Independently Contracted Relief, Is It Worth It?

November 2, 2019

So, you need to find some temporary help in your clinic? Where do you begin?

1. Locate a relief pool of veterinary professionals.
2. Interview them to ensure they fit within your clinic’s core values.
3. Investigate IRS publication 15a to ensure you are following the rules for employment classification regarding “independent contractor” (IC) vs “employee.”
4. Hire a lawyer to draft a legal contract agreement.
5. Ensure proper licensure and insurance, including workers’ compensation and liability.
6. Discuss schedule alignment.
7. Negotiate pay.
8. Consider drug testing and background checks.
9. Provide a 1099 form to each IC by January 31.

I’m exhausted just thinking about how much money and time you must commit when considering an Independent Contractor (IC)! Even if you follow all the rules, you’re still taking risks and opening yourself and your clinic to major liabilities. And, this doesn’t apply only to relief veterinarians, it’s also true of relief technicians. Only you and your practice can determine whether the risks and rewards are worth bringing an IC into your hospital. Consider the following:

Better for all

Many clinics are moving toward utilizing reputable staffing companies to fill gaps in their schedules. As a result, relief pools are going by the wayside, making it more difficult to locate a dependable veterinary professional IC. As someone who has done relief in the past as an IC technician, I can say that it stinks! I didn’t have benefits, and paying taxes at the end of the year was a nightmare.

Time is money

In my experience, practice managers and owners have little time. If you don’t have time to interview people for an employment position within your hospital, do you really have time to interview for relief positions? No. Instead, rely on the staffing companies to do all the legwork (their account managers can be more helpful within your practice than you could imagine). Are you really saving money by using an IC vs a temporary staffing company? Probably not. Once an IC has accounted for taxes, insurances, certifications, etc, their rate is typically not much different than a staffing company’s rate. If you’re paying your employees overtime to make up for gaps in your schedule, you’re spending more than what it would cost for a staffing agency and burning out your staff, which increases costly turnover.

Employee classification matters

Did you know that you can hire a person who is considered an IC, but in the eyes of the IRS, that person may actually be an employee? Not knowing the rules can land you in hot water and can be an expensive mistake. If the IRS reclassifies an IC as an employee, the veterinary practice must pay all back taxes, plus a penalty ranging from 12 to 35% of the amount owed. It can also lead to the practice being held liable for past income, FICA, unemployment insurance, and benefits, including paid time off, 401(k) contributions, etc. Various agencies can also impose statutory penalties amounting to thousands of dollars for each violation. More importantly, the fines and costs can be attributed to losing your occupational permit, business license, or other specialized licenses. If a worker is terminated and files for unemployment compensation or social security benefits, you will be alerted to the failure to pay the required payroll liability. The costs of fighting litigation against the IRS and other agencies can quickly bankrupt you and your business. 

Insurance matters

IC’s are not eligible for workers’ compensation coverage through your practice, and employers are not required to purchase coverage for independent contractors. That being said, the practice has an obligation to ensure that each person is insured, otherwise you can be held responsible for injuries, which can result in lawsuits and payments of medical bills. Taking such a huge gamble and putting your job, your practice, and everyone else’s livelihoods in jeopardy isn’t worth it. Respect your employees’ work-life balance; save time, money, and sanity; and decrease your liability and burnout by giving staffing companies a try.