Understanding the Differences
Summer is here, and all thoughts turn to vacation. As the owner of your own dental practice, you are probably very much in need of a getaway, but you are also very aware of the financial and logistical difficulty that taking one would present. Even taking off for just a few days would mean having to shut down the office, and that means that you have to reschedule all of the already-scheduled appointments, and lose revenue besides. Doing so is just untenable – but so is the notion of never having a vacation again until after you retire. The time may have come for you to bring on another person, but should you hire another dentist or just bring in an independent contractor for when you want to get away? It’s a question worthy of serious consideration, and the answer can have serious consequences.
Making the Right Choice
It can be very tempting to bring on another dentist to help out in your practice – not only would that address the question of whether you can ever take another vacation, but would also alleviate nagging concerns about what to do when you’re ill, or want to attend a professional conference, or even go to your daughter’s first grade play. Before you jump in and start posting ads on professional sites, you should stop and think about whether hiring an independent consultant might provide you with the same advantages, or perhaps even more.
Advantages and Disadvantages of a New Hire
There’s no doubt that when you bring on an additional dentist, you not only free up your own schedule but also provide yourself with the opportunity to grow the practice. Additionally, when you hire somebody you are that person’s boss, and are able to dictate exactly how and when the work and what their responsibilities will be. By the same token, bringing on another staff member means paying out more in health insurance premiums and insurance. It also means that you need to allocate space and equipment for them to use, and you increase the costs for administration as well.
Advantages and Disadvantages of an Independent Contractor
If you opt to bring on an independent contractor, that person assumes their own costs in terms of health insurance, and rather than having your office staff bill for them, they will simply bill you. You can arrange for them to provide coverage when you are gone without having to invest in additional equipment or space, and provide yourself with the opportunity to take a much needed breather.
Know the Consequences of Your Decision
It is important that before you make your decision, you have educated yourself on the differences between an employee and an independent contractor in the eyes of the government: both the IRS and the Department of Labor have strict definitions and requirements for each, and if you make the wrong move you could find yourself on the wrong end of a lawsuit.
Ten Topics to Address in Making Your Decision
Though the topic can be complex, careful consideration of the following ten topics are a good place to start in determining what kind of help best suits your purposes. All of them basically go to the question of whether you will be the additional individual’s boss, or whether you will be their client.
- Who will be determining what the individual will be paid?
- Will I need to train the individual, or will they already have the skills I need?
- Do I want to pay employment taxes for this person?
- Do I want to add this person to my practice’s insurance policies, offer them vacation and sick time or retirement benefits?
- How much responsibility to I want to give this person for decision-making and other key business processes?
- Do I want to be in charge of where and how this individual works, or will they be largely self-directed?
- How much time will I actually need this individual to work?
- Does the person I hire need to remain exclusively my employee, or can they work for others?
- How long will I need this person? Could another person with the same skills do the job?
- Do I want to provide this person with an employee manual regarding the conduct I expect?
The answers to these questions will provide you with a much clearer picture of whether an employee is what you’re looking for or whether an independent contractor would meet your needs. If you have further questions about the implications of each, contact our office to set up an appointment.
Should you require any clarification or explanation, please contact our office at (540) 678-9497 for a consultation!