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Chelle Law
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      • Dental Independent Contractor Agreements
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        • Is a W2 or 1099 Better for a Dental Associate?
        • What Is a 1099 Dentist?
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        • Claims Made Insurance for a Nurse Practitioner Explained
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      • Nurse Practitioner Non Compete Clauses
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        • Nurse Practitioner Non-Competes (ENFORCEABLE?)
        • Is a 2 Year Non Compete for a Nurse Practitioner Reasonable? | NP Non Compete
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        • Nurse Practitioner Non Compete vs Non Solicit
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          • ECFMG Certification Requirements | Certification Requirement
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      • Non-Compete Agreements
        • Is 10 Miles a Reasonable Restriction in a Physician Non-Compete?
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        • How Many Locations Should a Physician Non-Compete Apply to?
        • Is a Non-Compete Enforceable Against a Physician? | Physician Non-Compete
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        • Can a Physician Be an Independent Contractor?
        • Physician Independent Contractor vs Employee
        • Is a W2 or 1099 Better for a Physician? | Physicians Contract
        • What is a 1099 Physician?
        • What Percentage of Physicians are Self-Employed?
    • Physician Assistant Contract Attorney
      • Physician Assistant Employment Contracts
        • Can a Physician Assistant Break Their Contract?
        • How To Negotiate a PA Contract (Better Salary TIPS)
        • Red Flags in a Physician Assistant Employment Contract?
        • How Are PAs Compensated? (2 BEST Ways To Get PAID)
        • What Should Go Into a Physician Assistant Termination Letter?
      • Physician Assistant Malpractice Insurance
        • How Much Does Tail Insurance Cost for a Physician Assistant? | Malpractice Insurance
        • Physician Assistant Malpractice Insurance (Do You NEED Claims Made?)
        • Tail Insurance for a Physician Assistant Explained
        • What is Claims Made Insurance for a Physician Assistant?
        • Occurrence Based Insurance for a PA (Malpractice Basics)
      • Physician Assistant Non Compete Clauses
        • How Many Locations Should a Physician Assistant Non Compete Apply To?
        • Is 10 Miles a Reasonable Non Compete for a Physician Assistant?
        • Is a 2 Year Non Compete for a Physician Assistant Reasonable?
        • Is a Non Compete Enforceable Against a Physician Assistant?
        • Physician Assistant Non Compete vs Non Solicit | Compete vs Solicitation
      • Physician Assistant Contract Benefits
        • Physician Assistant Sign-On Bonus (Will You Have to Give it BACK?)
        • How Much Paid Time Off Should a Physician Assistant Get?
        • Should a Physician Assistant be Reimbursed for Moving Expenses?
        • What Benefits Should Go In a Physician Assistant Offer Letter?
        • What Physician Assistant Expenses Should an Employer Pay For?
      • Physician Assistant Independent Contractor Agreements
        • Can a Physician Assistant be Self Employed?
        • Is a W2 or 1099 Better for a Physician Assistant?
        • Physician Assistant Independent Contractor Tax Deductions
        • Physician Assistant Independent Contractor vs Employee
        • What is a 1099 Physician Assistant?
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        • Veterinary Malpractice Insurance (Do Vets NEED Tail Coverage?)
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        • How Many Locations Should a Veterinary Non Compete Apply To?
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        • How Much PTO Should a Veterinary Associate Get?
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Physician Assistant Independent Contractor vs Employee | PA Employment

What is the difference between being an independent contractor and an employee as a physician assistant?  As a PA, those who are maybe in the more surgical specialties assisting with surgeons, you certainly can have opportunities where it’s a kind of a part-time basis and it’s up to you when you want to assist. And in that scenario, it probably would make sense to be an independent contractor. As an independent contractor, you’ll receive a 1099 at the end of the year, and no taxes will be withheld from your compensation throughout the year. Now, the downside of being an independent contractor is you’re not going to get any of the benefits that you would receive as an employee who received a W2.

Normally, as an employee, you’re going to get health, vision, dental, disability, life, and retirement, they’ll pay for your continuing education, your license, and DEA registration, you get paid time off, and they’ll pay for your malpractice insurance. The employer in a normal relationship is going to pay for all those things. Whereas as an independent contractor, you will be responsible to pay for all of that and secure it as well. Now, if you are a smart PA, you will create an LLC. If you’re interested in being an independent contractor, you’ll get a tax ID number from the federal government, an EIN, and then you’ll also create a bank account for that company. And then you’ll run all compensation and expenses through that account. That way, you can create tax deductions for all of those expenses that I just said, you can deduct the insurance and the license and the DEA and all of the travel, cell phone, all of the things that are necessary to work as a PA, you can deduct if you have the LLC and you’re working as an independent contractor. Now, there will be scenarios, most likely where you’ll approach an employer for a job.

And it’s a full-time job, it’s a normal nine to five, and they may say, look, we want to classify you as an independent contractor and pay you as such. Well, the IRS offers a 20-factor test that kind of determines or gives guidelines on, alright, is somebody an independent contractor or an employee? I find that most of the time if an employer is hiring a PA full-time and wants them to be an independent contractor, they’re just doing that to get out of paying employment taxes. If you’re concerned that you’re being misclassified, I would look at that factor test and then approach the employer with your concerns that say, look, you’re treating me as an independent contractor, but you’re requiring me to do all of the things that a normal employee would do. Other topics of interest include:

  • Physician Assistant Independent Contractor Tax Deductions
  • Can a Physician Assistant be Self Employed?

Plus, you’re not giving me any benefits. If you think about it, employment taxes can cost somewhere between 10 to 12%, and benefits can be somewhere between 8 to 12%, so they could be saving 20% on classifying you as an independent contractor. Now, the IRS can come in after the fact and say, well, you’ve been misclassifying this person. And then there can be some back taxes that are owed but it’s better to speak up in advance of signing anything if you’re concerned that you may be misclassified. Some people, even if there are tax advantages to being an independent contractor and even if they have a bunch of different part-time jobs, don’t want the hassle of going out and finding all of the malpractice and health vision, dental, disability, life, setting up retirement.

Some people simply have no interest in doing that. And so, if that’s the case, you need to look for jobs or you’ll be an employee and not an independent contractor. An independent contractor agreement should be kind of easy in, easy out, meaning the notice required to terminate the agreement should be shorter. You should avoid any kind of restrictive covenants. No non-compete, non-solicit, those types of things. They should theoretically be absent from an independent contractor agreement. Whereas you’re going to see all of those things in an employment contract, usually, somewhere between 60 to 90 days without cause notice. There’s always going to be a non-compete unless you’re in a state where it’s completely invalid. There are pros and cons of being an employee and an independent contractor. And it just kind of depends upon the situation that you’re in, whether it makes the most sense.

Tax Deductions for a PA Under an Independent Contractor Agreement

What is the difference between being an independent contractor and an employee as a physician assistant?  As a PA, those who are maybe in the more surgical specialties assisting with surgeons, you certainly can have opportunities where it’s a kind of a part-time basis and it’s up to you when you want to assist. And in that scenario, it probably would make sense to be an independent contractor. As an independent contractor, you’ll receive a 1099 at the end of the year, and no taxes will be withheld from your compensation throughout the year. Now, the downside of being an independent contractor is you’re not going to get any of the benefits that you would receive as an employee who received a W2.

Normally, as an employee, you’re going to get health, vision, dental, disability, life, and retirement, they’ll pay for your continuing education, your license, and DEA registration, you get paid time off, and they’ll pay for your malpractice insurance. The employer in a normal relationship is going to pay for all those things. Whereas as an independent contractor, you will be responsible to pay for all of that and secure it as well. Now, if you are a smart PA, you will create an LLC. If you’re interested in being an independent contractor, you’ll get a tax ID number from the federal government, an EIN, and then you’ll also create a bank account for that company. And then you’ll run all compensation and expenses through that account. That way, you can create tax deductions for all of those expenses that I just said, you can deduct the insurance and the license and the DEA and all of the travel, cell phone, all of the things that are necessary to work as a PA, you can deduct if you have the LLC and you’re working as an independent contractor. Now, there will be scenarios, most likely where you’ll approach an employer for a job.

And it’s a full-time job, it’s a normal nine to five, and they may say, look, we want to classify you as an independent contractor and pay you as such. Well, the IRS offers a 20-factor test that kind of determines or gives guidelines on, alright, is somebody an independent contractor or an employee? I find that most of the time if an employer is hiring a PA full-time and wants them to be an independent contractor, they’re just doing that to get out of paying employment taxes. If you’re concerned that you’re being misclassified, I would look at that factor test and then approach the employer with your concerns that say, look, you’re treating me as an independent contractor, but you’re requiring me to do all of the things that a normal employee would do.

Employee Share of Taxes to the Practice

Plus, you’re not giving me any benefits. If you think about it, employment taxes can cost somewhere between 10 to 12%, and benefits can be somewhere between 8 to 12%, so they could be saving 20% on classifying you as an independent contractor. Now, the IRS can come in after the fact and say, well, you’ve been misclassifying this person. And then there can be some back taxes that are owed but it’s better to speak up in advance of signing anything if you’re concerned that you may be misclassified. Some people, even if there are tax advantages to being an independent contractor and even if they have a bunch of different part-time jobs, don’t want the hassle of going out and finding all of the malpractice and health vision, dental, disability, life, setting up retirement.

Some people simply have no interest in doing that. And so, if that’s the case, you need to look for jobs or you’ll be an employee and not an independent contractor. An independent contractor agreement should be kind of easy in, easy out, meaning the notice required to terminate the agreement should be shorter. You should avoid any kind of restrictive covenants. No non-compete, non-solicit, those types of things. They should theoretically be absent from an independent contractor agreement. Whereas you’re going to see all of those things in an employment contract, usually, somewhere between 60 to 90 days without cause notice. There’s always going to be a non-compete unless you’re in a state where it’s completely invalid. There are pros and cons of being an employee and an independent contractor. And it just kind of depends upon the situation that you’re in, whether it makes the most sense.

W2 v 1099

Is a W2 or 1099 is better for a physician assistant?  If you’re working as an employee for a private practice or a hospital, you’re going to be classified as a W2 employee, meaning, you’ll receive a W2 at the end of the year, and then taxes will be withheld from whatever your regularly paid compensation is. If you’re working as an independent contractor, you’re going to receive a 1099 at the end of the year, and no taxes are going to be withheld from any compensation you receive from whatever organization that you’re working for. The main difference between the two of them is in 10 99, no taxes are withheld. W2 taxes are. Additionally, if you’re working as an employee, you’re going to receive all the good benefits that a normal employee would.

Most likely health, vision, dental, retirement, life, disability, they’re going to pay for your board license, DEA registration, and continuing education, you’re going to get paid time off. All of that, in a normal employment relationship, would be covered by the employer. If you’re working as a 1099, you’re going to be responsible for all of that including malpractice insurance. Now, if you want to maximize your tax deductions, then what you should do is create an LLC, get an EIN, get a bank account in the state that you’re working in, and then put all compensation and expenses, have it flow through that bank account. That way, you can track whatever your expenses and revenues are. And then use that as tax deductions at the end of the year as business expenses.

I would suggest if you’re going to work as an independent contractor, you should talk to an accountant in advance of starting or signing the agreement and then set up all those things properly, so you can maximize your tax deductions. If you do set up an LLC, you don’t have to do it for every single job that you take as an independent contractor. It’s good to go from when you start until however long you want to work as an independent contractor. For multiple different organizations, what they would do is in the independent contractor agreement, it’ll state who the parties are, just use the contract they’re contracting with your LLC and not you personally.

And that way, the relationship is set up correctly. Now, as I said before, the situation really dictates which one is better. There are times when an employer will ask you to work as an independent contractor, but they’re really treating you as an employee completely. The reason why most of them would do that is just to save on paying employment taxes, which is usually around 10 to 12% of your total compensation. The IRS lists kind of like a 20-factor test to determine whether someone is an independent contractor versus an employee. I would suggest if you’re concerned that you’re being misclassified, that you look at that test, and then if it’s clear you’re actually an employee, but they’re just classifying using an independent contractor, so they don’t have to pay employment taxes or give you any benefits, bring that to the attention of the employer and say, look, I believe you’re misclassifying me.

Employees vs 1099s

I’m not comfortable signing this. I mean, what could happen is if the IRS determines that you were misclassified, they could come back to the employer for employment taxes. Sometimes employers will even put language in there stating that the independent contractor would be responsible if the IRS comes back and says they’re misclassified for those back taxes and penalties. Absolutely do not sign something that says that. So, that’s kind of the different scenarios where it might make sense to be a W2 versus a 1099. It just depends upon the situation. I mean, most people, if they’re just working sporadically, maybe once or twice a month for a surgeon or something they’re assisting in like if you’re orthopedics or something like that, that makes sense to be an independent contractor. If you’re working every single day from nine to five, you are not an independent contractor. It’s very, very unlikely that a scenario like that would dictate you to be classified as an independent contractor. So, you just need to be careful.

Red Flags in a Physician Assistant Medical Contract

What are some red flags in physician assistant contracts? Sometimes the red flags are the words on the page, but other times red flags are missing. I’m going to kind of go over the most common red flags that I see. The first one would probably be unreasonable non-compete clauses. Depending on your state, most states’ non-compete clauses for healthcare providers are enforceable, but you do want to check your state law. If they are enforceable, you want to check is it reasonable? What I mean by that is, normally, a non-compete clause will be anywhere from one to two years. I always try to advocate for at least one year only, not over a year.

One year, it should be, or less. It could be six months, that would be great. And then you want to look at the restricted area. Typically, it goes by miles and it kind of depends. You must take into consideration where you’re located and what your makeup looks like. Like, are you in a rural area? Are you in a city? And then you want to see, okay, is this mileage unreasonable? Really anything over 30 miles is going to be, in my opinion, unreasonable. And I would try to negotiate that down. So, we’ve talked about how long they’re for, and then how much is included in that restricted area from competing with your employer. The other thing you want to look for is how many locations does that restricted radius apply to? This is a little tricky and a lot of times employers try to slip this in there.

They may say or have language in there that states any location of the practice with the company, or they’ll say any location you provide services at. That means if you fill in for a provider that’s on vacation, you’re a non-compete clause now attached to that location. Let’s just say you have 10 miles from your primary location, but now you could have 10 miles attached to multiple other locations. This is dangerous especially if let’s say the company expands while you work for them. And it could knock out a huge chunk of the state. You may have to move if you decide to end your employment. So, overly restrictive non-compete is a red flag. The other thing you want to look for in a non-compete itself is what services are you restricted from?

Consultation with Chelle Law

When your Physician Assistant agreement is reviewed by a contract review attorney, you will find financial benefits which end up outweighing the cost of the review. Leave it to the experts. If you are in need of assistance with an employment agreement or contract review schedule a Physician Assistant Contract Lawyer with Chelle Law today!

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Based on 174 reviews
Destinee Hamlet
Destinee Hamlet
2023-01-31
Everyone was very helpful and professional. Felicia answered all my questions and made the process super easy and stress free.
Gabriela Martinez
Gabriela Martinez
2023-01-29
Definitely recommend! I’m a nurse practitioner and was able to renegotiate my contract with the help of Chelle Law. The outcomes were above expectations.
Linda Price
Linda Price
2023-01-27
I placed my trust in Chelle Law to handle my issue with the State Board of Nursing and they did not disappoint. Service was professional and courteous. I could not have asked for a better outcome. I highly recommend this firm!
Anni R
Anni R
2023-01-25
I had a great experience with Chelle Law. I’m so glad I found them and hired their services. Their communication was on point 👌 they’re very professional, always kept me updated, always returned my calls and emails in a timely manner. They’re compassionate and understanding of every situation. I would 100% use them again and refer them to anyone.
Chin Kim
Chin Kim
2023-01-24
Great hep overall. Fast response and even it was an hour review, the attorney stayed on the phone longer to answer all my questions.
Amelia
Amelia
2023-01-20
Booking the consultation was easy and I got all my questions answered! Excellent customer service.
Steven Yang
Steven Yang
2023-01-18
I am a veterinarian about 3 years+ out from school changing jobs for the first time since graduating . The idea of needing to closely review a contract was foreign to me and I honestly had no idea what I would be signing . Luckily I found Chelle law and worked with Erin who put all my worries at ease . She took the time and even went over our scheduled time slot to review / translate every section of my contract and make valuable suggestions that I could bring up to my future employer. Throughout our discussion it was clear to me that Chelle law is very familiar with the intricacies of a veterinary contract and what it typically should entail. I was very pleased with my experience .
Tiffany Efantis
Tiffany Efantis
2023-01-11
I used Chelle law for a non-compete clause review. I was referred to them by a friend. They were helpful, quick, and affordable for what I needed. I will definitely use them again for any employment contract review in the future!
Nicholas Peracchio
Nicholas Peracchio
2022-12-13
Erin was so thorough with my contract I felt extremely confident in my negotiations and ended up getting everything I wanted and more! I can’t recommend her enough. She took her time and made sure I understood everything I was signing and did so with a kind and caring demeanor. Thanks so much Erin!!
Seth Bricel
Seth Bricel
2022-12-13
I needed a lawyer to review my partnership contract and Chelle Law provided a great experience at a fair price. My lawyer thoroughly explained the meaning of the contract in terms I could understand and provided valuable perspective as to which parts were normal and which parts were atypical or in need of modification. Thanks to their help, I've reached a contract that I and my partners are very happy with!

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