Workers Compensation and Employer Burden
Workers Compensation and Employer Burden
One of the most misunderstood parts of hiring staff through the Self-Determination Program is the true cost of being an employer. Families and participants often think of wages in terms of the hourly rate they agree to pay an caregiver. For example, if a caregiver’s wage is set at $20 per hour, the assumption is that $20 is the full cost. In reality, paying wages is only one part of the total expense. When you become a co-employer, there are required legal and financial obligations that increase the actual cost of employment. This is where the concept of employer burden comes in.
What We Do
Sentinel Four’s Employer burden Rate Breakdown:
Employer burden refers to all the additional expenses beyond an caregiver’s base wages. These include items such as workers’ compensation insurance, employer payroll taxes, unemployment insurance, and in some cases, paid leave accruals. Each of these components is mandatory under state and federal law, and they protect both the employer and the caregiver. For example, workers’ compensation insurance ensures that if an caregiver is injured while working, their medical costs and lost wages are covered without the participant being personally liable. Employer payroll taxes (such as Social Security, Medicare, and state unemployment) are required contributions that help provide caregivers with access to benefits like retirement and disability insurance. Collectively, these employer responsibilities typically add between 19%–25% on top of wages, though the exact percentage can vary depending on the type of work, risk classification, and state requirements.
At Sentinel Four, we make sure families fully understand this additional cost. When we present a spending plan, we don’t just show you the caregiver’s hourly wage — we also calculate and clearly display the employer burden rate. This transparency allows participants to plan realistically, ensuring their budget can sustain the caregivers they want to hire. For example, if you budget for a caregiver at $20 per hour, you need to plan for the full cost — often closer to $23–$25 per hour once burden is included. Without this understanding, families can find themselves over-committed and under-funded, which may result in services being disrupted later in the year.
Our role is to protect participants from these surprises. We handle the setup and maintenance of workers’ compensation coverage, pay all the employer taxes, and track burden costs against each participant’s budget in real time through the portal. This way, you’ll always know how much of your budget has been spent and how much remains available. More importantly, you can feel confident that your caregivers are protected, your legal obligations are met, and your services are not put at risk due to unexpected costs.
Managing Budgets With Accuracy and Accountability
Caregivers paid on time, families supported without delays.
