Independent Contractor Agreements: What Every Healthcare Professional Needs to Know
An independent contractor agreement is a vital part of the modern workplace. For many professionals, including in the healthcare industry, working as an independent contractor can offer several benefits, such as having control over your work schedule and enjoying the ability to collaborate with multiple companies.

While such a contract may seem attractive to most people, it is important to dive deep into what this independent contractor agreement entails and how it differs from a traditional employment contract. This way, you’ll get to know what to expect and how to handle yourself during the contract duration. In this blog post, we will discuss:
- What is an independent contractor agreement
- Is a physician an independent contractor
- Employment contract agreement vs independent contractor agreement
- What to look out for when signing an independent contractor agreement
What Is an Independent Contractor Agreement?
An independent contractor agreement is a legal document between the hiring company and an independent contractor. This agreement outlines the terms of the working relationship, including the services to be provided, the compensation for those services, and any other relevant details.
Independent Contractor Agreement
It is important to note that independent contractors are not employees of the company they are contracting with. Instead, they are self-employed individuals who provide services to that company. This can breed in confusion, especially if you’ve never worked as an independent contractor before. You may have questions about what’s fair and reasonable and how to work with what’s provided and what’s not provided in the contract. If this is your case, you should consider consulting an experienced employment contract lawyer to help you review the contract as well as guide you on all you need to know before signing the agreement.
Is a Physician an Independent Contractor?
A physician can be an independent contractor or an employee depending on the contract they signed when starting their job.
The vast majority of physicians are employees meaning they signed an employment contract. For some specialties, however, such as dermatology and anesthesiology, they are more independent contractors.
Employment Contract Agreement vs Independent Contractor Agreement
There are three major differences between an employment agreement and an independent contractor agreement, as discussed below.
Work Status
When you sign an employment contract agreement, you become an employee of the hiring company, while if you sign an independent contractor agreement, you’re considered a self-employed individual or a freelancer.
Taxes
If you sign an employment contract, you are required to complete the w-2 tax forms. This means that taxes will be deducted directly from your salary. While if you sign an independent contractor agreement, you’ll be paid full compensation. However, you’ll be required to complete the 1099 tax forms so that you pay off your taxes on your own at the end of the year.
Benefits
An employment contract offers benefits such as life insurance, health insurance, disability insurance, paid time off, retirement plans, and Continuing Medical Education (CME) reimbursement. In contrast, an independent contractor agreement doesn’t offer any company benefits. However, you may be eligible for a higher salary and higher compensation factor for relative value units (RVU).
What to Look Out for When Signing an Independent Contractor Agreement
Contract agreements can seem complex and hard to comprehend due to the terminologies and conditions used. However, it is essential to fully understand the contract before you sign it so as to know what to expect. It also helps cut off any misunderstandings. Here are some key things to look out for:

The Length of the Contract
How long is the term length? Is it for one project or an ongoing relationship? What are the start and end dates? Does the contract renew automatically, or do you need to renew it manually? It is important to clearly understand how long you’ll be working with the company involved. This way, you can plan ahead and avoid any surprises down the road, such as job security issues.
The Scope of Work
What exactly are you being contracted to do? Is there any time limit to delivering? The contract needs to be as specific as possible here. The clearer the scope of work, the less likely there will be any misunderstandings later on, especially when it comes to compensation.
Payment Terms
How and when will you be paid? This is probably one of the most important aspects of the contract from your perspective. You’ll want to ensure that you’re getting paid on time and that all the terms and compensation models are clearly laid out.
Cancellation Policy
What happens if either party wants to cancel the contract? Are there any penalties involved? What grounds are needed to cancel the contract, how much notice should be given, and in what format? This is something you’ll want to know upfront in case you need to cancel the contract for any reason. You should also be aware of any repercussions that may arise from canceling the contract.
Non-Compete Agreements
A non-compete agreement or clause restricts an independent contractor from working with a competitor of the hiring entity during the duration of work and for a specific period after the contract ends and within a particular geographical area.
Independent Contractor Relationship
Remember, as an independent contractor, you’re free to work for multiple entities simultaneously, meaning you must therefore be very careful not to breach your contract by working with a competitor of your hiring company. If you breach this agreement, you may face consequences such as being sued by the hiring entity.
Contractor: About to Sign an Independent Contractor Agreement?
Before signing an independent contractor agreement, it is important to understand what you’re agreeing to. This way, you can know what to expect and be sure the contract is fair to you as it is to the hiring company. The first step to do this is reviewing the contract and negotiating where needed.To make this even much easier for you, you should consider consulting an experienced healthcare attorney who can review and advise accordingly. Attorney Robert Chelle is a professional contract attorney who has helped many healthcare workers review their independent contractor agreements. He can help you too. Feel free to reach out today.