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?
It’s a proposed contract. She need not agree and can go elsewhere or she can negotiate by making a counter offer.
Not a lawyer, but it would seem there was never a legal break in her employment so she is under the original contract. However, as with any employer, they can change the terms of employment under most cases, not retroactively however. The employee has the right to refuse the new contract and quit. Not a great option, but my guess is that the office culture my no longer be acceptable anyway.
You are talking about a change in employment terms.
Previously she was an employee. Now a contract is introduced? Totally different arrangement. She will now be a contract employee. On her own for taxes and insurance.
raise the rate to the dentist to cover the new administrative costs and add 35% for miscellaneous... then hire the asst. pass the costs to the dentist
The hygienist is now self-employed, similar to workers at many salons.
That person has business expenses and deductions to now take.
Im a lawyer not unfamiliar with contract law. I have no idea. That’s a tax and employmeny law question more than contract law.
Consult a tax attorney, I’m not sure an employer can deligate or avoid employment tax liability to another employee. I,ve never heard of it being done.
Or I don’t understand your question at all
the contract has been altered, pray I do t alter it further.- Darth Vadar.
As well she should be, And be concerned about the costs of hiring a dental assistant and doing payroll and etc. for that person. Since when are dental hygientists expected to form a PC or LLC or whaterver just to clean teeth?
Ridiculous.
I am a lawyer. You said it’s a contract question then say it’s taxes she’s worried about. What is the actual question?
It could be that she was working as an employee before and he is hiring her as an independent contractor now. As an independent contractor, she would be responsible for her own health care, withholdings, etc. . There is, of course, nothing wrong with that arrangement if she's agreeable. The issue from the IRS perspective would be whether she is really an employee disguised as an independent contractor. Employers try that often to avoid providing benefits and paying payroll taxes. There is a lot of law on that. As you correctly pointed out, it's not clear whether the OP is asking an employment law question, a contract question or a tax question.
My dental hygienist works at a few different dentist’s offices. I don’t know if she’s an employee or a contractor.
This is just part of the growing trend of people being contractors, as opposed to employees.
“”””” 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. “”””””””””””’’’’
I had employees for 40 years and this sounds ridiculous.
He is telling her to start her own company and hire an employee. She will be responsible for UI insurance, Work Comp, withholding liability insurance etc.
I’d tell him no way. Hire your own people.
I agree. If the hygientist accepts, she would become the employer of the assistant. Hence she would be liable for paying nor only the salary for the assistant, but also withholding for taxes, worker’s compensation, etc. In addition, she would want to obtain professional liability insurance for herself and the assistant.
If the dentist wants to exercise control over the assistant, then this is all a sham, as she would really be acting as his employee.
Did the dentist apply or receive a PPP government loan/grant? If so he is obligated to rehire the assistant or face repayment of the PPP loan.
she may want to mention that in her counter proposal that includes a large pay raise and a some tweeking by a real business law attorney.
If she quits...she loses unemployment too.
I’d look at the contract for terms of termination. Go back to work and look for new work on the side.
In states where a hygienist cannot be a sole proprietor this contract is illegal because the hygienist cannot employ a subcontractor.
As an independent contractor you may engage the services of another independent contractor.
In that status, the Dentist must provide you a form 1099-Misc (miscellaneous income) that testifies to the IRS what you were payed as in independent contractor. You are responsible for paying the taxes on that income. However if you engage a subcontractor that earns more than $600 per year, you must provide that person a 1099-Misc that notifies the IRS. The amount thus payed is deductible by you as business expense and in theory, the IRS knows it and all is well.
However, if you are a corporation or engage to provide services as a corporation, the Dentist need not provide a 1099 for payments to a corporation but you must provide your subcontractor a 1099 for the payments for services to be deductible as a corporate expense
This testimony is provided by a corporate independent contractor with subcontractors who make more than $600/year. Some of my clients provide 1099’s as a matter of course because others they employ do not have corporate identities.
PS:I think everybody should have a small corporation.
No personal knowledge about what I’m about to say but...
I think dentists must go to seminars on “how to increase your income”. Seriously, my dentist comes up with new things to wring money out of his reclining dental chair, in which I’m sitting. This is probably just another tactic the hygienist’s dentist learned while attending one of these seminars.
Same thing happens at my dermatologist’s office (he’s a cosmetic surgeon also). Any time he says they have a new procedure to try on me...”but we’ll have to get your insurance company’s ok first”...I know it’s gonna set me back a lot of $$$.
...also has the “old” contract expired? Was she full or part time originally? Is the assistant a necessity considering that she will be part time herself?
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