Dentaltown September 2019 - 48

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It's important to note that if you required them to bring in their own instruments that in this
case, it would make no difference whatsoever.
Another factor in the IC test is the permanency of the position. Since they are a temp
employee, you'd think that would help, but again, it does not. Both of those factors carry weight
within a variety of factors in the "test." You can fail just one factor in the 20-point test and be
found to have misclassified.
The main factor is this: Are they doing the work of the practice? Does the practice provide
hygienist services and, is the work they perform a continuation of that work? It is. It's the same
factor test that makes a general dentist associate in a general dental practice an employee and
not an independent contractor.
But the same rule makes the endodontist who visits and treats once per month in a rural
clinic, who also works at several other practices providing services which the practice does not
normally provide, an independent contractor.
I'm an employer just like everyone on this string. I am no more giving out "the sky is falling"
guidance than the hygienist was last week when she showed me the factual-based evidence
that I was lying to her about how many times I was flossing per week. She then helped me to
understand what could happen if I keep lying to myself. She suggested that if I didn't want to
go through what just happened to me again, I come back in a month for a quick check and
cleaning. I set the appointment.
The sky will fall if you are caught doing this. They are the taxman. They are paid through
your taxes. They like getting paid.
Since we painstakingly train our members on an individual basis (this is a large sampling
of your industry), we spend quite a bit of time on the wage and hour part of our employee
handbooks. You'd be surprised to know that way more people than you would think answer
that they have been audited by their state's Department of Labor. I don't keep records of their
answers, so I can't give you an exact number, but the team of four attorneys plus two HR experts
who instruct the members report that at least once per month we get a client who has been or is
being audited. Add to that, we get about one report per month that an office who is a member
has received an audit letter from the DOL.
There are three ways this typically occurs (all avoidable):
1. A disgruntled employee complains about improper payment of wages to an attorney or
the DOL (using online forms to reach the DOL). The complaint prompts an audit, which
includes pay practices. If they find the IC error, they often require you to provide all your
bank records and statements for the past 7 years. Does anyone out there want that to
happen over a few matching dollars of Social Security?
2. A random audit. These happen way more than I would think, but honestly, they are the
smallest sample.
3. Your misclassified employee gets audited because they are itemizing expenses. The IRS
will quickly determine that their itemizations are a result of misclassification. They will
then look to the employers who misclassified them to pay all the back taxes. This includes
all taxes that were not withheld, which will be due from the employer's pocket as you have
already remitted all pay to your employee. Your employee will be offered a deal if they sign
and attest to the conditions of their work relationship with you. So, they get out of pretty
much the bulk of the audit, and you get it dropped square in your lap. ■

8/1/2019

Go online and see more on this discussion and others like it
Check out this conversation on more tax tips and employment classification rules to help keep your practice
squared away. Search for "1099 Hygienist" on dentaltown.com. This thread will be one of the top results. You
can also check out the hundreds of other conversations in the practice management section of the forums.

SEPTEMBER 2019 // dentaltown.com

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Dentaltown September 2019

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