How Does an Associate Dentist Negotiate Salary? | Negotiating Dental Salaries

How can an associate dentist negotiate a better salary? First, as far as compensation models go for most associate dentists, it’s usually one of three things. Either just a straight-based salary, I’d say probably more frequently a daily rate. The last would be a net-collections model. Let’s go through the three of those. Then we’ll talk about tips on how to negotiate. 

First a straight-based salary. The best way to determine whether a wage is an average amount in an area is to talk to colleagues. If an associate is looking in a brand-new city, maybe try to look for job listings online. See what the salary range is that they’re listing.

What’s The Salary in a Normal Associate Contract 

Salaries will vary wildly from location to location. If you’re willing to live in an area that might not be as universally desirable in a rural location. Or maybe somewhere that has brutal weather. You’ll probably make more. Whereas if you’re possibly in a more desirable area with a ton of competition, that usually tends to depress salaries. At least of the associate dentist. Just an idea of the ongoing rate in that specific location is certainly helpful. One of the problems is that most people are just coming out of training or moving to a new location. You’re not bringing any patients, so you’re not as valuable. If you were moving within a city with no non-compete or non-solicit problems and could get a huge chunk of patients to a practice, you’re obviously much more valuable.

But I think in most situations, that’s probably not the case. In that situation, usually, there’d be an ownership interest transfer. The next one is the daily rate. I mean, if you do the math, if this is the salary, how does that breakdown into a daily rate? Then it’s an easy computation. You need to consider if there is a fractional day. This means, maybe you’re only there for half a day, then is the rate just half? I’ve found some contracts where they penalize the dentist for not being there for the full day. And many times it’s not the dentist’s fault, or maybe the volume is not there or something else. 

Negotiating Dental Associate Rates 

So, ensure that the daily rate is not only a fair market but also hourly or half-day. Which states how much the associate dentist gets paid if they are not there for the entire day. Lastly, net-collections, and it’s simple. It’s whatever services the dentist provides that the practice collects on. And then the dentist will get a percentage of that. Let’s take a dental associate who brings into the practice $50,000, and the employer only pays them on net-collections. The standard percentage will be somewhere between 30 to 40% of that amount. They can also do it where they have a base salary on top of net-collections. In that case, once the dentist brings in an amount that covers their salary, they’ll get a percentage above that.

And that is lower, typically, somewhere between 15 to 25%. The percentages certainly can vary wildly as well. And that’s certainly something that the dental associate can negotiate. Negotiation is always about leverage. And as I said before, if you’re just coming out of training, or are in a city you’ve never lived before. If you have no established patient base, you may not have that much leverage. Whereas if you have more experience, you’re in a specialty that’s difficult to recruit, you have this established patient base. You certainly have much more leverage in negotiating a higher daily rate, base salary, net collection, percentage, whatever. The most valuable thing you can do is talk to the people you know. The people you train with or some mentors. And just get a feel for how and how much these people are getting their compensation. 

Other Things To Consider In Reviewing Dental Associate Contracts

I find when we’re negotiating, just taking the compensation is the only stupid factor. You need to consider, are they getting a signing bonus or relocation assistance? Is there a license and some DEA registration they’re paying for? What are the restrictive covenants? The non-compete, the non-solicit. Who’s paying for malpractice insurance? A bunch of factors go into whether a contract is worth signing or not. And you need a holistic, total approach. Not just “I’m going to go wherever I’m getting paid more.” I think that’s shortsighted. Hopefully, that was helpful and gave you some tips on negotiating an associate dental salary.

Other Blogs of Interest

• Is a W2 or 1099 Better for a Dentist?
• How to Get Out of a Dental Associate Contract?

What Should I Look for in a Dental Contract?

There are many things to talk about here. Still, one identifies whether you will be given an employment or an independent contractor agreement. Both contracts are different, and some things should be included in one, not the other. Today, I’m just going to talk about employment agreements because that’s, by far, the most common type of contract between a dental associate and a practice. Within an employment agreement, it will go through all the essential terms of the employment relationship. Things to look for would include the contract’s length, term, and how to terminate an agreement.

Dentist Employment Agreement Red Flag 

And I’m going to spend a little time talking about this. I see this a lot in dental associate contracts. I’m not sure why it’s just in this profession, but every contract you sign needs to have without-cause termination. There will be a clause that states each party can terminate the agreement for any reason, with a certain amount of notice to the other party. If without-cause termination is missing, it’s an enormous red flag! And the reason why it needs to be in there is the employer makes almost every job sound terrific. 

Volume is excellent, with good people, proper staffing, and a good work environment. And then, the associate gets into the actual job, which is not what they were expecting. In that situation, if you had a two-year contract and there was no way of terminating the contract without-cause, you’re stuck there for two years unless they breach the contract.

You Want to Be Able to Get Out of Contracts 

You always want the opportunity to get out of the contract with a certain amount of notice. Usually, the notice period would be between 30 to 90 days in most dental associate contracts. The reason it’s a huge red flag beyond just not having the flexibility of leaving when you want is that if a practice does not include the without-cause termination in the contract. It usually means they’ve had difficulty holding on to dental associates.

Most people would leave without-cause termination, so they’ve removed that option to lock in the dentist. You do not want that to happen. If you see an employment contract without a without-cause termination, do not sign that contract. Other things that are undoubtedly important to be in the dental agreement would be compensation. Are you paid a base salary? Are you paid a daily rate, which is common? Or are you paid just on collections? I would recommend not signing a contract that’s based purely on net-collections. You may be offered a new contract if you haven’t been with that practice previously. 

You understand what the volume at that practice will be. Still, suppose you’re paid purely on net-collections, whatever the course collects from your specific services. In that case, you are at the mercy of the volume and the mercy of the scheduling. And the employer may prioritize moving the clients to them versus the dental associate simply because it’s more profitable for them to see the patients than the dental associate. So, identify what type of compensation it is and ensure it’s fair. Talk to colleagues, go to the association websites, and try to see what’s the average amount and identify that.

Look for the Bonuses and Restrictive Covenants in Your Practice

Are there any signing bonuses or relocation assistance? Do you have to pay it back if you leave early? That should be in the contract. Restrictive covenants are a considerable part of every dental contract as well. The non-solicitation and non-compete agreements are included, which is very important. You need to look at the terms of the non-compete. Any non-compete will state that the dentist can’t work within a geographic radius of the practice for a period. 

Usually, one to two years is standard. And then anywhere between 5 to 20 miles, depending upon the state, is also considered reasonable. What you don’t want there to be, especially all these big dental conglomerates continue to gobble up all the smaller, dentist-owned practices. Many of these non-competes state that you can’t compete within 5 to 10 miles of every location. Even the places where you don’t work. And you don’t want that, because there are five or six office locations in a city. It’s 10 miles around six different areas. It could effectively knock you out of the town.

You want to make sure that the non-compete is fair. And then benefits. Usually, those won’t be listed explicitly in a contract. Sometimes, they are. But they’ll usually be like an associated benefit summary. You should obtain a copy. And then lastly, what are the things they will cover? So, dental, license, DEA registration, professional associations, and continuing education. Those should be listed in contracts, and the employer should pay for those. Let’s briefly explain what you should look for in a rental agreement. There are many other things you can look at as well. Those are usually the most important things to most dentists.