Running a home care agency means stepping into a world of trust — caring for vulnerable clients often in their own homes, with families watching closely. But with that trust comes liability: everything from slips and caregiver mistakes, to data breaches, misuse of client property, or even vague misunderstandings over care plans can lead to lawsuits.
Fortunately, many of those risks are avoidable. By investing in strong staff training and background checks, documenting everything thoroughly, keeping solid insurance policies in place, having systems in place to avoid payroll errors, and maintaining compliance with all relevant laws and regulations, you’re not just protecting your agency — you’re upholding your reputation, protecting your clients’ well-being, and reducing stress, financial risk, and disruption.
Here, know how you can build a defense that keeps your agency safe from employment-related risks.
To shed some light on the same, we interviewed a home care industry expert to bring his perspective on how to protect your home care agency from lawsuits.
Sami Asaad is a seasoned labor & employment law partner who helps business leaders manage legal risk in today’s workplace. He advises healthcare staffing and home care agencies nationwide.
Sami guides clients on matters from wage & hour compliance and sensitive personnel decisions to emerging issues like remote work, mobile-app privacy, employee drug testing, alternative wage payments, and accommodations for psychological disabilities.
He defends employers in lawsuits and administrative investigations and regularly presents at industry webinars and seminars.
Let us now delve into what he has to say about how to protect your home care agency from lawsuits.
In my experience, home care agencies tend to face more termination-related lawsuits by office staff such as care coordinators and schedulers. Whether the termination involves a member of the office team or a caregiver, termination-related suits often stem from the agency either lacking clear policies or lacking consistent enforcement of those policies.
For example, an employee who is terminated for poor attendance is more likely to make a claim if she or he knows that other employees also had poor attendance and that standards were not consistently enforced.
Without clarity in policies and enforcement, the reason for termination can also seem unclear. A lack of clarity makes it difficult to defend against allegations that the “real” reason was some form of illegal discrimination or retaliation.
I actually just addressed this in my quarterly newsletter, in which I included a template for managers to coach employees without using the typical “formal written warning” style that managers often hate.
As managers already know, they first should speak to the worker about both the problem and how that problem affects the business. The key, however, is to end the conversation by asking the worker whether they understand and commit to making the desired change. Then, the manager can follow up with a simple email thanking the worker for their understanding of the need to change and for their commitment to making that change (e.g., starting each shift on time).
This approach documents issues in a conversational way that is more comfortable for everyone involved while still maintaining clarity and objectivity.
In home care, wage and hour issues are typically more common during the course of employment (e.g., ensuring pay for all hours worked) than when ending employment. That said, many states have laws requiring that a terminated employee’s pay be issued within a specific period.
For example, while many states allow final pay to be paid on the next regularly-scheduled pay period, some states require final pay on the same day or the next day. Agencies can generally find the answer for their specific state by checking the state’s labor department website.
Arbitration provides a lot of protections to agencies, especially larger ones. The most notable protection is that within a valid arbitration agreement, the parties can agree to resolve disputes only on a one-on-one basis, that is, without a class action or collective action.
For home care agencies, especially those who have live-in workers, wage and hour class and collective actions are the most expensive types of claims. They are also claims that typically have the least amount of insurance coverage. Therefore, using an arbitration agreement to avoid such claims can be extremely beneficial.
Arbitration also allows parties to resolve claims privately without a record of the case permanently being out there on the internet. Agencies need to understand, however, that arbitration has costs.
For example, under the rules of the major arbitration providers, employers typically must pay for the arbitration, which can cost tens of thousands of dollars if the case goes to a full hearing. In general however, most agencies see the benefits mentioned above as being worth the cost.
The key to having policies that give an agency confidence is to ensure they actually match the culture and practice of the agency. For example, if the agency has a flexible office culture around attendance and punctuality, having a “three strikes and you’re out” attendance policy would undermine the agency’s confidence in terminating an employee for attendance-related issues.
An agency that wants to maintain flexibility in office attendance while preventing rampant poor attendance would need a tailored policy that acknowledges both the flexibility and the need for consistently showing up to support fellow team members.
On the hiring side, job descriptions undermine an agency’s confidence and increase risk when they include inaccurate requirements (e.g., a 50 lb lifting requirement when the job requires no lifting) or contain requirements that the agency routinely ignores.
Job descriptions that actually match the role provide the agency with confidence to make hiring decisions that are based on the legitimate needs and goals of the agency.
In closing, protecting your home care agency from litigation isn’t about avoiding risk — it’s about proactively managing it. As Sami Asaad emphasizes, clear, consistently enforced policies, precise documentation, strategic use of arbitration agreements, and rigorous compliance with wage-and-hour laws all make your legal foundation stronger.
When your agency’s practices align with its written rules and evolving legal requirements, you reduce exposure and instill confidence in leadership. Stay vigilant, keep legal counsel in your corner, and treat prevention as a core business function — that’s how you transform liability into stability and ensure your agency thrives.
AI Hub
