Independent Contractors vs. Employees
Federal and state
law is very clear
on when you may classify workers as independent contractors instead of employees. Note the "Services Provided as Key Activity of the Business" clause:
If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities. For example, if a
law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. This would indicate an employer-employee
Thus, any dental facility hiring a dental hygienist, a dental assistant, or an administrative worker must treat that person as an employee from day one.
This means complying with all laws and regulations that apply to an employer/employee relationship including all payroll taxes and withholdings.
There is no "Under $600 Exemption" as that only applies to valid independent contractors.
When you use RDH Temps, Inc., all temps are employees of RDH Temps.
As their employer, we handle their payroll and their payroll taxes.
We comply with all employment laws and regulations including the Massachusetts Universal Health Care Law.
Paying Temps Directly
If you pay a temp directly, either as an "Independent Contractor" or "Under the Table", you are in violation of employment law.
Beware of agencies who ask you to pay temps directly or through a third party provider as independent contractors. If the Department of Labor or Internal Revenue Service
finds employee misclassification it will be your office, not the agency, who will be held liable.
If the Internal Revenue Service does not get the appropriate taxes from the temp, they will come to you:
Consequences of Treating an Employee as an Independent Contractor
If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker
Misclassified Workers Can File Social Security Tax Form
Workers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.
In addition, civil and criminal penalties may apply.
Penalties up to $25,000 and one year imprisonment for a first offence, and $50,000 and up to two years imprisonment for a second offence can be imposed.
Treating a Temp as an Employee
Many facilities are aware that under the law they may not pay temps as independent contractors.
When a "referral agency" provides a temp, the facility will treat the temp as an employee for the duration of the assignment.
While this is legal (assuming all laws and regulations are adhered to), it is certainly inefficient and can expose the facility to risks.
Initial documentation requirements: Treating a temp as an employee means the facility must have the temp fill out an I-9 form and provide the appropriate documentation that the
person is eligible to work in the United States (such as a driver's license AND a social security card.) Additionally, they must have the temp fill out a W4 form so the temp can be added to their
payroll with the correct withholdings. Clearly, this is a large burden to the facility, especially for short assignments.
Employer tax burden: Beyond the initial paperwork required to "hire" a temp, the facility is required to withhold the temp's federal and state income tax (and locality taxes in some states) along with federal and state unemployment.
The facility must also pay the employer portion of these taxes.
Employment regulations: When a temp is treated as an employee, they must be considered in all circumstances where federal or state regulations apply to employees.
In Massachusetts, the Universal Healthcare Law requires facilities to report total hours worked by all employees and offer health insurance to any employee who meets certain criteria.
Other states currently have or are considering mandatory sick leave laws.
Workers' compensation: Another problem with treating a temp as an employee is the risk incurred.
Facilities may be required to report temps who are treated as employees to their workers' compensation provider, potentially raising the premium.
Should there be a work related injury at or involving your facility (such as the repetitive strain injuries common among dental hygienists), the temp could submit a workers' compensation claim, again potentially leading to increased premiums.
Unemployment insurance: When a temporary assignment ends, the temp employee is entitled to file an unemployment claim.
As that person's employer, some portion of the unemployment income will come from the facility's unemployment account.
An employer's unemployment insurance rate per employee is set based on unemployment claim activity.
Professional Liability (Malpractice) Insurance
When you hire a temp, be sure that your professional liability insurance policy extends to temps working in your office.
Most policies do not cover non-employees.
When you use RDH Temps, Inc., dental hygienists and dental assistants are covered by our professional liability insurance.
This coverage is rare among temporary agencies due to the considerable expense, but we know our clients place tremendous value in knowing they are not exposed to the risk of a non-covered malpractice claim.
Regulatory Compliance and Documentation
Every facility has different requirements from various regulatory bodies.
We will not place a temp who has an expired or out-of-state license.
RDH Temps has sophisticated technology which allows us to track facility documentation requirements and ensure any temps placed meet these requirements.
Examples are immunization certificates, radiology certification, criminal background checks, OSHA certification and HIPAA training certification.
Selecting an Agency
A good agency will be a partner and will be responsive and flexible.
Selecting an agency on the basis of price alone can turn out to be costly and frustrating.
Here are some things to ask:
Does the agency charge a cancellation fee?
RDH Temps understands that offices have unforeseen circumstances or schedule changes at the last minute.
We never charge a cancellation fee.
If you cancel after the temp arrives, we only bill for the reporting minimum in accordance with state laws: CT: 1 hour, MA: $36, NH: 2 hours, RI: 3 hours.
Does the agency have a minimum number of hours?
Although it can be difficult to find a temp willing to go to very short assignments, we do not have a minimum number of hours.
How likely is the agency to fill the assignment?
When an agency has a small pool of temps, it can be hard for them to fill assignments quickly.
We have a large database of temps along with a sophisticated system to quickly find the best matches; in fact over 1,100 temps received a paycheck from RDH Temps last year.
We filled 73% of jobs called in on the day of the assignment and 92% of jobs where we had one or more days' notice.
How responsive will the agency be?
Is the agency you are working with a small, home-based business where you get voicemail most of the time?
At RDH Temps, our call center is staffed from 7 AM to 9:00 PM Monday to Thursday, and from 7 AM to 5:30 Friday.
We have call-back coverage Friday night and all weekend.
During normal business hours your call will be answered live 96% of the time.
If you are put on hold, hold times are generally under one minute.
How can I be sure the agency is reputable?
Each year new agencies are started and each year agencies close their doors.
RDH Temps, Inc. has been the market leader since its incorporation in 1980.
Over 1,000 dental facilities did business with RDH Temps last year.
We are the premier dental staffing agency in New England.
If you have never used us, try us and find out why!