TO BE, OR NOT TO BE, AN INDEPENDENT CONTRACTOR:
Should Veterinarians be Treated as Independent Contractors or Employees?
By Robert S. Nelson, Esq.
Nelson Law Group
There are questions that have puzzled and perplexed the great minds of our time: Why are we here? Are we alone in the universe? Is there really a Sasquatch?
And, only slightly less baffling: What is the difference between independent contractors and employees, and how can you tell them apart?
This is one of the most important (and vexing) questions in employment law. Whether a person is considered to be an employee or an independent contractor affects whether that person’s employer can be held liable for his or her wrongdoing; who will be held responsible for the person’s state and federal taxes; and whether the person will be entitled to various protections and benefits, including overtime pay. Independent contractor status is an especially important issue for veterinary practices. Many practice owners treat veterinarians as independent contractors, especially “relief” vets. This practice likely derived from the fact that federal and state tax regulations say that veterinarians generally can be considered independent contractors. But the regulations presume that veterinarians will be working for themselves, rather than for practices owned by someone else. In other words, the independent contractor presumption from the tax regulations will not apply to veterinarians working for practices they do not own. In those situations, independent contractor status will be determined by looking at the degree of control that the practice has over how the veterinarian performs his or her job.
When a practice exerts close control over a veterinarian’s job performance, the vet likely will be deemed to be an employee. But when a practice allows a veterinarian to perform the job largely as he or she pleases, then the vet is more likely to be deemed an independent contractor. Control is determined by numerous different criteria that essentially function as votes in favor of either independent contractor or employee status. Each different criterion suggests either that the person is an independent contractor or an employee; when the results of the criteria are tallied, theoretically there should be a clear determination. The problem is that the criteria are not all counted equally, nor are they always clear. For that reason, it is often extremely difficult to distinguish independent contractors from employees.
The following are the criteria most commonly used to differentiate independent contractors from employees:
•(1) The right to control the manner and means used to accomplish a job.
If an employer can control where, when and how a person does his or her job, then the person will be presumed to be an employee. In other words, if an employer can require a person to report to a set location for designated work times (e.g., 9 to 5), and/or if the person can be required to adhere to specific policies and procedures (such as conduct, attire or performance policies typically found in employee handbooks), then the person will be presumed to be an employee.
(2) The skill and supervision usually required for the work.
The more skill needed to perform a job, the more likely the person performing it will be deemed an independent contractor (on the theory that highly skilled workers require much less supervision). Conversely, the more direct supervision a job requires or receives, the more likely it will be deemed to involve an employee.
(3) Who provides the tools, instruments and employees needed for the job.
Where special tools are necessary to perform a job (e.g., x-ray machines) and the tools are provided by the employer, then the person performing the job is presumed to be an employee. Who hires subordinate employees to assist with the job is also relevant; if the person performing the job is allowed to hire and fire subordinates, then the person is presumed to be an independent contractor.
(4) Length of assignment.
The longer a job assignment lasts, the more likely the person doing it will be deemed to be an employee.
There are numerous other criteria that may also be used, depending on the circumstances.
Criteria (1) generally will be the deciding factor for most veterinarians. The more that veterinarians are required to adhere to the specific policies and procedures of a practice, the more likely it is that they will be deemed employees. Criteria (2) theoretically cancels out criteria (3) (vets are highly educated and skilled, whereas practices usually provide the equipment), while criteria (4) suggests independent contractor status, at least with regard to relief vets. Practice owners should be wary about treating relief vets as independent contractors when they perform substantially the same jobs as full-time employees. In those circumstances, it may be difficult to explain why the same job warrants different status. Any decision to treat a veterinarian as an independent contractor should be carefully weighed and considered in light of the potential benefits, risks and difficulties that the decision will likely entail.
Robert S. Nelson is the founder of the Nelson Law Group, a San Bruno, California based law firm specializing in labor and employment matters that relate to veterinary practices. He regularly counsels and assists clients with alternative workweek issues. He can be reached at 415-689-6590, or by email.
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