Legal Question in Business Law in California

The answer would depend on whether you have a contract with the facility, and if yes, its terms. Did you contract to provide services for a specific period? Did you agree that the person providing the services would be contractors or employees? If there is no contract at all, then it is likely that the facility can simply elect to terminate your agency's services.

I don't think the previous answer takes into account that you are contracting with the elderly persons or their relatives directly, and apparently not with the independent-living or assisted-living facility.

Your question probably has a non-legal as well as a legal explanation or answer. The facility management is trying to enforce a policy for the protection of its elderly residents, properly motivated by the clear fact that among the honest caregivers there is a small percentage that are either dishonest from the get-go or who will be tempted by opportunity. I have personally dealt with a situation where a caregiver to an elderly relative looted my relative's bank and other accounts. So, the non-legal reason is that the facility wants your company to take more responsibility for the performance and honesty of the caregivers.

Legally, I'm unaware of any statute that would control here, i.e., any law giving independent or assisted-care facilities a right to set rules for whom may come in as a caregiver. Assuming there is no such law, ordinary legal principles would govern, and I believe they favor freedom of the elderly resident to select whomever they choose regardless of firm employee status whenever the ownership or control of their living unit is in their own hands. On the other hand, when there is a contractual relationship between the elderly person (or his/her family) and the facility, so that the elderly person's status is something less than that of a property owner or tenant, the facility may be in a legal position to control the elderly person's visitors and employees.

My suggestion would be to have a face-to-face discussion with the manager(s) of the facility who are laying down this policy, during which you can (a) explain your policies for screening and/or bonding your caregivers, and (b) inquire about the legal basis for the facility's claim of a right to require that you, rather than the elderly resident, be the caregiver's employer.

What part of 'private property rights' did you not understand. It is the property and business of the facility, from which they can refuse entry or service as they chose. As a 'visitor' to their patients, you are limited by the contractual terms and rights between the patients and the facility, to have visitors or others come onto the property. Get a copy of the contracts with your clients to see what those terms are. Any intelligent facility will have terms that allow the facility to bar anyone creating problems, conflicts, or that is adverse to the facility's interests. You are obviously providing services in conflict with the facility's own care givers and potential profit. Try to work out a 'deal' with the facility.