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Independent contractor advice

Posted
by Quedeezy Quedeezy (New) New

Hello,

I have the opportunity to work as an independent contractor and have questions. I currently make $72/hr and work at a hospital that provides all benefits (medical, dental, 401K, etc). For the IC position, the offer is $70 per hour on weekdays and $100 per hour on weekends, and will see 25 patients per day. Shifts will be about 8 hr days. I'm asking for opinions and advice in how I would go about negotiating and if this rate seems fair? It's for a specialty Infectious Diseases and I will be seeing patients in the hospital setting.

Pls give input on questions I should ask and what would be fair. I know I need to put aside costs for taxes, benefits etc... or should I negotiate this into my contract and get paid per encounter?? Please help! The contract is due in a few days

RiskManager

Specializes in Healthcare risk management and liability.

From my perspective as a risk manager, make sure that you have your own malpractice policy that provides primary coverage for your work as an independent contractor. Since you won't be an employee of anyone, you will not be covered by the employer's insurance.

From my perspective as a risk manager, make sure that you have your own malpractice policy that provides primary coverage for your work as an independent contractor. Since you won't be an employee of anyone, you will not be covered by the employer's insurance.

thanks for the insight. The dr will be providing malpractice insurance for me...

Jules A, MSN

Specializes in Family Nurse Practitioner.

thanks for the insight. The dr will be providing malpractice insurance for me...

I believe you should always have your own policy anyway.

As for the 1099 since you will be paying the entire amount of FICA/self employment tax and no benefits I would require a significant rate increase as compared to a W2 job with benefits, PTO, CEUs etc. Figure out how much all of that translates into on a yearly then hourly basis and add that to your hourly rate if you are willing to make a lateral move, which thankfully I've never been in a position to have to do.

RiskManager

Specializes in Healthcare risk management and liability.

thanks for the insight. The dr will be providing malpractice insurance for me...

I would double-check on that: is the physician paying for a separate policy for you, or are you going to be covered as his employee? If you are being covered as an employee, I would think that would have implications as to if you are a true independent contractor or not.

I would double-check on that: is the physician paying for a separate policy for you, or are you going to be covered as his employee? If you are being covered as an employee, I would think that would have implications as to if you are a true independent contractor or not.

Of course. These are specifics that I will have to ask. The contract is between him and I, so I would think he's technically employing me. I am assuming that he's going to add me to his policy.

I've done some searching regarding this and there are instances where it's not a "true" independent contractor. I would have to talk to my accountant I'm sure...

I believe you should always have your own policy anyway.

As for the 1099 since you will be paying the entire amount of FICA/self employment tax and no benefits I would require a significant rate increase as compared to a W2 job with benefits, PTO, CEUs etc. Figure out how much all of that translates into on a yearly then hourly basis and add that to your hourly rate if you are willing to make a lateral move, which thankfully I've never been in a position to have to do.

This post was because I needed assistance in doing the calculations. That's what I figured, was that I would need at least 20% raise on what I was making prior. It comes out to about $86/hr that I would need to make. At the same time, I would be able to make deductions and there's pros and cons with being an "independent contractor". I wanted to work for myself, and this is new to me. I appreciate the advice, I just need more direction in what I should ask for and expect. I know a lot of times, employers aren't necessarily "fair" when it comes to these types of positions. I would like to prepare myself as much as possible.

Jules A, MSN

Specializes in Family Nurse Practitioner.

This post was because I needed assistance in doing the calculations. That's what I figured, was that I would need at least 20% raise on what I was making prior. It comes out to about $86/hr that I would need to make. At the same time, I would be able to make deductions and there's pros and cons with being an "independent contractor". I wanted to work for myself, and this is new to me. I appreciate the advice, I just need more direction in what I should ask for and expect. I know a lot of times, employers aren't necessarily "fair" when it comes to these types of positions. I would like to prepare myself as much as possible.

It sounds like you know the nuts and bolts. What I can add as you have already acknowledged in another post is that most times you don't "work for myself" in my experience its almost exactly the same as an employee and barely grazing the IRS requirements which I'm not opposed to just be aware that you aren't all the sudden a fancy entrepreneur. Excellent that you have an accountant they will be most valuable to guide you. The write-offs are a nice perk but my opinion not anything the employer is contributing to so I don't ever consider it as part of my package or the bottom line. Tax deductions are a pain to manage and a little perk, nothing more, imo.

I'd also suggest not considering negotiations in any regard a matter of employers being "fair" or not it is simply business. If someone is willing to work for crap or as in most cases I'm aware of doesn't even realize the implications of 1099 it is 100% on them. An employer can offer me $10 an hour and if I accept thats on me. I have had to lay it out for them, email works excellent so they can crunch the numbers in private, so they are aware of the financial implications and also to put them on alert that you know what you are doing from a business standpoint. If you reframe your overview it should make the whole process more palatable. I don't ever get emotional about negotiations. I present with what I will need to make the deal happen and if they are willing to provide it I will work for them. If not, I offer many thanks for their consideration and move on to the next one. Good luck.

Riburn3, BSN, MSN, APRN, NP

Specializes in Internal Medicine. Has 14 years experience.

At that volume I would negotiate a percentage of the gross receipts and not an hourly rate. 25 patients a day for a specialty practice in a hospital is going to reimburse an obscene amount of money. It also will free you up to work at your own pace (faster or slower) without the pressure of trying to make sure you are getting enough hours in each day. I'm sure your first day rounding will be long, but for ID in the hospital where you likely see the same patients over and over, follow ups can take a few minutes, including charting if you use e-charting and not dictation.

As it stands your current offer is terrible and a huge pay cut when you factor in how much all your current hospital benefits are worth. Figure out which hospital billing codes they commonly use, how much they reimburse, and multiply it by 25. You'll be shocked how much you are going to pull in versus what they pay you.

xenogenetic

Specializes in Psychiatric and Substance Abuse Nursing.

Some tax write offs phase out once you make a certain amount of $. Certain real estate write offs totally phase out once you hit $155k, for example. Be sure to you take a circumspect look at your total tax picture, or at least ask your accountant to on your behalf, and then plan accordingly.

It sounds like you know the nuts and bolts. What I can add as you have already acknowledged in another post is that most times you don't "work for myself" in my experience its almost exactly the same as an employee and barely grazing the IRS requirements which I'm not opposed to just be aware that you aren't all the sudden a fancy entrepreneur. Excellent that you have an accountant they will be most valuable to guide you. The write-offs are a nice perk but my opinion not anything the employer is contributing to so I don't ever consider it as part of my package or the bottom line. Tax deductions are a pain to manage and a little perk, nothing more, imo.

I'd also suggest not considering negotiations in any regard a matter of employers being "fair" or not it is simply business. If someone is willing to work for crap or as in most cases I'm aware of doesn't even realize the implications of 1099 it is 100% on them. An employer can offer me $10 an hour and if I accept thats on me. I have had to lay it out for them, email works excellent so they can crunch the numbers in private, so they are aware of the financial implications and also to put them on alert that you know what you are doing from a business standpoint. If you reframe your overview it should make the whole process more palatable. I don't ever get emotional about negotiations. I present with what I will need to make the deal happen and if they are willing to provide it I will work for them. If not, I offer many thanks for their consideration and move on to the next one. Good luck.

Duly noted. Thanks for the input. It is much appreciated! Everything you said makes complete sense. I wanted to clarify, I don't see it as being a "fancy entrepreneur" but rather literally working for myself because I have my own patients and don't have to deal with all the headaches that come with working for an organization and being an employee...

although I'm sure there's different issues and problems etc

At that volume I would negotiate a percentage of the gross receipts and not an hourly rate. 25 patients a day for a specialty practice in a hospital is going to reimburse an obscene amount of money. It also will free you up to work at your own pace (faster or slower) without the pressure of trying to make sure you are getting enough hours in each day. I'm sure your first day rounding will be long, but for ID in the hospital where you likely see the same patients over and over, follow ups can take a few minutes, including charting if you use e-charting and not dictation.

As it stands your current offer is terrible and a huge pay cut when you factor in how much all your current hospital benefits are worth. Figure out which hospital billing codes they commonly use, how much they reimburse, and multiply it by 25. You'll be shocked how much you are going to pull in versus what they pay you.

Very helpful input! It's nice to know where the offer stands, because of course they make it "seem" favorable. What do you suggest about negotiating for gross receipts? How would I word this? 25 patients seem like a lot, but then again it seems the norm for hospitalists... there's going to be a training period, and I'm aware that it will take some time for me to get acclimated and efficient in seeing this volume of patients. He did mention he will compensate me for additional patients. He would also give me an amount $25 per patient (which seems low to me of course) vs $70/hr, whichever one I prefer. Also mentioned that malpractice would be provided under my name in separate policy and would give me health insurance allowance of $250 per month

I have done a general search and believe me, I know they make a ton of money! I'm in the wrong line of work LOL