Are you independent? Read your contract to make sure

Contract Language. By Steven M. Harris, AMNews contributor. Sept. 2, 2002.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Prior to signing a contract with a hospital or physician group practice, you should determine whether you are considered an employee or an independent contractor by the employer.

The title of the document which you sign is not dispositive on the issue. So even if the document you sign says "Independent Contractor Agreement," that conclusion is not binding on third parties looking to reclassify the relationship as employer-employee.

Your employment status will impact all aspects of your contractual relationship, including licensing issues, liability insurance and coverage, and supervision liabilities. This column will explore various pitfalls of independent contractor status and highlight key areas to consider prior to signing your contract.

The Internal Revenue Service and the courts consider specific tax law factors to determine whether a physician is an employee or an independent contractor. The IRS has established a list of 20 factors -- not specific to physicians -- used to determine whether sufficient control exists to establish an employer-employee relationship. While no single fact is conclusive evidence, the IRS balances its 20 factors and comes to a subjective conclusion as to the status of the physician. The IRS factors include:

• Whether the employer requires the worker to follow instructions.
• Whether the employer trains the worker.
• Whether the worker's services are provided personally.
• The length of the worker's relationship with the employer.
• Whether there are set hours for work.