We want to make our dental practice clients aware that dental hygienists—whether full-time or part-time, permanent or temporary, or even if only working for one day—do not qualify as independent contractors under Federal or State law. Dental hygienists are almost always employees and should be paid as employees. We certainly understand that some dental practice employers benefit from treating dental hygienists as independent contractors. But, the simple fact that a dental practice may benefit does not justify an incorrect worker classification of a dental hygienist. Additionally, there are certain repercussions that may result, such as an Internal Revenue Service (“IRS”) audit or Ohio Department of Job and Family Services audit. These audits, if conducted, will likely result in findings that any dental hygienist treated as independent contractor should have been treated as an employee, and will likely result in additional taxes, premiums, penalties, and interest owed.
Why Treat A Dental Hygienist as an Independent Contractor?
A dental practice may want to classify a hygienist as an independent contractor to: (i) avoid the payment of payroll taxes—shifting the tax burden to the dental hygienist; (ii) exclude the hygienist from certain practice benefits that are only available to practice employees; (iii) avoid the potential of other employment related claims, such as workers’ compensation or unemployment compensation, which can ultimately impact the practice’s workers’ compensation or unemployment compensation ratings; or (iv) avoid the potential exposure of certain law suits, such as age discrimination or sex discrimination, including sexual harassment. Although there may be certain benefits for treating workers as independent contractors, we must consider the legal test used by Federal and State courts on this issue.
When examining the factors to determine the worker classification status, there are certain factors that have more weight than others, most importantly including the control factor. The IRS and the courts scrutinize the working relationship to better understand how much and what type of control is placed on the worker by the employer. The IRS and the courts generally find an employer-employee relationship exists when the employer has the right to (i) control and (ii) direct the worker—not only as to the result of the work but as to the manner in which that result is accomplished. It is also important to distinguish between the legal test and the factors determining proper classification. The legal test and inquiry is whether the relevant employer has the right to control the manner in which the work is performed. This is different from the need to control.