Are Physicians, Doctors, Dentists, Psychiatrists or Therapists Independent Contractors or Employees in a Private Practice?

Misclassification of workers in the healthcare field is a hot issue and it is an area where many practices make a misstep leading to potential exposure involving the Department of Labor (DOL). Many practices treat physicians, doctors, dentists, therapists or similar professionals as independent contractors instead of as employees. The New York State DOL can investigate your practice’s workforce classifications. Depending on the circumstances this can raise some legal concerns. The New York Court of Appeals decision, In Re Concourse Ophthalmology Associates P.C., 469 N.Y.S.2d 78 (1983) discusses the proper employment status for multiple ophthalmologists working in a professional corporation. The court issued the following test for medical providers in determining whether an employee-employer relationship exists for purposes of the Unemployment Insurance Law:

The employer interviews the professionals or screens their credentials, selecting the individual it believes will best meet the client’s needs;

The employer delineates the professionals’ duties in writing or orally;

The professional’s hours worked, even if part-time, are regularly scheduled rather than occasional or periodic;

The number of hours or the schedule of shifts that the professional works is fixed by the employer;

The professional is required to sign in when reporting for a shift;

Timesheets must be submitted or hours are subject to verification;

The employer establishes a fixed or relatively uniform weekly or hourly fee;

The professional receives a percentage of the amounts charged to patients that he or she treats;

The patients belong to the employer and not the professional;

The services rendered at done at the employer’s premises, using the employer’s equipment, supplies and support staff;

The employer provides centralized services and support staff such as receptionists and bookkeepers;

The employer books patient appointments and assigns patients to particular professionals;

The employer bills its patients and is responsible for collection of fees;

The employer’s patients are prohibited from paying the professional directly;

The patients’ records are prepared and maintained by the employer;

The employer reserves the right to dismiss the professional; and

The employer restricts the professional’s ability to work and has some form of non-competition restriction in place.

In general, the more control that a practice exerts over the work environment it is more likely to lead to a finding of an employer-employee relationship. It is important to get legal counsel from the beginning of the working relationship with a professional so a misclassification error is not made. If a misclassification error is made, a practice can face, among other things, unpaid taxes, penalties, fines and be subject to further government investigation. It can also be subject to a lawsuit by the workers for misclassification. Proactive steps are critical and can save a practice a lot of money and heartache. Contact our Award Winning NY Employment Law Attorney for a confidential consultation on your specific situation.

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