Employment & Independent
Whether a veterinarian or non-veterinarian is deemed to be an "employee" or an "independent contractor" is critical when it comes to such important issues such as unemployment tax liability, pension eligibility, workers' compensation, fair employment practices, wage and hour law and many other related matters.
Independent Contractor Status For Relief Veterinarians
Why Use An Employment Agreement?
An employment contract is a written and binding agreement entered into by an employer and a prospective or current employee. One of the few notable exceptions to the employment-at-will standard, the goal of an employment contract is to clearly set forth those terms and conditions governing the inception, continuation and termination of the employment relationship. The primary benefit of an employment contract is that it solidifies the expectations associated with the employment relationship while legally binding both parties to its terms. Perhaps most importantly, another excellent reason to use an employment contract is that it is a highly effective means for protecting a company's financial and intellectual resources.
Whether a relief or temporary veterinarian is classified as an employee or independent contractor has been a hotly contested issue during the past few years. The independent contractor status is judged on a case-by-case basis and is an area of law where "substance over form" prevails. The IRS uses 20 well recognized, common law factors which are applicable when reviewing an independent contractor relationship. The single most important criteria is the so-called "right to control" test utilized in determining independent contractor status. If the relief veterinarian has the right to decide how he or she will diagnose, treat, perform surgery and prescribe for the patient according to his or her independent professional judgment, then it may be inferred that it is the relief veterinarian, not the hiring veterinary practice owner, who has the right to control. In such case, the relief veterinarian typically will be classified as an independent contractor. If, on the other hand, the contractual arrangement cannot meet the requirements of the right to control test, an independent contractor relationship will not have been established.
It goes without saying that due to the high degree of scrutiny being given to independent contractor relationships by various government agencies, such arrangements carry with them a certain inherent risk and must be carefully evaluated before entering into an independent contractor agreement.