Associate Considerations and Contracts

An individual who provides services to or on behalf of an employer is classified as an employee. An employer is a person engaged in a business that has one or more people serving under oral or written agreements. In addition, employer-employee situations allow the employer the right to control the services of the employee or the manner in which they are performed.

The independent contractor maintains an independent practice within facilities owned by another dentist. The independent contractor reimburses the practice for the use of personnel and equipment, and receives no employer-provided benefits. In addition, the employer must have the right to control the services of the employee, or at least the manner in which they are done.

Part of the interest in employment classification stems from the potential rewards that misclassification offers to the parties. For example, if a dentist is hired as an independent contractor, the employer has no obligation to provide workers’ compensation, unemployment insurance, minimum wages, overtime compensation, or Social Security payments.

The MDS offers these options for those seeking associate opportunities:

MDS Career Center
This online career center enables dentists to post their resumes or search for available opportunities. Other information on interviewing and career direction is also available.

Yankee Dental Congress and District Dental Society Meetings
Attending Yankee and District meetings allows you to meet local dentists in the area and hear of opportunities by word of mouth. View the MDS Events calendar for Yankee and District program dates.

Recruiters/Brokers
These individuals work as agents on behalf of the seller. Many of these individuals exhibit at the Yankee Dental Congress.

New methods of compensation are being developed every day, so it is important to use your best business skills. The following are a few common models described below.

Salaried
Being paid a fixed amount gives you the advantage of planning your personal income accurately and the freedom of not having to address the business side of dentistry. With a salaried position, you are limited as to the income you can receive; however, this type of position generally has defined work hours that may better suit a family life. Disadvantages of a salaried position may include less freedom to operate your own practice, the possibility of being required to see a higher volume of patients, and limited exposure to a variety of procedures.

Production-Based Commission
This is usually the fairest arrangement since you are paid for the income you produce. Be sure to find out who is responsible for the lab charges and other direct expenses.

Collection-Based Commission
By far the most common arrangement, collection-based systems involve the owner compensating the associate a percentage of their monthly collections. Since many offices have a deferred payment arrangement with patients and insurers, you may not know when payment for the service you rendered is actually collected. Associates in these arrangements should ask questions to understand the collections process and past collection history. In addition, be sure to ask if you are responsible for lab fees, other insurance, and professional dues.

The major areas of a contract that need to be covered are as follows:

Parties
The name of the employer and the form of the entity of the employer (corporation, partnership, or sole proprietor) should be identified, and the same for the employee.

Time and Place
When the employee is to be present and where the professional care is to be provided are essential items.

Duties
A specific statement outlining the scope of the employee’s duties and how they are to be performed is necessary.

Term
State the period of employment with the commencement date. State any extension options—for example, if the agreement will automatically renew on the same terms unless one party gives notice to terminate the agreement.

Compensation
Any salary, percentage of production or collections, payment relating to capitation or PPO plans, bonus pay, sick leave, vacations, malpractice insurance, professional memberships, and continuing education should be described.

Benefits
If any are provided, specify the type and amount for medical plans, life insurance, and retirement plan participation.

Employer’s Confidential Information and Trade Secrets
Provisions should be included governing the employer’s right to keep certain types of information confidential, such as potential trade secrets, including patient lists and other proprietary information.

Access to Records
Access after employment termination and in the event of malpractice or other legal action requiring access should be detailed.

Restrictive Covenants
These are enforceable only when reasonable. Legal counsel should be consulted.

Termination
Also included should be provisions for disability, death, end of term, and at-will or for-cause terminations, detailing the grounds for termination and the effect of termination on the continuity of care or any owed compensation.

Dispute Resolution
It is no longer automatic to seek resolution of a dispute relating to an employment agreement in a litigated court action. Instead, consider a provision requiring the parties to use mediation/arbitration for all or some defined disputes.

These are some general and specific terms that may be incorporated into an employment agreement. It is also advised that you seek professional help in writing or evaluating employment contracts.