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A question for our lawyers who deal in contracts.

Posted on 07/18/2020 7:34:11 AM PDT by LouAvul

This scenario is hypothetical. A dental hygienist works for a dentist. She is his employee.

He furloughed her during the pandemic but now called her back part time. Before he puts her back on full time, she has to sign a new contract.

Previously, the hygienist and the hygienist's dental assistant were both employees of the dentist. The dentist paid all costs associated with both employees.

Now, the dentist insists the hygienist pay the expenses of the assistant out of the hygienist's revenue.

The hygienist is concerned concerning tax issues.

Opinions?


TOPICS: Business/Economy; Chit/Chat; Miscellaneous
KEYWORDS: atendollaropinion
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To: KevinB; LouAvul

This is not a contract question.

It is an employment and contractOR question.

You sat hygenist was furloughed. This q implies dentist is now terminating the person, closing the position and now shopping contractors.

If that is the case the contract can be whatever the market will bear. For example, my current contract does not cover expenses but the rate is high enough to cover them (easily).


21 posted on 07/18/2020 8:17:02 AM PDT by freedumb2003 ("Do not mistake activity for achievement." - John Wooden)
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To: LouAvul

Not enough information. What is the corporate structure(s)? How is revenue derived?


22 posted on 07/18/2020 8:17:49 AM PDT by CodeToad (Arm Up! They Have!)
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To: drdirt333
The question is the problem. I can't fit it into the given scenario for this business. There's no way around it. He's hiring two separate individuals....contract employees.

They would of course receive a substantial increase to cover the cost of any benefits and the increase in SS contributions.

I don't see this as workable in this business because of the liability.

23 posted on 07/18/2020 8:18:35 AM PDT by Sacajaweau
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To: LouAvul

Dentist will be fined as the business is his and both are employees of his company


24 posted on 07/18/2020 8:27:37 AM PDT by Vendome (I've Gotta Be Me https://youtu.be/wH-pk2vZG2M)
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To: LouAvul
The dentist is hiring her back as an independent contractor. She needs to charge a higher rate to cover her overhead
25 posted on 07/18/2020 8:30:33 AM PDT by vigilante2 (Make liberals cry again)
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To: LouAvul

Non-lawyer here. My take is the dentist is NOT asking her to employ the assistant. I could be wrong but that is my reading of the OP.

All it says is the dentist wants her to to cover the costs of the assistant. To me this means she gets a pay cut equivalent to the salary of the assistant. That is if she continues using the assistant.

Or perhaps she can continue without the assistant in which case there is no pay cut.


26 posted on 07/18/2020 8:31:08 AM PDT by plain talk
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To: LouAvul

Without having read all of the replies, I have a question. I am 80-years old yet I have never visited a dental hygienist that had the luxury of a dental assistant. Why would a hygienist need an assistant? This must be some super upscale dentist office where only the wealthy go. Dental hygienist seem to be able to freely hop from one job to another because my dentist changes hygienist like I change underwear. I wonder if this person really had to worry about job security. Tell the dentist to take a flying leap.

Something else I have noticed in my years of going to the dentist. I never see any hygienist that are anywhere close to the common retirement age of 60 to 65. They are always young—all of them. Same for the physical therapists. I always assumed that the jobs were so boring that most left the professions to pursue something more satisfying.


27 posted on 07/18/2020 8:33:27 AM PDT by Saltmeat (69)
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To: LouAvul

https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation


28 posted on 07/18/2020 8:36:14 AM PDT by Behind Liberal Lines (Their side circles the wagons. Our side revs up the bus)
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To: Saltmeat
Something else I have noticed in my years of going to the dentist. I never see any hygienist that are anywhere close to the common retirement age of 60 to 65. They are always young—all of them. Same for the physical therapists. I always assumed that the jobs were so boring that most left the professions to pursue something more satisfying.

Males like to have young females rubbing up against them. If I ran a dental office that's who I would hire also. :-)

That said, I think you may be right that the job is so tedious one can only take it for so long.

29 posted on 07/18/2020 8:39:26 AM PDT by KevinB (Quite literally, whatever the Left touches it ruins.)
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To: Dilbert San Diego

Owning my own practice and having employees — if. you control an employees schedule and determine where and what they do — you have yourself a W2, not a contractor.

This is not legal advice, but employment law is a genuine pain in the ass — recommend that you get legal advice from a trained and licensed professional


30 posted on 07/18/2020 8:52:45 AM PDT by gas_dr (Trial lawyers AND POLITICIANS are Endangering Every Patient in America: INCLUDING THEIR LIBERTIES)
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To: LouAvul

I think the dentist’s CPA gave him/her this idea.
It is likely a no-go BECAUSE under the rules set forth by the IRS the hygienist is subject to the control and supervision of the dentist.
Also, I wonder what his malpractice carrier says about the arrangement.
People are frequently tempted to save money with these shady methods. And they are truly shady. (Maybe the dentist should go with an employee leasing arrangement.)
Also, the dentist will likely be foxing him/herself out of a large amount of the Qualified Business Income Deduction, as it is based payroll (among other factors).
As for your comment about this being “hypothetical” - I get it. And we probably don’t even have all the facts.


31 posted on 07/18/2020 9:42:22 AM PDT by Honest Nigerian
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To: Vendome

“”””””Dentist will be fined as the business is his and both are employees of his company”””””

I was in the construction business for decades. I saw it happen many times that small companies would call their employees “independent contractors” and give them a 1099.

I saw many of them go out of business when they got caught and had to pay seven years worth of back taxes on these employees. When one of the agencies catches you, for instance the unemployment office, they call their friends at the IRS, State tax people, Workers Comp etc. and they nail you to the wall. The tax obligations cannot be removed by bankruptcy so you are screwed.

You CAN call them independent contractors and give them a 1099 but they will need their own Federal Tax I.D. Number and insurance among other things.


32 posted on 07/18/2020 9:48:03 AM PDT by shelterguy
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To: Responsibility2nd

“On her own for taxes and insurance.”

AND she’ll have the greatly added burden of having an employee of her own for which she’ll be responsible for withholding and remitting income, SS, and medicare taxes to the feds and state along with all the attendant forms and paperwork, as well as a year-end W-2 ...

at a minimum, she’ll need to form some type of legal entity to embody all of that, such as an LLC to protect herself from unlimited personal liability ...

also, as an employer herself, she’ll be subject to the burdens of hiring and firing, and even worse, meeting myriad regulations and laws at the local, state, and federal levels regarding the treatment of said employee (maternity leave, sick leave, affirmative action, unemployment insurance, etc.), AND subject to criminal and civil penalties from same, PLUS nearly unlimited liability from the employee themselves ...

also, there’s the issues of health insurance for her and her employee ...

basically, when one is an employer, there’s not much difference between one and fifty employees in terms of complication and difficulty ...

in overall concept, this dentist wants to force her to establish a business contracting out dental hygienists to dentists, not too different than a temp agency ...

she should tell this dentist to go pound sand ... it’s extremely doubtful that fool can convince any dental hygienist to engage in such a ridiculous activity that’s beneficial only to himself ...


33 posted on 07/18/2020 10:01:54 AM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: moovova

“Seriously, my dentist comes up with new things to wring money out of his reclining dental chair, in which I’m sitting.”

absolutely ... i’ve quit going to multiple dentists like that and have been very fortunate to find an awesome dentist who is co-owner of a franchise here in my town called Comfort Dental, which has a very inexpensive dental insurance plan plus a fixed priced list for everything they do:

https://comfortdental.com/


34 posted on 07/18/2020 10:06:18 AM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: LouAvul
I am not a lawyer, although I’ve often been told I missed my true calling, but as someone with over 25 years of payroll management with much experience and expertise in payroll and HR legal compliance - IRS and DOL, OSHA among many other regs, here is my take:

If the hygienist was the employee of the dentist prior to the furlough, he or she is likely still the dentist’s employee when returning from said furlough.

That is unless the hygienist has in between the furlough and returning, has on her or his own accord set up and gone into their own business and is offering services to any and all dental offices as part of a legally registered business, one offering services to not just their former employer but to any and all dental offices willing to hire said business as a subcontractor and able to take or refuse entering into business agreements and able to set their own price for said services. Otherwise he or she is still an employee of the dentist.

And FWIW, no employment contract can, even if signed by both parties, violate certain aspects of employment law - IRS or Department of Labor (FLSA) regulations or federal or state employment law.

In other words, you could not have a non-exempt (hourly) employee as defined by the FLSA, sign a “contract” with an employer that they will work more than 40 hours per week but agree not be paid time at time and a half overtime for hours worked over 40 hours per week or as an FLSA defined non-exempt employee be paid less than the federal or state minimum wage (whichever is higher); such a “contract” even if signed by both the employer and employee would never stand up in a court of law.

@Behind Liberal Lines in post #28 posted a link to the IRS website: Understanding Employee vs. Contractor Designation”. That is a good resource as is this one:

https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/employingindependentcontractors.aspx

The following factors have been considered significant in determining independent contractor classification:

The extent to which the services rendered are an integral part of the principal's business.
The permanency of the relationship.
The amount of the alleged contractor's investment in facilities and equipment.
The nature and degree of control by the principal.
The alleged contractor's opportunities for profit and loss.
The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
The degree of independent business organization and operation.

An employer cannot arbitrarily or legally reclassify an employee as an “independent contractor” for the sole purpose of avoiding to pay employer payroll taxes (FICA and FUTA and SUTA) or to shift normal and customary business expenses to what by law is an employee (see below).

Now, the dentist insists the hygienist pay the expenses of the assistant out of the hygienist's revenue.

Assuming that the former employee – the formerly employed dental hygienist truly now qualifies and meets all the legal qualifications of being an independent contractor, he or she cannot be forced to assume the cost, i.e. the employment expenses of the dental hygienist assistant currently employed by the dentist, a W2 employee and under sole control by the dentist.

There is also FWIW a quirk in the law regarding an independent contractor having supervisory control and the ability to hire or fire or reprimand employees of their clients’ that may render their status as an independent contractor vs and employee into question.

That assistant IMO would now be the employee of the hygienist but only if said hygienist is actually an independent contractor, i.e. a true business concern and not an employee of the dentist. And in that case the dental hygienist assistant would now be the employee and under the sole control of the dental assistant as part of her or his independent business and so said dental assistant could be assigned to work other assignments, at other dental offices at the discretion of the business owner, i.e. the dental hygienist’s business.

If the dental assistant remains an employee of the dentist as well as that of the assistant, there are state regulations governing what payroll deductions are allowable. And deducting anything from an employee’s pay aside from taxes, legally enforced garnishments, child support orders and voluntary agreed to deductions for retirement, health and welfare benefits are typically not allowed. An employer cannot simply deduct operating expenses from an employee’s pay.

35 posted on 07/18/2020 12:00:49 PM PDT by MD Expat in PA (No. I am not a doctor nor have I ever played one on TV. The MD in my screen name stands for Maryland)
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To: LouAvul

I am not a lawyer.

The hypothetical dentist is basically asking the DH to start their own business, release him from liability of the DA, and contract services to him while remaining constrained in salary and expectations of an employee. In Calif, it would be illegal for him to ask that of an employee, especially if both were on his payroll prior to the layoff. Not to mention the liability ins. issues with him and with the DH not to mention chain of command employment issues this scenario creates.

Without saying a word to the hypothetical dentist, I’d march that contract to the nearest state labor board and file a complaint, (which will protect you against his retaliatory unemployment challenges) and then sue the living crap out of him for being a complete dick.


36 posted on 07/18/2020 12:21:47 PM PDT by blueplum ("...this moment is your moment: it belongs to you... " President Donald J. Trump, Jan 20, 2017))
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To: shelterguy

Almost all smaller construction businesses do not have many employees. Almost every task is completed by a subcontractor.

1-3 office people, an estimator/sales/project manager person if the owner doesn’t do it himself.


37 posted on 07/18/2020 12:43:29 PM PDT by WASCWatch
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To: WASCWatch

I’ve been in the business since the 1970’s but thanks anyway.


38 posted on 07/18/2020 12:48:37 PM PDT by shelterguy
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To: catnipman

Holy cow...their Gold Plan is cheap AND very inclusive. We’ve looked for something like that but haven’t had any luck. We figure we’re into those “one or two caps a year” phase of our lives, which can get expensive.

Also like the...”Members may receive emergency dental care for the relief of pain, bleeding or swelling from any Comfort Dental dentist at any Comfort Dental office when their selected provider is unavailable.”.

Plus, they’re open eves and Saturday.


39 posted on 07/18/2020 2:27:34 PM PDT by moovova
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To: moovova

yeah, it’s a great plan ... and as far as i’m concerned ALL other private so-called dental insurance is a giant ripoff ...

the trick i think is to find a dentist at a local Comfort Dental franchise that you trust ... we lucked out and had a referral to a dentist from a friend who really sang his praises and she turned out to be correct ... since he’s the only dentist at Comfort Dental with whom i’ve dealt i can’t speak to the competence of their dentists in general ... each franchise is independently owned by the partner dentists, so one could check the online reviews and ratings of a particular franchise and a particular dentist ...


40 posted on 07/18/2020 5:29:48 PM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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