Independent contractor renegotiating contract

[remapthesoul]

Hello everyone,

I am an independent contractor hired and paid by the county to work at our local county hospital. I am about to start my last year of a 3-year contract and will be doing my first contract renegotiation. This is my first job out of residency and I like where I am, my colleagues, and patient population. The job qualifies me for PSLF as well, of which I have 4.5 years left. Suffice to say, I would like to stay at this position. I'm paid a base salary with quarterly RVU, teaching, and admin bonuses. My only "benefit" is 20 days of paid vacation per year. I didn't do much negotiating with my first contract and felt that may have been a mistake. So, my question is whether there are "standard" things that I can and can't ask for as an IC (i.e. other than pay & bonus increases)? Is it reasonable to ask for such things as additional sick/PTO days, CME reimbursements, state/DEA license renewal reimbursements, etc.? Or are these considered benefits that only someone employed is given? Appreciate your advice and comments.

[Zaphod]

You dont sound like an IC at all, which is pretty true of many IC positions for the most part, but yours especially so.

[YSH]

Zaphod wrote:

You dont sound like an IC at all, which is pretty true of many IC positions for the most part, but yours especially so.

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I agree with Zaphod.  You might want to seek professional advice on this. Good luck.

[jfoxcpacfp]

You can negotiate anything, even if it's not specifically described as a "benefit", i.e. higher hourly contract pay to reimburse you for specific benefits you are required to cover yourself. Some 457b plans even cover IC's. I agree with the above advice, however, that you should seek advice from a professional firm that specializes in contract negotiation, such as Contract Diagnostics.

[Drsan1]

They should be paying for licensing etc. Agree with above though if you have PTO etc, you sound employed. The beauty of IC is the flexibility to work as much or little as you want. With benefits, PTO, set schedule etc. why do you say you are an IC. Is it because you have to cover your own tax payments?

[Zaphod]

Drsan1 wrote:

They should be paying for licensing etc. Agree with above though if you have PTO etc, you sound employed. The beauty of IC is the flexibility to work as much or little as you want. With benefits, PTO, set schedule etc. why do you say you are an IC. Is it because you have to cover your own tax payments?

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This and other regulatory costs are always the answer. Most ICs in america are employees.

[remapthesoul]

Thank you everyone for your replies. To clarify, I do not receive PTO, health insurance, or any other benefits from my position and I do cover my own tax payments. I say that I'm an IC because I receive a 1099 and my contract states that I am a contractor. The concept of negotiating for reimbursement of benefits that I cover myself is a great idea that I will consider, but I think I will also look into getting some professional help. Thank you again!

[pulmdoc]

I think the consensus (and I agree) is that you are being misclassified as an IC when in fact you are an employee. Just because they treat you like an IC doesn't mean they should.

[Craigy]

What exactly does someone do about being misclassified?

[jfoxcpacfp]

The burden is on the employer as that is who makes payment to the vendor/employee. If the employer is found to have used the wrong classification, they are responsible for any unpaid taxes, such as unemployment and unpaid FICA and also for benefits that were not paid (401k contributions, insurance, and so forth). It can be a real mess if the employer is successfully sued by IC workers who should have been reported as employees. This has been done many times - it is a huge undocumented liability on the part of the payor. I would not want to be the CPA or CFO of such an organization or group.

[pulmdoc]

If someone is misclassified as an IC, step 1 is to discuss with HR, and if they still think you are an IC, get a letter to that effect. Step 2 if you are unsatisfied with their response is to file with the IRS form SS-8, which will lead to the IRS inquiring with both you and your employer the nature of your work relationship. The IRS will issue a ruling which is effectively binding whether you are an employee or not.

The reason to not allow yourself to be misclassified is that IC's have to pay the employer half of FICA/Medicare tax, as well as being ineligible for employee benefits (health insurance, PTO, malpractice coverage, etc).

Physician independent contractor positions are appropriate for "per job" employment. For example, a locums tenens hospitalist may be paid a flat amount per shift, with the hospitalist having control over how many shifts they accept. A salaried position with base+wRVU bonus setup does not qualify and you should be an employee, with access to appropriate benefits accordingly.

[jfoxcpacfp]

pulmdoc wrote:

If someone is misclassified as an IC, step 1 is to discuss with HR, and if they still think you are an IC, get a letter to that effect. Step 2 if you are unsatisfied with their response is to file with the IRS form SS-8, which will lead to the IRS inquiring with both you and your employer the nature of your work relationship. The IRS will issue a ruling which is effectively binding whether you are an employee or not.

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Correct. The downside to doing this is losing your contract, which is a very real (implied) threat. Unfortunately, the system doesn't always run like clockwork and by the time the IRS gets around to making their final determination after notifying the employer that an SS-8 has been filed, the pseudo-contractor may find themselves looking for another job. I would not recommend taking on a large, well-funded employer unless you are determined to make a point and change the system, have access to good legal advice, and deep pockets.

Of course, for some (many?) doctors, IC may be preferable to employment, so why rock the boat?

[pulmdoc]

IMO, being an IC as a doctor is only preferable if you are actually independent. Being eligible for a solo 401k is a plus, but having health insurance and other benefits is a bigger plus in most circumstances. If you aren't going to have the upside income potential of a private practitioner, why not get the benefits of employment?

An employee/IC who files an SS8 and is subsequently terminated should have standing to sue under FSLA for retaliation.

It's certainly possible that there is a mistake, and a visit to HR would result in reclassification. That's why I recommend that course of action first before filing SS8.

The part of OP's story that makes the least sense to me is that they work for a county hospital. I can see a small group having the naivity or greed to misclassify, but a governmental employer ought to have lawyers reviewing physician contract offers to make sure they stay on the right side of the law. Perhaps the county's budget is so busted that the managers are trying to cut corners?