May 24, 2016
One of my colleagues was venting to me about his other job. Similar to one of my other jobs and that of many of my dentist friends, he works as an independent contractor for eight hours straight, with no scheduled break. Our "shared" job is completely opposite; in fact, the boss told me that many years ago, he got fined by the IRS for classifying his associates as 1099 employees. My question is, why do so many employers incorrectly/potentially illegally treat employees as independent contractors, and how can some of these employers get away with not giving their associate dentists?
It seems to me so many dentists are classified as independent because of their part-time status. Dentistry, unlike a lot of other areas of healthcare, has a lot of part time work available. Medical covers this need with Locum Tenens arrangements. Dental employers seem to prefer to pay on the 1099 to avoid the hassles of set up and administration of payroll for an employee, and also to save a few dollars on the extra cost for employees. On the other hand, the worker prefers to be classified as independent so they can potentially claim certain deductions out of their own entity. Of course whether a worker qualifies as independent has zero correlation to the "preferred" payment method and entirely dependent on the circumstances of the employment. The IRS provides a few litmus tests to consider when making a classification - and each depends on how much control and autonomy each respective party has over the engagement. Here is a link to the IRS site -https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee.
Safest best is to classify as an employee, which is oftentimes probably the correct classification as the patients are the employers, as well as supplies, ancillary staff and services.