Most new graduate and seasoned physical therapist, occupational therapist, speech therapist and therapist assistants do not know the difference between working as an employee vs. an independent contractor.
Nothing drives me crazier than when I hear of a rehab staffing agency, rehab or home health facility requiring a PT, PTA, OT, COTA, SLP or SLPA to work as a 1099 independent contractor. It bothers me because most physical, occupation or speech therapist and therapist assistants I speak to do not know what it really means to be an independent physical, occupational, speech therapist or therapist assistant independent contractor or know the consequences of not operating properly. A therapist works as an independent contractor out of choice not force. Working out of force can prove to be a costly mistake for the therapist and serviced agency or facility incurring state or government fines, penalties and interest.
The Federal Insurance Contributions Act (FICA) tax rate, which is the combined Social Security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2020 up to the Social Security wage base. The maximum Social Security tax employees and employers will each pay in 2020 is $8,537.40. If a rehab staffing agency, home health company or facility hires you as an independent contractor they do not have to match the FICA tax rate because you are not an employee. Most responsible companies legitimately hire independent contracting physical, occupational, speech therapist and therapy assistants to supplement their staffing needs while others hire because just to save on employee tax expenses and add to their bottom line. That is okay if everyone is on the same page, preferably via a contractual agreement. But it is not okay if a 1099 worker unexpectedly receives a tax bill or unexpectedly gets audited by local or federal agencies. You work as a rehab independent contractor because you know what you are getting yourself in to and understand you are offering your services with no guaranty of getting paid.
Educate yourself and know the difference between an employee vs. physical therapist, occupational therapist, speech therapist or therapist assistant independent contractor before you agree to work as one.
The IRS Common Law Rules utilize three categories to determine the status of a worker:
A. Behavioral: Does the company control or have the right to control how the worker does his or her job?
B. Financial: Does the company provide regular scheduled direct deposits or are they provided on invoice for services rendered. Does the company reimburse for supplies or provide all tools needed to perform a job or does the worker utilize their own?
C. Type of Relationship: Are there written contracts in place? Does the worker have access to benefits like direct deposit, retirement plans, medical or other insurances or vacation and sick pay?
A rehab employee is one who:
1. Desires and chooses to work as an employee and expects to be paid on time and provided benefits that can be compared to other employers in an area.
2. Is provided liability insurance and/or offered other insurances or paid time off benefits.
3. Works within hours of operation
4. Must comply with company employee policies and procedures
A rehab independent contractor is one who:
1. Desires and chooses to work as an independent contracting PT, PTA, OT, COTA, SLP, or SLPA and understands there is no guarantee of being paid on time and the only benefits provided are those by you.
2. Provides own liability insurance and/or other insurances and realizes that paid time off is time you are not getting compensated for.
3. Works when and where you choose.
4. Adheres to your own policies and procedures.
I hope this blog was informative for you. You want to work as an independent physical, occupation, speech therapist or therapist assistant check out The Best Free Agent…IS YOU! by Reyes Nino!