8 THE ADA PRACTICAL GUIDE TO ASSOCIATESHIPS Associate as Independent Contractor In contrast to an employee, an independent contractor dentist is considered to be a self-employed professional. One view is that an independent contractor can be defined as an independent business person, who contracts to do certain work according to his or her own methods, without being subject to the control of the hiring party, except as to the product or result of the work. If the associate is self-employed, that may mean that the employer only prescribes what shall be done, not how or when it shall be done. Simply performing work to the satisfaction of the employer does not make the contracting dentist an employee. On the financial side, an independent contractor will typically have no employer provided benefits there are no contributions to retirement plans for the associate by the dentist-owner, and unemployment and social security taxes are the responsibility of the associate. The independent contractor is a self-employed dentist working under a contractual arrangement. This arrangement generally compensates the owner for the use of the facilities. Depending on the contractual relationship, an independent contractor would generally exercise rights to independent employment by establishing: • Personal work routines • Hours • Fees • Appointment book control • Complete treatment planning Additionally, the independent contractor might hire chairside employees and provide supplies. Of course, these terms are negotiable between the parties and should be clearly defined at the onset. The independent nature of this relationship carries greater financial and management responsibilities for the associate. As mentioned previously, the independent contractor will likely have no employee benefits from the dentist- owner. Further, he or she will usually be responsible for providing his or her own professional liability and malpractice insurance, and for providing treatment of patients in the event of his or her absence or illness. If the parties decide that an independent contractor classification is appropriate, one issue in particular should not be overlooked: who will retain the patient records on termination of the relationship? If there is no contractual provision spelling this out, the potential for a dispute exists. Other contractual provisions applicable upon termination of the agreement that the parties should discuss include: • Where patient records are to be housed and how long they will be maintained for availability in the event of malpractice litigation • What provisions exist for access to these records • Permission to make duplicates of the patient records • Any provisions for or against solicitation of patients by the associate for future treatment The associate should consider securing the right to a copy of the specific records of patients personally treated in order to have the basis for effective malpractice suit defense. Likewise, if it is agreed that the associate-independent contractor retains the records, the practice owner should consider having the right to retain a copy of the patient records, or at least have access to the records at any time in the future for malpractice suit defense. It is vital that the independent contractor relationship be properly structured to lessen the possibility that the Internal Revenue Service (IRS) or a state revenue agency will challenge the classification of the associate dentist. If the IRS is successful in such a challenge, the dentist-owner can have a substantial liability for unpaid withholding taxes, penalties and interest. In addition, dentist-owners must comply with state laws on employment taxes and employment insurance contributions.