Saturday, August 4, 2012
Physician Independent Contractor Agreements
Today's topic is Physician Independent Contractor Agreements. An independent contractor agreement is a legal agreement between a Physician or otherwise known as a "Doctor" with a medical practice or hospital. When we represent Physicians or a Medical Group, there are key terms that we want to keep in the independent contractor agreement or watch out for to protect our client. Generally, an independent contractor agreement is an written agreement where a medical practice does not want to assume the payroll taxes of a physician. Thus, control is the ultimate issue that the Internal Revenue Service evaluates to determine whether the agreement is truly an independent relationship or an employer or medical provider's way of avoiding the responsibility of paying payroll, fica, and social security taxes. Robertson Law Group, LLC generally handles physician independent contractor agreements or employment agreements in downtown Chicago, North Aurora, and Naperville, Illinois. When we review these legal agreements, these agreements should highlight who is responsible for payment of payroll, fica, and social security taxes. Ultimately, an independent contractor is legally responsible for making annual or quarterly payroll taxes. In our experience, it is easy for an independent contractor to develop problem with IRS, payroll, or income taxes. We have a bi-lingual and tax attorney that concentrates in assisting physicians and doctors with state and federal payroll, employment, and income tax related problems. Generally, an employment agreement will require the employer or the medical practice to be responsible for payment of the employment-related payroll taxes. It is a great idea for a hospital, small medical practice, or a solo medical practioner should strongly consider using a payroll tax service such as ADP, paychex or paycore. In my experience, this is an excellent idea if you live in the Western Suburbs of Chicago or in the downtown Chicago region. An independent contractor contract should highlight whether a non-compete agreement exists and limit the time and geographic scope. In my experience limiting a physician or healthcare specialists geographic restriction greater than twenty (20) miles is too broad for most independent contractor agreements. As a rule, an appropriate time restriction is one (1) or two (2) years with my preference being one (1) year. I prefer a one year covenant not to compete for physicians and dentists in downtown Chicago, North Aurora, or Naperville because most courts will be less concerned that it is too burdensome to a physican, dentists, or doctor. One mistake most independent contractor agreements or physician employment agreements make are making them too broad. Another consideration for employment or independent contractor agreement is the jurisdiction in case of a dispute. Often times, a physician independent contractor agreement or an employment agreement will state the jurisdiction is where the principal place of business exists for a small medical practice, a healthcare institution, or hospital. For example, let us assume that you are a doctor or physician in Aurora, Illinois, in the County of Dupage. Your healthcare provider or physician office will likely have the Circuit Court of Dupage County be the jurisdiction for disputes. Often times, either the loser of the dispute or the independent contractor or employee will be responsible for payment of their employer's legal fees and costs in case of a dispute. In my experience, another consideration that most physician want to consider is whether outside employment or consulting is allowed. Most employers or physician practice groups will allow it, but it will require pre-approval before the employer will grant you, the doctor or physician, the approval to make outside consulting agreements or participate in healthcare fairs or act as a physician in a pro-bono capacity. Another consideration is whether your malpractice insurance for the patients you saw during your stay at the hospital or medical practice group will expire upon your termination of employment or independent contractor agreement. You may want to get notice of any termination of coverage in case of a malpractice or professional lawsuit especially if you are a surgeon, emergency room physician, or a ob-gyn physician. Often times, in my experience, I notice that surgeons, emergency room physicians, and ob-gyn face a greater liklihood of malpractice exposure. Physicians also should consider incorporating as an S corporation or Medical Corporation. This is important because a physician or doctor wants to limit their personal liability exposure in case of a breach of contract dispute. This rule also applies to doctors and chiropractors. In my experience, most physicians or doctors around the western suburbs of Chicago or Dupage County area or Cook County (Chicago) do not incorporate. Instead, most physicians or doctors practice as a physician in their personal name. This means that employees and your employer may sue you in your personal name. Incorporating could limit the suits against you as a physician or doctor. In conclusion, Robertson Law Group, LLC specializes in physician asset protection, wealth preservation law for physicians and medical practice groups, surgeons, ob-gyn doctors, and emergency room physicians. Robertson Law Group, LLC services the counties of Cook County, Dupage County, Will County, Kane County, & Kendall County for physicians, doctors, medical practice groups, and hospitals. Unlike most law firms, our attorneys and team have a significant amount of experience representing physicians and doctors with respect to independent contractor agreements, employment agreements, consulting agreements, non-compete agreements, non-disclosure agreements, and many other physician or dentist related medical or legal agreements. Sean Robertson is Managing Partner of Robertson Law Group, LLC. Sean Robertson resides in Naperville, Illinois and has significant expertise and experience in negotiating, drafting, and revising independent contractor agreements, employment agreements, and the purchase and sale of a business especially a medical practice group, dermatologist group, or other solo medical practioner practice. Sean Robertson may be reached at 312-854-7102 or 630-637-1053. Our website is www.RobertsonLawGroup.com. 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