Veterinarian Contract Red Flags | Veterinary Employment Contract

What are veterinarian employment contract red flags? Say you’re just out of training or even switching jobs. You have a new employment agreement. What are some things you need to consider? What could make a contract not such a great opportunity? 

Check the Compensation Package

First, compensation is usually the number one thing in most people’s minds. Many veterinarians will use the ProSal method. It involves a percentage of the net-collections the practice receives based upon your personally produced services. Or usually a hybrid of base plus a percentage of the net-collections. But negative balances in that situation can be moved forward. 

Let’s dive into that quickly. First, if you’re a veterinarian associate moving into practice, you must think if it’s not just a straight-based salary. Many times it is. In that scenario, you get paid a base amount, a hundred thousand a year, you work your normal hours. That’s that. If it’s a collections-based method, your volume and how much you do per day will directly affect how much you’ll make annually. Especially lately, with vet staffing at difficult levels for nearly anyone in the industry. Vet techs and front office staff are difficult to find at this point.

Plenty of vets are struggling with volumes because they’re having to do vet tech things. In addition to seeing all the normal patients. Monetarily, looking at whether the practice staffs appropriately, allowing you to be as efficient and productive as possible. Ask those hard questions. Have you had any problems with staffing lately? If yes, what are you doing to correct those problems? What’s the average volume for the current veterinarians in practice? Those are important. Even ask hard numbers. What’s the average net collection for a veterinarian in my specialty in this practice? That way, you can gauge what your ultimate compensation will be. 

Red Flags To Look Out For In Your New Practice

If you’re looking at an employer and they’re unwilling even to give you moderate data as far as that’s concerned. It’s a huge red flag. Because normally it means that they’re so disorganized, they don’t know what the numbers are. Or they’re so bad, they don’t want the vet to know about them. The first red flag is ensuring they have proper staffing which will make you more efficient. And ultimately lead to more money for you. 

Include This In Veterinary Contract Negotiations 

The second huge red flag is if there’s no without-cause termination in the agreement. In almost any provider agreement across any industry, physicians, dentists, veterinarians, or whoever, there needs to be without-cause termination. That means either party can terminate the agreement at any time with a certain amount of notice to the other. If there is no without-cause termination, say a vet has a three-year contract, there’s no way to terminate contracts early.

I find contracts that cannot terminate the agreement without-cause usually mean the employer has had a very difficult time staffing. And wants to lock in vets under any circumstances. If they have high turnover, they have trouble holding onto vets, it usually means they’re kind of, bad business people. Or maybe treat the vets inappropriately or not with the professionalism they deserve. So, you need without-cause termination in the associate veterinarians’ contracts. Usually, it would be somewhere between 30 to 90 days. If it’s 180 days a whole year’s notice, you can’t accept that. It needs to be shorter just for that situation. And especially if you’re being paid purely on production. You have no way of getting out of the agreement and your compensation is just completely nose-dived. You are stuck. Unless you find some way that they’ve breached the contract, you need the ability to get out.

Terms of the Restrictive Covenants

The last major red flag would be restrictive covenants. The non-solicit and non-compete more importantly. The non-competition clause is enforceable in most states. There are few where it’s not, but mostly, non-competes are enforceable. That says the vet can’t act in their specialty for a period within a certain geographic radius. Normally, a non-compete would be one to two years. Somewhere around there, one would be more favorable. Lastly, the geographic restriction varies wildly amongst locations and a rural environment.

It might knock the vet completely out of the town. Whereas if you’re in a big metropolitan area, it could be five miles up to 20. You want to ensure those are as tight as possible. That means you want it only from one or your primary location for the smallest radius possible. That way, you don’t have to necessarily move. If you get a non-compete, it’s five years long and knocks you out of the five contiguous counties you’re in. That’s not a reasonable non-compete and you shouldn’t sign that. Some people may move for a job and have no intention of staying there if the contract ends. For them, the non-compete doesn’t matter at all. But if you have ties to an area, you have family in there, your kids are going to school. There’s like 0% chance you can move if the contract ends.

You need to ensure that you have a reasonable non-compete. So it doesn’t completely affect your lifestyle for a year or two or however long. Those are three major red flags. Doesn’t have cause termination; staffed appropriately so that your compensation isn’t affected. Is the non-compete fair? There are several other red flags too, but I’ll focus on those three in this blog.

Other Blogs of Interest

• Should a Veterinarian be a W2 or 1099?
• Should a Veterinarian be Reimbursed for Moving Expenses?
• Pros and Cons of Employment at a Corporate Veterinary Office
• What Veterinarian Business Expenses Should an Employer Pay For?

Veterinary Professional Contract Benefits

Veterinarians are in high demand. People want to do everything within their power to care for pets so near and dear to their hearts. And the skills that a veterinarian brings to the table are highly prized. The supply of veterinarians is somewhat lacking compared to the overall demand in the market at this time. This meant employers had to look at ways to sweeten the deal to get as many vets as possible.

Why Employers Require a Contract for Veterinarians

Many jobs in any business or industry require a potential employee to sign an employment contract. One that lays out the foundation and terms of employment. And the benefits of coming to work at a specific facility. Often, they do this as means of encouraging people to accept a particular job offer they might not have otherwise. When benefits are laid on the table, it’s easier for people to see why they should work for a specific employer. One they consider working for. 

Employers will always ask veterinarians to sign a contract of employment before they can begin their work. After all, the business veterinarians do is often so delicate and sensitive that no aspect of it can be compromised. The employer needs to know what they are getting for their business when they offer employment to a veterinarian. On the plus side for incoming vets. They can see the benefits they’ll receive all laid out in a way that makes it clear what to expect. 

Benefits of Veterinarian Contracts

Employment agreements benefits include the fact that it can provide some much-needed stability to the veterinarian. Many veterinary contracts are designed to run for 12 months or longer. Thus, veterinarians can feel confident that they will be employed at a specific facility for at least a year. That is, if they don’t do anything egregious, that will nullify the contract. We’d also explore some additional upsides to veterinarian contracts to clarify why these documents are so important to many.

Professional Liability Insurance

No matter how talented someone is at their job, there is always a risk that something terrible could go wrong. Veterinary Practice News explains why vets are strongly encouraged to purchase protection that’ll keep them and their veterinary practice safe: 

As claims become more common and damages rise, defending against malpractice claims becomes more expensive and necessary for veterinary practices. Like many professionals, veterinarians commonly purchase professional liability (malpractice) insurance to guard against the expense of defending against such claims. If an employer can add professional liability insurance as a benefit to the contract, this is all upside for the veterinarian. It is a total relief. It means they may not have to pay for this insurance out of their pocket. Unless they want supplemental coverage beyond what the employer provides. 

Clients are often very particular about how their pets are taken care of. They may feel that they have a claim against you if something goes wrong with their pet’s care. And in the business of medicine, events related to malpractice can have a long damaging effect on the vet’s career. That’s why all vets considering a new employment offer should speak with a veterinary contract lawyer. In order to review the paperwork the employer asked them to sign. And to ensure it includes extensive liability insurance protections. 

Retirement Accounts

Everyone must think about their financial future as they are still actively working. Preparing for the fact that you won’t be able to work as you do now someday is a wise practice. Simply because it is the reality of the situation. It would help if you prepared for the day when you are past the age of working. And need to rely on the savings you have accumulated throughout your working life. A 401(k) plan for veterinarians should be automatic in any agreements they sign. This is to say what any veterinarian thinking about signing up for a job with a given employer should recognize. The employer needs to offer a 401(k) plan for the vet to consider it.

PTO and Sick Days

Veterinarians considering new work may want to give special consideration to personal time off (PTO) and sick days allotted. The reason? Because they must have the opportunity to establish some work/life balance in their existence. 

A burnout crisis is sweeping through the practice at this time as the number of clients continues to grow. Many vets must work far more hours under far more challenging conditions than they usually would. Given all this, it’s abundantly clear that vets need to catch some breaks. And be allowed to recover from the onslaught that is their job. When looking over contracts, veterinarians should see how their time off breaks down into different categories, such as:

• Sick days
• Vacation days
• Personal time off (PTO)
• Flex time
• Holidays

Employers have different definitions for how they look at time provided to their employees to take care of their needs. Before signing employment or independent contractor agreements, it is crucial to understand what those definitions are. 

Discounted or Free Services

It would be unusual for a veterinarian not to have a pet (or two, or three!) of their own. Thus, it is a reasonable assumption that the vet may receive special discounts or even free services from their employer. They may not want to work on their pet for understandable reasons. But they may have the opportunity to receive veterinary care from a co-worker who can help them out. Their employer should discount this service as part of the terms of their employment. This may seem like a small thing. But it makes a big difference in the lives of busy veterinarians with multiple pets that need taking care of. Getting a little break on those services can be the cherry on top. 

Reach Out Today

Before you sign on to any professional veterinary offer, we would like to have the opportunity to discuss it with you. We intend to help you understand every element of your contract (including an analysis of your non-compete agreement). And if said contract makes sense for your needs. Please get in touch with us. Let us know how we can start the process of helping you receive the assistance that you require.