Understanding Employer Obligations and How Clara Helps
When you begin home care services with Clara, we’ll ask for your Social Security Number (SSN). We understand that sharing sensitive information can raise questions, so here’s a breakdown of why we request it and how we use it to protect you, your caregiver, and ensure full compliance with state and federal laws.
Your SSN Enables Clara to Support You as a Household Employer
Hiring a caregiver for private duty home care means you’re technically becoming a household employer. Clara takes the complexity out of that process by handling all the behind-the-scenes employer responsibilities for you, starting with the use of your SSN.
Here’s how:
Registration with Federal & State Agencies
Clara uses your SSN to register you as a household employer with:
The IRS (to obtain an Employer Identification Number or EIN)
The California Employment Development Department (EDD)
This is a legal requirement for anyone employing a caregiver in their home.
There is no cost to you, and Clara handles this entire process on your behalf—no paperwork, no stress.
2. Full-Service Payroll & Tax Management
Once registered, Clara automates all aspects of your payroll:
We track caregiver hours, including any overtime
Withhold and file federal and state taxes
Pay your caregiver through direct deposit
Generate weekly paystubs
Send you a clear, itemized invoice each week
At the end of the year, we generate a single, simplified tax form (Schedule H) for you to attach to your tax return.
This system makes you eligible for thousands of dollars in federal tax credits, like the Dependent Care Tax Credit.
3. Workers' Compensation Insurance Coverage
California law requires all household employers to carry Workers’ Compensation Insurance to protect both you and your caregiver in the event of an on-the-job injury.
Clara:
Partners with a trusted agency to secure the policy
Manages the insurance completely on your behalf
Includes the cost in your weekly invoice, so there’s no separate billing
Terminates the policy for you if you ever discontinue care with us
This ensures you’re protected from personal liability and fully compliant with state law.
What This Means for You
By sharing your SSN:
You meet all legal employer obligations without lifting a finger
Clara handles the setup, payroll, taxes, and insurance seamlessly
You enjoy peace of mind and more time focused on care, not paperwork