More Dental Workers Likely to Be Considered Employees Not Independent Contractors Under Proposed Department of Labor Rule
Jordan Uditsky • November 21, 2022
Like owners of other businesses, dental practice owners often hire staff members as independent contractors rather than as employees. They do so to keep expenses down, minimize tax obligations, and reduce time spent worrying about personnel and payroll matters such as overtime pay, sick leave, insurance, and other employment law issues. Ultimately, however, whether an associate dentist, hygienist, or other team member is appropriately classified as an employee or contractor isn’t up to the practice owner. It is up to the law and the rules promulgated by the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS). And under a proposed rule recently issued by the DOL, more dental workers are likely to be considered employees instead of contractors, no matter what label a practice owner uses for them.
Published on October 13, 2022, the proposed rule would revise the DOL’s analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA). Specifically, the DOL is proposing to rescind a rule promulgated under the previous administration which identified five “economic reality factors” to be used in determining whether a worker was an employee or independent contractor. Under the prior rule, which is still controlling until the new proposed rule becomes final, two of the five factors— “the nature and degree of control over the work and the worker's opportunity for profit or lost” were designated as “core factors” that were to carry more weight in the analysis.
That rule was generally seen as more employer-friendly in that it made it easier to classify a worker as a contractor. Under the new proposed rule, the “core factors” mentioned above would no longer be part of the analysis. Instead, the new rule uses a “totality-of-the-circumstances” approach and an “economic reality test” that looks at the economic reality of the worker’s activities and the nature of the working relationship with the employer.
The new proposed rule sets forth six factors to be used in determining whether the “economic realities of the working relationship” reveal a worker to be economically dependent on the employer – in which case they would be likely considered an employee – or whether the worker is in business for themselves such that they are an independent contractor:
- “Opportunity for profit or loss depending on managerial skill”
- “Investments by the worker and the employer”
- “Degree of permanence of the work relationship”
- “Nature and degree of control,” including “whether the employer uses technological means of supervision (such as by means of a device or electronically), reserves the right to supervise or discipline workers, or places demands on workers’ time that do not allow them to work for others or work when they choose”
- The “extent to which the work performed is an integral part of the employer’s business”; and
- The “skill and initiative” of the worker, meaning whether a worker uses specialized skills brought to the job or is “dependent on training from the employer to perform the work.”
Illinois Law Makes It Even More Likely That a Worker Will Be Considered an Employee
Making matters even more complicated for Illinois dental practice owners, state law establishes its own criteria for determining a worker’s status and presumes that a worker is an employee unless and until it's proven in any proceeding that:
- Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and
- Such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
- Such individual is engaged in an independently established trade, occupation, profession, or business.
It remains to be seen whether the final rule ultimately promulgated by the DOL will be the same or substantially similar to the proposed rule. Regardless, practice owners need to understand that just calling someone an independent contractor does not make them one. Given how much employee misclassification hurts workers who inappropriately wind up treated as contractors (and how much tax revenue is lost when businesses wrongfully classify workers), it’s no surprise that the federal government and individual states are cracking down on the practice. When they do so, they crack down hard. The financial cost to the practice can be substantial, but it can also cost owners personally, as they can be held liable individually for any intentional misclassification.
To avoid such consequences, dental practice owners should discuss any questions or concerns with an experienced employment and dental practice attorney.
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Most relationships, whether personal or professional, start with a certain level of mutual trust and respect, compatibility, and shared goals and priorities. But those characteristics don’t always last, and a once-promising partnership can devolve into disputes, distrust, or outright hostility. The dentist-patient relationship is not immune to such deterioration. There may come a day when the differences between a dentist and their patient make continued treatment undesirable or impractical. A patient, of course, is free to call it quits with their dentist at any time, or the patient and dentist can mutually agree to part ways. But when a dentist wants to stop treating a problematic or disruptive patient and terminate the relationship, things can be a bit stickier. 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Best Practices For Terminating a Patient Relationship As noted, adequate notice, providing the patient an opportunity to find alternative care, and facilitating continuity of ongoing care are the keys to responsibly ending the dentist-patient relationship and avoiding a claim of abandonment. We suggest that dentists take the following steps to minimize the likelihood of any disputes or claims arising from the termination of the relationship: provide written notice to the patient, preferably by certified mail; provide the patient with the reasons for terminating the relationship; offer to continue treatment and access to services for a reasonable period (such as 30 days) to allow the patient to secure another dentist’s services; state that you will provide emergency services for a designated period; help the patient locate another dentist; and offer to transfer the patient’s records to a new dentist and/or advise the patient of their right to obtain a copy of their records for a fee. 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We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
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Most relationships, whether personal or professional, start with a certain level of mutual trust and respect, compatibility, and shared goals and priorities. But those characteristics don’t always last, and a once-promising partnership can devolve into disputes, distrust, or outright hostility. The dentist-patient relationship is not immune to such deterioration. There may come a day when the differences between a dentist and their patient make continued treatment undesirable or impractical. A patient, of course, is free to call it quits with their dentist at any time, or the patient and dentist can mutually agree to part ways. But when a dentist wants to stop treating a problematic or disruptive patient and terminate the relationship, things can be a bit stickier. It is crucial that a dentist handles the break-up carefully and in accordance with the law and ethical standards so as to avoid claims of patient abandonment that could threaten their professional license or expose them to liability. Are you interested in speaking with one of our attorneys? Click here to contact us now. Dentists Have a Right To Unilaterally Dismiss a Patient For Reasonable Cause As a preliminary matter, dentists may choose to responsibly end their relationship with a patient for any reasonable, legally permissible cause. As the American Dental Association (ADA) guidelines put it: The dentist has the right to dismiss a patient in situations where it is impossible to resolve differences or if the dentist cannot abide the patient’s behavior within the practice, as long as the dismissal is not for a legally impermissible discriminatory reason. Accordingly, a dentist may not end a patient relationship because of the patient’s race, religion, gender, color, age, national origin, disability, or other characteristics protected by federal and state anti-discrimination laws. Notably, political opinions are not a protected characteristic under the law. Common reasons a dentist may justifiably terminate a patient include: Hostility or abusive behavior toward the dentist, staff, or other patients Harassment or sexual abuse of dentist, staff, or other patients Repeatedly missing appointments Refusal to undergo recommended testing or treatment Lack of trust or confidence in the dentist’s abilities or recommendations Consistent failure to follow office policies Showing up to appointments under the influence of alcohol or drugs Refusing to adhere to infection-control precautions and policies, such as masking Nonpayment Patient Dismissal vs. Patient Abandonment A dentist who chooses to dismiss a patient can’t simply show them the door, send them a break-up text, or refuse to answer their calls. Dentists must end the relationship such that they avoid any claim that they have abandoned their patient. According to the ADA’s Principles of Ethics and Code of Professional Conduct Section 2.F.: Once a dentist has undertaken a course of treatment, the dentist should not discontinue that treatment without giving the patient adequate notice and the opportunity to obtain the services of another dentist. Care should be taken that the patient’s oral health is not jeopardized in the process. Patient abandonment is a serious ethical violation. For example, the Illinois Dental Practice Act lists “abandonment of a patient” as one of the many reasons the Illinois Department of Financial and Professional Regulation may revoke, suspend, refuse to issue or renew, reprimand, or take other disciplinary or non-disciplinary action against a dentist. A dentist also exposes themself to a malpractice claim if injuries result from their termination of the patient at the wrong time during the course of treatment or without proper notice. 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Additionally, a dentist experiencing issues with a patient should contemporaneously document all communications, incidents, statements, or behavior suggesting a breakdown in the relationship. Of course, while a dentist can control how they handle the end of a patient relationship, they can’t control how the patient will react to being “dumped.” Even when the dentist acts professionally and cordially, as they should, there is no guarantee that the patient will do the same. If a patient responds with hostility or anger, tread carefully and do not respond in kind. Contact Us With Any Questions or Concerns If you have any questions or concerns about ending a patient relationship, please give us a call. At Grogan, Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
