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Merechap, since you haven't signed a contract with the current agency, I don't know if they can enforce their policies. Maybe that is a quick question you could ask of one of the free on-line legal answers sites.
Also, the agency's policy probably applies to you hiring the caregiver directly -- if she were to go independent she can't take her old clients with her, for a year. But I am not sure they can prevent another agency from sending her to your home. This is really a question for a lawyer.
While your caregiver may only be getting 1/2 of what you pay the agency, some of that 1/2 goes for medical coverage, taxes and insurance paid by the agency.
You state that she's the only one "able to handle" your MIL, but there's no indication what MIL's issues are. If she's combative, you also have to consider the issue of possible claims of injury.
You might just contact your insurance agent to find out how much extra liability you'd need to carry - and whether they would even issue that kind of liability for a private party.
I'm wondering if there's something else going on between the caregiver and the agency that has prompted her to want to go private.
Gladimhere post above has a good point. My boss went through that with a caregiver for his wife, he had to pay a finder's fee. After he became *the boss* he was being more demanding on her time and what kind of work to do around the house, thus after 6 months she left.
And he was paying the caregiver directly as an *independent contractor* thus the caregiver needed to pay her own estimated quarterly taxes. Turns out she didn't understand that process and never paid her taxes.
Freqflyer is right. There is probably a contract with the agency that spells out what happens in this kind of situation. If the caregiver has agreed in the contract not to go to work directly for a client within x time of leaving the agency, you may face some difficulties or a gap in care.
Pam is right. You will take on new responsibilities in paying for her services. Therefore to maintain the same expense to you, you will not be able to pay her the same amount you were paying the agency. You might be able to pay her more than half of what she is getting, but certainly not close to double what she is getting from the agency.
I've been employed both ways. Both are honorable. But getting a job through an agency and then bailing to work for the same client directly is not considered quite ethical. And there are contract clauses against it.
I suggest that your caregiver negotiate with her agency, trying for a larger slice of the pie. Also that she continues to work for you through the agency. She should start planning ahead to her next job, and explore the ramifications of going independent at that point, finding her own job and setting her own terms.
I hope this works out so that she continues to care for your MIL.