Choosing a bargain, off-the-books caregiver may seem like a lifeline for cash-strapped families, but it can rapidly spiral into six-figure lawsuits and medical errors, said Dr. Gregorio ‘Greg’ Sanchez Jr., co-owner of two local Home Instead franchises and co-chair of the California chapter of the Home Care Association of America.
Sanchez said families who pay cash can effectively become employers, exposing themselves to wage, overtime, and injury claims that can wipe out any inheritance.
Attorneys he consults with report that 98 percent of such cases are settled out of court, often for large sums, so the public rarely learns about the problem.
Sanchez cited three recent examples to illustrate the threat.
In the first, a senior living alone hired a private caregiver who, after watching a Facebook webinar on worker rights, filed a wage-and-hour lawsuit that settled for six figures. In a second case, an aide who had worked five years without complaint sued a family trust for unpaid overtime shortly after the client died — again ending in a six-figure payout. In the third case, a caregiver slipped while lifting her client, injured her back, and—because the homeowner had never told their insurer a worker was there—secured another six-figure settlement directly from the family.
California regulators are signaling tougher oversight. Sanchez pointed to Amity In-Home Care Services, saying it was recently fined $2.3 million, the first penalty under Assembly Bill 594 for misclassifying caregivers as independent contractors. Families who pay under the table could face the same statutes, Sanchez said.
He calculates that a 24-hour shift should legally cost about $450 a day, far above the $200 cash rate he still sees advertised by many unlicensed caregivers.
His “Buyer Beware” flyers warn families bluntly: “A decision to save money today by hiring a ‘Private’ or ‘Registry’ caregiver could lead to major legal expense down the line.”
The financial peril is matched by medical risk.
Sanchez learned this firsthand when his own parents nearly hired a church friend to care for his grandmother.
“My mom, in passing, told me, oh, yeah, we’re having so-and-so from the church come over, we’re going to interview them to take care of grandma,” recalls Sanchez.
Despite his expertise—a USC chemistry doctorate, 15 years in pharmaceutical research, nearly a decade running licensed home care—his parents were swayed by price.
During the interview, the prospective caregiver assured them she could handle insulin.
“Oh yeah, I’m diabetic too. I completely understand. Yeah, I know how to dose insulin. I can do that, no problem.”
Sanchez pressed further, asking what dose she’d give his 220-pound grandmother.
“You give her the same amount I take,” the applicant, who weighed about one hundred pounds, told Sanchez.
“Right there, red flag just went up for me,” Sanchez says. “You can’t have this lady come into this house if she’s presenting as someone with medical knowledge and doesn’t know how to appropriately administer insulin.”
But cost pressures lead families to consider private caregivers.
Agency prices in Los Angeles County have climbed from $24 an hour a decade ago to about $40 today because, unlike “private” or “registry” caregivers, licensed home care agencies are state regulated and must pay over the annually increasing minimum wage, and skyrocketing insurance premiums, in addition to all the costs of being an employer in the state of California,” Sanchez said.
Those higher rates cover payroll taxes, required workers insurance, background checks, and regular oversight.
Sanchez’s push for professional standards earned his team a 2023 CalGrows Innovation Grant and, in 2025, recognition as a “key employment partner” in a $1.84 million state workforce program.
Families determined to hire privately should, he advised, use a payroll company, notify their homeowners insurer in writing about the worker, and retain a geriatric care manager for additional guidance and spot checks.
“Those three actions would help mitigate the risk of lawsuits,” Sanchez said, “but again, you still have that lack of consistent oversight.”
Sanchez’s caregiver-screening checklist can be requested through Home Instead Pasadena at (626) 486-0800. For more information, click here.
