Employee or Independent Contractor? What's an Acupuncturist to do?

Oct 26

Are you a new Acupuncturist?

Were you just offered an amazing JOB, to be brought on as an Associate?

Was the offer an independent contractor position?

Watch out! It’s probably not as great as it looks.

Listen in as I explain why.

ACU-042 Okay, so you've graduated and now you have to decide what's next. Maybe you already know where and who you're gonna work for, or where your clinic's gonna open, or who your ideal patient is, and maybe even what your treatment focus will be, but. I doubt it because life doesn't really work that way for most of us, and in my experience working with and supporting new practitioners, you don't really know what's next upon graduation.

Life gets jumbled again. You relocate, you have babies, you get divorced, you interview for jobs, you work for other acupuncturists, you share space and or you start your own business, et cetera, et cetera. But here's the truth. The snapshot taken five years after your initial career choice after your initial start as an acupuncturist is typically radically different.

So what you thought you wanted changed the location where you started no longer suits you. You worked for three practitioners before you found a clinic that resonates with your treatment style and goals. You thought you wanted to treat women's health challenges only to find out that hospice is where you truly belong.

I wanna tell you a little secret. It's okay, . It's supposed to happen. Just as it happens. You aren't doing it wrong and you aren't failing. You did some serious growth in school. We went in as like, I'm gonna be super cheesy here for a second, but you went in as a caterpillar and now you're about to fly.

Seriously. Now think about this. Think about how much you have changed from the beginning of school to where you are now. And I know that this is super cheesy, but serious. Take some time to get used to those wings, like take your time and be gentle with the new version of you. If Chinese medicine teaches us anything, it's that everything has cycles and so does your career.

You're going to have to learn to grow into your practice, and it's okay to change directions, and it's okay to change your mind about things as your experience levels change.

What you’ll learn:

• Employee vs Independent Contractor as defined by the IRS.
• The history of the FLSA, (Fair Labor Standards Act) which in 1938 set minimum wage and standard guidelines of employment.
• The present politics. How Trump changed it and how Biden is working to re-instate the original and make further, more solid distinctions.
• How the business owner benefits and the associate does not benefit as an Independent Contractor.
• Current standard payment as an employed Associate.

Resources

• IRS Definition
• Recent publication Oct 2022 in federal register of Biden trying to reinstate original emphasis on definition.
• Article on Bloomberg Law website discussing how Trump changed the emphasis on how to delineate between IC and Employee and how Biden is working to change it.
• Episode 20 with MaryAnn Geness who has experienced all sides of the dime and explains how to determine what role you are playing as a new associate.

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Okay, so you've graduated and now you have to decide what's next.

Maybe you already know where and who you're gonna work for, or where your

clinic's gonna open, or who your ideal patient is, and maybe even what

your treatment focus will be, but.

I doubt it because life doesn't really work that way for most of us, and in my

experience working with and supporting new practitioners, you don't really

know what's next upon graduation.

Life gets jumbled again.

You relocate, you have babies, you get divorced, you interview for jobs,

you work for other acupuncturists, you share space and or you start your

own business, et cetera, et cetera.

But here's the truth.

The snapshot taken five years after your initial career choice after your

initial start as an acupuncturist is typically radically different.

So what you thought you wanted changed the location where you

started no longer suits you.

You worked for three practitioners before you found a clinic that resonates

with your treatment style and goals.

You thought you wanted to treat women's health challenges only to find out

that hospice is where you truly belong.

I wanna tell you a little secret.

It's okay, . It's supposed to happen.

Just as it happens.

You aren't doing it wrong and you aren't failing.

You did some serious growth in school.

We went in as like, I'm gonna be super cheesy here for a second,

but you went in as a caterpillar and now you're about to fly.

Seriously.

Now think about this.

Think about how much you have changed from the beginning of

school to where you are now.

And I know that this is super cheesy, but serious.

Take some time to get used to those wings, like take your time and be

gentle with the new version of you.

If Chinese medicine teaches us anything, it's that everything has

cycles and so does your career.

You're going to have to learn to grow into your practice, and it's

okay to change directions, and it's okay to change your mind about things

as your experience levels change.

When I started my massage career, I went from being a doula teaching infant

massage and working with pregnant women to working for a chiropractor, to

having my own clientele of competitive athletes within a five year span.

And it was so deliciously fun at that five year mark when I

finally figured out my place in it.

Same thing with my current practice, you guys.

It has been a crazy, wild first five years I moved to what I thought was my

dream town, started my solo practice, had a successful first year on my

terms, what I decide success is.

But basically I was paying myself at the end of that first year and I was able to,

So, but then I got taken under financially by the pandemic to be quite honest,

and I went home and started a podcast.

And then I relaunched my practice again, and I did it in a shared space situation

This time until I landed what I thought was my dream clinic space where I had two

treatment rooms, a nice little walk-in area, in a super cute part of town, and.

I did that only to realize that what I really, really was craving professionally

was other people to collaborate with, and this office space was so tucked

away that there was none of that.

And I really had to face the harsh truth that while I live in one

of the most beautiful cities in the world, I require sunlight.

just so you guys know, I lived in the Pacific Northwest and,

and I also required friends and.

And I was not getting that.

I was not having that experience there partly because of the pandemic, and

partly just because it's, it just my life.

It just didn't happen.

It just wasn't flowing.

So, I moved back recently back to my pre-medical school hometown, and

since I've moved back, I have had two outstanding job offers that I bet anyone

who has owned their own clinic and understands overhead and business stuff

would honestly be sort of jealous of.

So, wait.

Holy cow.

What did I say?

Job?

Yes.

Yes, I did.

, in the last five years, I have learned that starting two baby

businesses at once, a clinic and a podcast is almost impossible.

You guys, I have been strong, thin, , really, really thin, trying

to do both of these things at once.

And what I do know about business is, or anything in life, what you focus on grows.

And my focus has been divided in my energy going in so many directions

that it's hard to be successful in one thing if you're everywhere else.

Let me repeat that.

You gotta listen.

It's hard to be successful in one thing if you are everywhere else.

And remember that collaboration goal.

Well, I wanna work in a collaborative community, but I don't want.

Or run it or start it.

. So that equals j o b.

And that is a perfect segue to today's topic.

Should you be an independent contractor or an employee?

And what's the difference?

I recently saw this question from a new practitioner in social

media and realized that I hadn't actually ever talked about this.

So for all of you new practitioners who wanna start your career working

with or for other people here is some super valuable information, super

valuable to the point where like a lot of practitioners who are 20 years in

don't even know this or understand this.

So before I dive in, I just wanna take a minute with a quick

call to action if you follow me.

You know, I like calls to action.

I tell you guys to do this all the time.

But first of all, I wanna encourage you to join my newsletter.

The newsletter is a place where I go a little deeper on topics that I talk

about in the podcast, but I also offer up important links to current events that

pertain to us, like loan forgiveness, I give extra business tips and clinic

magic to help you with your practice.

And lastly, I also include all of the links from the shows to give

you a second opportunity to grab something that interests you.

Just in case you get side bared.

After you listen to the podcast, you can sign up for

my newsletter in the show notes

if your podcast platform supports that, or on my website or in my Instagram bio.

Okay, here we go.

How to know if you are an independent contractor or an employee.

First of all, I wanna define independent contractor.

Independent contractor is actually a designation from the irs.

Like it's a category from the irs.

So, , Basically the general rule, the, and this is taken from the IRS website,

which I'll also link I'll, everything that I'm citing cuz I'm citing a bunch of

different resources in this podcast today.

So I will put them all in the show notes and once again, they'll be in the

newsletter if in case you miss them.

So based on the definition by the irs, the general rule is that an

individual is an independent contractor.

If the payer has the right to control or direct only the result of the work and not

what will be done and how it will be done.

Okay.

And I'm gonna get into more details in the, in the.

In the meat of the episode, but that's basically the definition.

Historically, where did this come all, Where did this all come about?

Congress enacted the F L S A, the Fair Labor Standards Act in 1938.

Roosevelt did this, and he did this because he wanted to create a

standard of pay, meaning the minimum wage, and a standard work week.

At the time, it wasn't 40 hours a week, but it is now.

And then a standard age of employment.

? He set the labor age at 16 basically.

So kind of got rid of child labor.

But in doing this, they sort of began to define what was an employee and what was.

A business owner or a contractor or like a gig contract.

So I'm going to share this with you, bear with me.

I'm gonna read it, but I'll read it with some BAAs.

So anyway, this is, this is from recently.

Congress enacted the FL s a fair Labor STA Standards Act in 1938 to eliminate

labor conditions detrimental to the maintenance of the minimum standard of

living, necessary for health efficiency and general wellbeing to workers.

To this end, the f.

L S A generally requires covered employers to pay non-exempt employees, at least

federal minimum wage for all hours worked and at least one and a half times.

The employee's regular, regular rate to pay for every hour

worked over 40 hour work week.

The act also requires covered employers to maintain certain records

regarding employees and prohibits retaliation against employees.

Discharged or discriminated against after, for example, inquiring about

their pay or filing a complaint with US Department of Labor.

However, the FFLs a's minimum wage and overtime pay protections do not

apply to independent contractors as explained below, as used in this

proposal, the term independent contractor refers to workers who, as a matter of

economic reality, are not economically dependent on their employer for

work and are in businesses for the.

Such workers play an important role in the economy and are commonly referred to

by different names, including independent contractor, self-employed, freelancer,

regardless of the name of the title, used the test for whether the worker is

an employee or independent contractor under the F L S A remains the same.

So we're gonna get into those requirements that the F L S A put out there.

But I do wanna talk about what's happening current.

In the political arena,

When Trump was in, when Trump.

in office.

He filed with the Department of Labor to change this ruling a little bit, and so

the focus changed a little bit under Trump and that came about because I think, and I

didn't dive into this, but because of the Uber drivers were independent contractors,

yet there was always this question.

If they got injured on the job, then they were not covered by Uber.

And so there they, it just became this whole big thing about whether or not Uber

was considered independent contractor gig or they should be employees.

And so that's what happened there.

And I think, I don't know, I can't speak for Trump by any means, but he

changed this a little bit and tried to sway it a little bit so that.

It worked more in the favor of people who were employee should have been employers.

One of the reasons that somebody would want to hire an independent

contractor as an, as a hire an well, I'm just gonna say hire an independent

contractor, is because they're not responsible for paying your taxe.

They don't have to pay any taxes on you, and they're also not responsible

for covering you in case you get injured, versus if you are an employee

employer, you have to pay taxes on that individual and you also have to

take care of them if they get hurt.

Biden has recently filed with the Department of Labor again to change the

ruling back with more emphasis on the classifications of what it is, what it

means to be an independent contractor.

So I found this really great article in B.

Bloomberg Law I'll once again leave that link for you guys, but basically

I just want to kind of share what a couple paragraphs here because

I think it's really important.

So the temp, the Trump test included five factors, but two were given

far greater weight, the nature and degree of the worker's control

over the work and the worker's opportunity for profit or loss based

on personal initiative or investment.

Now Biden has recently proposed to change it back and put a little more

emphasis in a different direction.

So this just recently happened here in October, I think it was filed, and you

can find this article now publicly.

I think it was October 13th, 2022.

The new bottom proposal, we consider those two factors and four others.

Investments by the worker and the employer.

The degree of permanence of the working relationship, the extent

to which the work performed is an integral part of the employer's

business and the degree of skill and initiative exhibited by the worker.

So, I'm gonna say that again cuz I know that it just sounds hodge-podge

and if you're driving, that might have just flown right over your head.

So basically.

The two first two factors are that, that, that are involved.

So there's six factors involved in this whole entire decision on what makes

somebody an independent contractor.

One The nature and degree of the worker's control over the work.

So in other words, is, is the worker, if is the person who hired you, do they

have control over what you're doing?

And then the other, the second one is the worker's opportunity

for profit or loss based on the personal initiative or investment.

So in other words, are they making a full profit when they do the.

Or is somebody else taking a cut?

The Biden proposal, and these are the other four factors, Investments

by the worker and the employer.

The, the degree of permanence of the working relationship and the extent to

which the work performed as an integral part of the employer's base business.

And the degree of skill and initiative exhibited by the worker, the Department

of Labor may also consider additional factors beyond those six if they indicate

the worker may be in business for themselves according to the proposal.

So the proposed rule also provides additional analysis of control,

and this is the important part.

So listen up . So these proposed rules are including H, including how

scheduling, supervision, price setting, and the ability to work for others

should be considered when analyzing the degree of control over a worker.

So what they're saying is if somebody's in control of your scheduling, they're

supervising you, they're setting your prices then that would be considered

an employee employer relationship, not an independent contractor.

I think this is important because.

This has changed quite immensely over the years.

It used to be pretty standard for chiropractors, acupuncturists

to be independent contractors.

This has changed immensely over the last 10 years.

I had a discussion in episode 20 with my friend Maryanne Jenn.

Now, Maryanne was a, she's been everything.

And she was a wealth of knowledge.

You guys need to listen to this episode.

If you are considering buying a practice, selling a practice, being an independent

contractor, wanna be an employee, like she's covered every possible aspect

of being in business and owning a business that you can possibly imagine.

We discussed being an independent contractor in that episode.

Again, that's episode 20, and we start discussing independent contractor

situations at about minute 40.

So here are some things that we touched on that she said.

So basically the industry has changed immensely in the last 10 years.

It used to be stand industry standard actually to be an independent contractor.

Contractor.

If you were an associate, that's how people brought you on.

But it has changed greatly.

So again, independent contractor is actually a legal

definition defined by the irs.

It's an attraction.

It's, it's sort of, in the past it was like an attraction to

the business owner because.

That way they don't have to pay employee taxes, which they pay about.

This is rough estimate, but if you're new to the game, here's the way it works.

If you own your own business, if you are, you own your own clinic, you pay about.

About, depending on your classification and how you pay yourself, but you're gonna

pay about 30% in taxes on your income.

And so when you're hired by somebody, typically they pay 15.

And then as an employee, you pay 15.

Right?

So if they hire you as an independent contractor, they don't

have to pay any taxes on you.

And then also too, they don't pay any work compensation taxes either.

It's, that's why people hire independent contractors in the

healthcare field if they do.

But what happens when they do that is they cannot control your schedule.

They cannot tell you when you have to be there.

They cannot set your prices for you.

They cannot tell you how to chart.

So this came out in the conversation with Maryanne.

She basically said like, if you.

If you have someone working on a regular basis and you're

controlling aspects of their job, then they should be an employee.

For example, if you have a set schedule and you have to ask if you can take

a vacation, then you're an employee.

If you have to chart notes in a certain way, you are an employee.

A true independent contractor position would be sort of

like if you're filling in.

At a practice, say for like somebody who went on maternity leave, that would be

in, You go in, you do a job, you leave.

If the business owner and part of the contract, honestly, too, is like in that

situation, is I'm coming in, I'm doing this job, and that should be written out.

I'm going to show up from eight until five, or whatever that person's

hours are that you're covering.

I will see the X amount of patients and you should actually have a true

contract for that type of situation.

Another indication that you are an employee is if the business

owner is doing the billing, then they're controlling the money.

So that would be another employer situation.

Unless maybe you're just experie sharing the expense of the bill, but I don't

even see how that could happen cuz you're gonna be billing under different NPIs.

So anyway if you're taking a percentage, you are an employee, when you go

and you interview with different companies and they wanna hire you as

an independent contractor, those are the questions you need to ask them.

Are you gonna control my schedule?

Are you going to collect my patient's payments?

Are you going to.

Make me chart a certain way.

You know, if you're sharing an ehr, then that's actually, they're

taking on you as a liability.

I think.

Like I think in, I don't know, that one's spec, that one's speculation.

But I mean, you start sharing things like that and now you're looking at

it like a very sharing situation.

So either you're in a partnership or you are.

An employee.

Sorry guys.

I personally would not go work for somebody as an independent contractor

unless I was just doing a gig job.

Like I was only a temporary hire and, and just gonna be there briefly.

Then I might consider it.

But I work as an independent contractor occasionally to edit

audio from Acupuncturists who are putting podcasts out there.

So sometimes they'll get hired and do work, but that's gig work.

Like that's, that's a start and end.

And that is a situation where I'm an independent contractor.

. I don't think the trend in the future is to be an independent contractor.

I think there are too many ways that can get mixed up and crossed, and it's really

not in your, not to your benefit as a new practitioner to be hired that way.

So I know now I know.

Your next question is, what about payment?

Right?

Like how much should you be paid?

I hear senior practitioners gripe about new practitioners constantly because

especially when they're hiring, right?

Like if they're hiring people, they say, New practitioners act entitled

because, and the truth is you're hurting cuz you just spent four years in school

again and it was hard and you think you deserve to be paid the big bucks now.

And I agree.

But when people hire you, there are certain things that you probably don't

know because you haven't run a practice.

When you, when somebody hires you and you see patients, their overhead is

probably running in the realm of 50%, five oh, 50%, 50% of your that patient

visit payment when they came to see you.

50 is going to the overhead of the company, and so if you go in

thinking that you're gonna make 70% of your patient visit pay,

you are in a dream world, complet.

. Even if you practice on your own, you are not gonna make 70% of what

you charge for a patient visit.

I'm sure there's somebody who's going to prove me wrong.

Go ahead and try, that's fine.

Like, but for the majority, unless you have some crazy specific, like you own

your building already or something like that, like typically, here's how it works.

Your overhead as a clinician, if you own your clinic and some of,

and this is like ball parking.

If you've been in it for a while, your overhead on your lease, on your building

space should run 20 to 30% of your gross.

That's everything that you learn.

That's a lot.

And when you're just.

I promise you, like mine was like, Oh my God, when I first start, it's like 70%.

Like you're not making anything, you're just trying to cover your overhead.

So when you guys go out and you interview, don't think you're gonna get 70%,

industry standard for a new practitioner.

This also, Maryanne told me was about 30 to 40% of your, of what

that employer is gonna collect.

30 to 40% because their, let me put it this way.

Their overhead looks like this.

They have, you have your lease space billing companies take 10%.

So now you've got your lease space at 30.

Billing company takes 10%, There's 40 already gone.

Then you're not even talking about overhead for reception, overhead for

supplies, for insurance, for keeping the lights on for new equipment,

for, I mean, it's rough guys.

So 30, 40, 30 to 40% is pretty standard.

Not to mention the fact this too.

Those new, those practitioners who hire you as a practitioner, if you get

one who's willing to teach you things, they're also, you're using their energy

and you, they're less likely to be able to see as many patients as they

want because they're trying to bring you up to speed and help you out too.

So keep those things in mind when you're trying to negotiate your.

. 40% is a really good pay, guys.

40% is really good.

So 40%, $40 per patient visit is pretty good.

Pretty damn good.

And if you can get that, Take it.

. Really, I mean just, especially if you can talk 'em into like, great, cool, like

let me work my way up to seeing two to three patients an hour, then you're, then

you're making real money and you don't have the stress of owning a business.

So if that's something that you're interested in, that's

kind of what that looks like.

. And also that's not how everybody hires.

Some people will hire and give you a base salary and then try and make

you perhaps give you bonuses or whatever per patients that you see.

There are lots of different ways to do it.

There's not just one way.

But the ways that I've been interviewing, so I, I recently had a couple interviews

and some really great, great offers.

People were willing to pay me a percentage, and I'm happy to do

that because I am happy to grow.

I am happy to get my ass out there and do the marketing and fill the

practice and get busy and make money and create relationships and networks.

And like, I don't have a problem doing that.

I'm very comfortable doing that.

So that's also another reason why somebody would pay me a little

bit more because I know how to do those things and have no problem.

So I'm really comfortable.

It's not that I don't have a problem with it.

I'm very comfortable doing that.

And, and the employers are, More likely to put you on a percentage

because they know that you're hungry and you will work for it, right?

That you will learn how to retain your patients and you will learn

how to create treatment plans and you will create success.

So, Anyway.

I hope that helps.

I know that a couple of you have asked me in the past about how to negotiate

your pay whether or not to lease space or get a job or what to do.

It's, it's, it's your decision.

It has recently been my decision to step away from trying to create

my own clinic and just enjoy.

Going into a place where I can go in and go to work and not have to focus on

that so that I can focus on the podcast.

So if you have any questions, you guys know where to find me.

Thanks a lot for listening.