North Texas Dentistry Volume 9 Issue 1 2019 ISSUE 1 DE | Page 16

I
WHO’S WORKING
IN YOUR OFFICE?
Employees vs. Independent Contractors
n looking at a variety of sources, it can be confusing to
determine if workers in a dental office can be paid as inde-
pendent contractors (no payroll taxes withheld and a 1099
sent at the end of the year if the $600 threshold has been met)
or as an employee (income taxes withheld, FICA taxes withheld
and matched, and a W-2 sent by January 31 for previous year
earnings). In almost all cases, dental practices will need to pay
any workers as employees rather than independent contractors.
When looking at the Texas Dental Practice Act, Chapters 262
(Regulation of Dental Hygienists) & 265 (Regulation of Dental
Assistants) both include language stating these professionals
both work under the supervision of a dentist. This language,
along with the statues of the Texas Workforce Commission
(TWC), states a person is an employee if they are under the
“direction and control” of the business.
The IRS also outlines three categories to help determine the
proper classification of a worker (source: IRS Fact Sheet FS-
2017-09, issued July 20, 2017) :
Behavioral Control
A worker is an employee when the business has the right to
direct and control the work performed by the worker, even if that
right is not exercised. Behavioral control categories are:
Type of instructions given. When and where to work, what
tools to use, or where to purchase supplies and services – receiv-
ing the types of instructions in these examples may indicate that
a worker is an employee.
Degree of instruction. More detailed instructions may indi-
cate that the worker is an employee. Less detailed instructions
reflects less control, indicating that the worker is more likely an
independent contractor.
Evaluation. Systems to measure the details of how the work is
done points to an employee. Evaluation systems measuring just
the end result point to either an independent contractor or an
employee.
Training. Training a worker on how to do the job — or periodic
or on-going training about procedures and methods — is strong
evidence that the worker is an employee. Independent contrac-
tors ordinarily use their own methods.
16 NORTH TEXAS DENTISTRY | www.northtexasdentistry.com
employment news
by Audra Morris
Financial Control
Does the business have a right to direct or control the financial
and business aspects of the worker’s job? Consider these key
characteristics:
Significant investment. It is less typical for workers to
invest significantly in the equipment they use if they are inde-
pendent contractors.
Unreimbursed expenses. Independent contractors are more
likely to incur unreimbursed expenses than employees.
Opportunity for profit or loss. This is often a distinguishing
indicator of an independent contractor.
Services available to the market. Independent contractors
are generally free to seek out business opportunities.
Method of payment. An employee is generally guaranteed a
regular wage amount for an hourly, weekly, or other period of
time even when supplemented by a commission. However, inde-
pendent contractors are most often paid for the job in the form
of a flat fee.
Relationship
The type of relationship depends upon how the worker and busi-
ness perceive their interaction with one another. This includes:
Written contracts. Contracts which describe the relationship
the parties intend to create. A contract stating the worker is an
employee or an independent contractor is not sufficient to deter-
mine the worker’s status.
Benefits. Businesses providing employee-type benefits, such
as insurance, a pension plan, vacation pay or sick pay have
employees. Businesses generally do not grant these benefits to
independent contractors.
Permanency of the relationship. An expectation that the
relationship will continue indefinitely, rather than for a specific
project or period, is generally seen as evidence that the intent
was to create an employer-employee relationship.
Services provided. The extent to which services performed by
the worker are seen as a key aspect of the regular business of the
company.