtime and taxes for someone working in a home are genuinely, unusually complicated — and you will see that reflected below, where several sections give you the general rule and then tell you it may not be the one that applies to you.

That is not this page being evasive. It is an honest description of the landscape.

State and federal rules both carve out in-home care, and they do not line up with each other. California's own labor rules treat personal attendants differently from other employees, live-in workers differently again, and exclude several family relationships from protections that otherwise apply. The IRS has its own set of rules for household employment, drawn along different lines — so the state answer and the federal answer to "how should this person be paid and taxed" can come apart for the same worker. Which rules apply to a given person can turn on who they are to you, whether they live in your home, what the work actually involves, and how many hours they do.

This is precisely why an FMS exists. Self-Determination requires every participant to have one, and this is the reason: the job of a Financial Management Service is to navigate this landscape for families — the payroll, the taxes, the classifications, the clearances, the filings — so that a parent who wanted to hire their daughter's support worker is not also required to become an expert in California wage orders and federal household employment tax.

So when a section below says ask your FMS, it is not passing the problem back to you. It is pointing you at the part of the program built for exactly this, and telling you to use it before you commit to a schedule or a wage rather than after.

Check with your FMS before someone starts

This is the one habit that prevents the expensive mistake, and it takes a phone call.

Your FMS has a responsibility to make sure the money is spent the way your approved spending plan says, and within the DDS rules and the Medicaid waiver behind it. So before a new person starts, they check the practical things: that whoever is providing the service is eligible to, with the right clearances and qualifications, and that what you are paying for is something the program can cover.

The reason that matters is your money. When it gets skipped, the cost lands on you. Someone works in good faith for a month, and then it emerges they were never cleared — so those hours cannot be paid from the budget. The work happened; the money is not there. One conversation beforehand avoids almost all of it.

Worth knowing what an FMS deliberately does not do. They take no part in your IPP or in building your spending plan. That is yours, with your independent facilitator and your regional center — because an FMS influencing what goes into your plan would narrow your choices, and widening them is the point of the program.

On harder questions they are your route rather than the decision-maker. DDS writes the rules and your regional center decides. What the FMS does is work it through with you and take it to the regional center where it needs deciding there — and they do this every week, which you will not.

One thing that surprises people: providers can differ and both be right. An FMS may apply a stricter standard than DDS requires, never a looser one. So if yours asks for something another family did not have to do, that is allowed. What no FMS can do is permit something DDS prohibits.

Hiring someone

Who you are allowed to pay, how to interview well, and what to agree before the first shift.

Who you can pay

Self-Determination lets you hire almost anyone. The exception is a legally responsible person, who cannot be paid to provide services — parents of minor children, and a participant's spouse.

The common belief that relatives cannot be paid is simply wrong. A sibling, grandparent, aunt, uncle or adult child can be paid. And a parent of an adult participant can be paid, because the legal responsibility that existed during childhood ends at 18.

That makes turning 18 a planning moment, not just a birthday. A parent who has given unpaid care for years can be employed and paid from the budget once their son or daughter is an adult. For some households that changes whether the program is workable at all.

Anyone giving direct personal care needs a criminal background clearance before starting, and being a relative does not change that — with one exemption: a family member who lives in the same home as the participant. The line is the household, not the relationship.

Check your own situation with Who can be paid? — four questions, and it shows the DDS language behind the answer.

Interviewing well

You are hiring someone who will be in your home, often alone with someone you love. It is worth doing properly, and most families have never interviewed anyone.

Questions that actually tell you something:

• "Walk me through a shift you're proud of." Past behavior predicts future behavior far better than hypotheticals do. Listen for whether they talk about the person or about the tasks.
• "Tell me about a time something went wrong." Everyone has one. What you are listening for is whether they noticed, what they did, and whether they told anyone. A candidate with no such story has either not worked much or is not being straight with you.
• "What would you do if you arrived and he was having a bad day and did not want to get up?" Use a real situation from your own life rather than a generic one.
• "What do you need from me to do this job well?" The answers are revealing, and it sets the tone that this is a two-way arrangement.
• Ask about the unglamorous parts explicitly. Personal care, incontinence, behavior that is hard to be around. Someone who hesitates now will leave in month three; better to find out across a kitchen table.

Questions to stay away from — and the reasons run both ways:

• Salary history. California bars employers from asking what someone earned before. Ask what they are looking for instead.
• Criminal history, during the interview. There are rules about when this can be asked, and it is not at first meeting. A background check is coming anyway through a proper process — let that process do its job.
• Health, disability, medical conditions. You may ask whether someone can perform the job, with or without reasonable accommodation. You may not ask about their medical history to get there.
• Age, religion, marital status, whether they have children or plan to, national origin, sexual orientation, immigration status. All protected characteristics, none of it your business, and none of it tells you whether they will be good at this.

The practical case is as strong as the legal one. These questions are risky and useless. "Do you have kids?" does not tell you whether someone will show up on Tuesday. "Tell me how you handled a schedule that changed at short notice" does.

Which of these rules bind you specifically can depend on your arrangement, and your FMS is the one who knows. If you want a written question list you are confident in, ask them to look at it before you use it.

Set expectations before day one, not after week three

Most caregiver relationships that fail do not fail over pay. They fail because two people had different pictures of the job and neither said so out loud.

Before the first shift, be explicit about:

• The hours, and how much they can move. If you need genuine flexibility, say so now. If the schedule is fixed because someone's day is fixed, say that.
• What the job actually includes. Personal care, driving, cooking, being in the community, paperwork, the things that are not on any list. This also matters for how they are classified and paid — see the overtime section above — so tell your FMS what the job really involves, not a tidied version.
• How time off works. Sick leave, notice, what happens when they are ill and you have nobody.
• How they get paid and when. Your FMS sets the mechanics; make sure your employee understands them from the start.
• What "a good day" looks like for the person they are supporting, in concrete terms. This is the part families under-explain and the part that decides whether someone is good at this job.

Write it down and give them a copy. Not a legal document — a plain description of the job, the hours and the expectations. It prevents most disagreements before they happen, and it is the single highest-value hour you will spend.

The paperwork is not your problem

Hiring someone generates a pile of forms: eligibility verification, tax withholding paperwork, new hire reporting, required notices at the point of hire.

You do not need to learn any of it. Your FMS handles that side — they will tell you what they need, when, and from whom. What matters on your end is simply that none of it is optional and none of it happens after the fact. Your FMS will not clear someone to start until it is done, which is the system working rather than the system being slow.

Different FMS providers run this differently — different forms, different order, different systems. Ask yours what their process looks like and how long it usually takes, so you can plan a start date that is real rather than hopeful.

Spend your attention on the part nobody does for you: choosing the right person, and being someone worth working for. That is the rest of this page.

What it costs

What an hour of work actually draws from your budget, and the January rise that catches families every year.

What an employee actually costs

Pay someone $20 an hour and it does not cost $20 an hour.

On top of the wage sits employer burden — the cost of employing someone rather than simply paying them. DDS defines it exactly, and the list is closed. Burden costs "are limited to" six things:

• FICA (Social Security and Medicare)
• FUTA — federal unemployment
• SUTA — state unemployment
• Employment Training Tax
• Workers' compensation insurance
• Paid sick leave

Anything else added to your plan is not burden. It may be perfectly legitimate, but it belongs on its own line under its own name.

Burden comes out of your budget. Your FMS's own fee does not. Since 1 July 2022 the regional center pays the FMS fee outside your individual budget. That asymmetry is the most useful thing on this page and the thing most families have backwards: the fee is not the variable — the burden rate is.

Across the eighteen providers offering Co-Employer, DDS publishes rates from 17.23% to 24.86%. On a full-time post that spread is thousands of dollars a year that buys no additional care.

Work out your own numbers with the true cost calculator. Put in a wage and the hours you need, and it shows the real annual draw on the budget.

The calculator opens as its own page so you can keep it beside your spending plan.

The January problem

This is the part nobody writes about, and it catches families every year.

California's minimum wage rises most Januarys — it is indexed to inflation. On 1 January 2026 it went from $16.50 to $16.90. If you employ someone at or near the floor, you must give them that raise.

Your budget does not rise with it. DDS is explicit that such changes are "not automatically applied" to individual budgets. So the same dollars buy fewer hours, and the increase is simply absorbed — usually by quietly cutting back support somewhere.

Two things to do about that, and the second is the one almost nobody uses:

1. Build the increase in at renewal. Budgets renew annually, and that renewal is the designed moment to realign what you have with what things now cost. A family treating renewal as paperwork is spending their one scheduled opportunity.

2. If it lands mid-year, you can ask. DDS's own FAQ says so, and its worked example is this exact situation:

"A participant asks for an individual budget adjustment due to a minimum wage rate increase. Participants must pay all workers at least minimum wage. The IPP team should discuss if the participant's individual budget is enough… If the individual budget is not enough, the budget could be adjusted due to a change in needed resources."

Adjustments are not automatic and in practice they are uncommon — but the path is written down, the department describes it plainly, and the example it chose is yours. Ask for an IPP meeting and point at that language.

Overtime — read the warning before the rules

California's general overtime rules are these. For most non-exempt employees:

When	Rate
Over 8 hours in a day, up to 12	1.5×
Over 12 hours in a day	2×
Over 40 hours in a week	1.5×
First 8 hours on a 7th consecutive day	1.5×
Beyond 8 hours on a 7th consecutive day	2×

Now the part that matters more: those may not be the rules that apply to you.

In-home care is one of the most carved-out corners of California employment law, and Self-Determination sits right inside it. Some of the exceptions are large enough to change the answer completely:

• "Personal attendants" have different thresholds altogether — overtime after 9 hours a day or 45 hours a week, not 8 and 40. A personal attendant is someone whose work is supervising, feeding and dressing a person who needs assistance.
• And whether someone counts as one can turn on how they spend their time. If a worker spends more than 20% of it on other duties — cooking, cleaning, driving — they are not a personal attendant, and the ordinary rules come back. Two caregivers on the same wage can therefore sit under different regimes because of how the job is actually shaped.
• Live-in workers have their own rules again, different from both of the above.
• Family members are excluded from the Domestic Worker Bill of Rights entirely — specifically a parent, grandparent, spouse, sibling or child of the employer. In this program, where employing a relative is common, that exclusion is not an edge case.

So this is a section that can tell you the general rule and genuinely cannot tell you your rule. The thresholds above are the right starting point and the wrong stopping point.

Speak to your FMS before you set a schedule, not after the first overtime week. Several factors specific to Self-Determination decide which set of rules applies to a given worker, and your FMS is the one who works that out with you — and takes it to the regional center where it needs deciding there.

The same is true beyond overtime. Home care and live-in arrangements carry carve-outs in payroll taxes and other employment rules as well, and family employment is treated differently again in several of them. This page does not attempt to list them, because a partial list would be read as a complete one. Ask about your specific arrangement: who the worker is to you, where they live, what the job actually involves, and how many hours.

What you owe your employee

The obligations that come with being an employer in California: insurance, time off, leave and health coverage.

Workers' compensation, and why there is no way around it

California requires workers' compensation insurance from every employer with even one employee. Part-time, temporary, a family member — it makes no difference. There is no small-employer exemption and no household exemption.

It exists because the alternative is worse for everyone, including you. Caring for someone at home is physical work: lifting, transfers, bathing, catching a fall. Back and shoulder injuries are among the most common claims in this kind of work. Workers' compensation pays the medical costs and lost wages when that happens, and in exchange it is generally the exclusive remedy — the injured worker is covered without having to sue the person who employed them. Without it, an injury in your home is a dispute between you and someone you probably care about.

Who actually carries the policy depends on your FMS model, and this is the question to ask:

• Under Co-Employer, it is part of the burden rate applied to your workers' wages — it shows up as a percentage rather than a policy you go and buy.
• Under Sole Employer, you are the employer of record and the policy is yours — you choose it, or your FMS helps you find one.

That difference is easy to miss and expensive to miss. On the DDS burden table, most Sole Employer entries show workers' compensation as "TBD" rather than a number — because the premium depends on your policy rather than the FMS's, so they cannot quote it. So a Sole Employer burden total can look several points cheaper than a Co-Employer one while leaving out a real cost you still have to pay for separately, and the rate you actually pay will likely differ from what the same FMS publishes for Co-Employer. If you are weighing the two models on price, that is the line to look at first — and ask the provider what your real rate would be rather than reading it off the table.

Going without required coverage is a criminal misdemeanor in California, and an uninsured injury is the kind of event that ends a family's ability to keep self-directing at all. Confirm with your FMS who holds the policy before anyone starts work.

Time off

Two things families conflate constantly, and they work in opposite directions.

Paid sick leave is required of every employer — including one employing a single caregiver. There is no small-employer exemption. The minimum is 5 days or 40 hours a year, accruing at one hour for every 30 worked, usable after 90 days. It is one of the six burden components, so it is already inside your burden rate rather than a separate cost to find.

PTO and vacation are not required at all. But if you offer them, three rules bind you — and the last one surprises people:

• Earned vacation is wages, not a perk you can withdraw
• "Use it or lose it" is illegal in California. You may cap accrual; you may not erase what someone has earned
• Every unused hour is payable when they leave, at their final rate

That last rule has a sting in this program specifically: PTO is not employer burden, so a payout was never built into your burden rate. If a caregiver leaves with 60 accrued hours, that money comes out of hours you had budgeted for care. Offering PTO can genuinely help you keep a good worker — just decide it deliberately, cap the accrual from day one, and know the liability follows you until it is paid.

Job-protected leave

FMLA and CFRA give eligible employees up to 12 weeks of job-protected leave — for their own serious health condition, to care for a family member, or for a new child.

Whether they reach the person you employ depends on your FMS arrangement, which is a genuinely complicated question and not one this page can answer for you. Ask your FMS directly: "Under our arrangement, do FMLA and CFRA apply to the person I employ?"

Two things worth knowing before you ask:

• CFRA is much the more likely of the two to apply — it starts at 5 employees rather than 50 and has no worksite-distance test. It also covers a far wider circle: siblings, grandparents, grandchildren, parents-in-law, and even "someone else with a blood or family-like relationship." Ask about both, not just FMLA.
• Job-protected does not mean you pay. An employee may be able to draw California Paid Family Leave or State Disability Insurance, which are funded by payroll contributions rather than by you. You are protecting the job, not necessarily the wages.

Health coverage

The ACA employer mandate requires large enough employers to offer coverage to full-time employees — full-time meaning 30 hours a week. Many caregivers work well under that.

What matters in practice is that FMS providers handle this in at least three different ways: some carry a small group plan, some use an ICHRA, and some do not offer health coverage as a benefit at all.

So the useful question is not "does the ACA apply to me." It is:

"How do you handle health coverage for the person I employ?"

That is answerable, it varies by provider, and almost nobody knows to ask it. It also matters for keeping staff — being able to offer coverage is one of the few levers a family has when competing for a good caregiver.

Where an ICHRA is used, the participant funds it from the spending plan. It is a way of offering coverage, not free coverage, and it is a genuine trade-off against hours.

Records and verification

If someone provides personal care in your home, those visits must be verified electronically. EVV is federal law — section 12006(a) of the 21st Century Cures Act — and it applies to Self-Determination.

Who is responsible follows who the employer of record is, which means it changes with your FMS model:

Your model	Who handles EVV
Co-Employer	Your FMS
Sole Employer	Your choice — use the FMS's system, or take full responsibility yourself
Bill Payer	The vendor or agency

That middle row deserves attention if you are considering Sole Employer. DDS is explicit that a sole employer may "choose to be fully responsible for EVV" — a real federal compliance obligation, on top of arranging your own workers' compensation. Neither is a reason to avoid the model. Both are reasons to go into it knowing.

Keeping someone, and parting company

Losing a good caregiver is the hardest thing that happens to a self-directing family. Most of what prevents it costs nothing.

Being an employer people stay with

Keeping a good caregiver is the hardest problem most self-directing families have, and losing one is genuinely disruptive — it is a care crisis, not an admin inconvenience.

Almost none of what keeps people costs money:

• Communicate like an employer, not a family member in crisis. Give notice of changes where you can. Say when something has gone well, not only when it has gone badly.
• Respect the boundary you set. If you agreed four hours, do not routinely ask for five unpaid minutes that become twenty. That is how goodwill gets spent.
• Pay on time, every time. Your FMS does the paying, but you approve and submit — do it promptly. Late pay is the fastest way to lose someone good, and it is the top complaint category in this program.
• Ask what they need. Equipment, training, a different schedule, a heads-up when the routine changes.
• Handle problems early and in private. A small thing said kindly in week two is a conversation. The same thing unsaid until month six is a resignation.

When it is not working

Talk to your FMS before you act — not after.

The rules protecting employees in California are extensive, and they apply to a household employing one person as surely as to a company. How you document a problem, what notice you give, how a conversation is recorded, how final pay is handled, what you may and may not say afterward — each has requirements, and getting them wrong can turn a difficult situation into a legal one.

This is a collaboration, and it is worth understanding as one:

• You know what is happening and what you need.
• Your FMS knows what the rules require and what the record needs to show. They can usually tell you what to do next, and where something needs a regional center decision they take it there.

Call them at the coaching stage, not the firing stage. Most problems are fixable: unclear expectations, a schedule that does not work, a skill nobody taught. An FMS that knows about a difficulty in week two can help you solve it. One that hears about it for the first time when you have already told someone not to come back is being asked to fix something that has already happened.

And expect differences between providers here. One FMS may have templates, a written coaching process and someone who will sit on the call with you; another may be more hands-off. Ask yours early what support they offer when an employment relationship is going wrong, so you know what you have before you need it.

Still to come on this page

Written honestly, because a half-covered obligation is worse than an absent one:

• Your employee's other rights — wage statements, meal and rest breaks, final paycheck timing. Final paycheck timing in particular has strict deadlines that differ depending on whether someone was let go or resigned. Ask your FMS before the last day, not after.
• Making a claim — how workers' compensation claims and wage claims actually work if one arises.

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This page is information, not legal advice. Employment law changes most Januarys, and the date at the top of this page tells you when it was last checked. For a specific situation — particularly a termination, a dispute, or a leave request — talk to an employment attorney.