Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, contact me (Michael Carabash) or David Mayzel.
Hiring a Dental Hygienist? Read this first!
If you’re a dentist and you’re about to hire a dental hygienist, you need to be aware of the same legal implications that exist when hiring anyone (e.g. associate, office manager, receptionist, dental assistant). The legal implications are based on HOW THE RELATIONSHIP between you and the other person IS CHARACTERIZED. It doesn’t matter whether you have an oral or written agreement that SAYS how that relationship is characterized. The courts don’t simply turn to what the agreement says if there’s a dispute concerning things like:
- Termination (and whether the dental hygienist was given adequate notice or payment in lieu thereof);
- Income Taxes (whether the dentist had to collect and remit these amounts; whether the dental hygienist was entitled to deduct certain “business” expenses);
- Canada Pension Plan Contributions (whether the dentist and the dental hygienist had to remit these amounts to the government); or
- Employment Insurance Premiums (whether the dentist and the dental hygienist had to remit these amounts to the government).
As you can see, there are some pretty serious implications to how the relationship between the dentist and the dental hygienist is characterized at law. Remember: if the parties get it wrong, they could end up paying over a number of years. And, when it comes to incomes taxes, CPP, and EI, you may need to factor in penalties and interest! The costs can add up quickly.
Difference between an Employee and Independent Contractor
So what factors are relevant in determining whether a person is an employee or independent contractor? Courts have traditionally used a four-part test to determine whether someone is an employee or independent contractor:
- Control (a dental hygienist who is supervised and managed by a dentist is more likely to be an employee)
- Ownership of tools of production (a dental hygienist who owns their own tools is more likely to be an independent contractor)
- Chance of profit (a dental hygienist who earns a steady salary is more likely to be an employee)
- Risk of loss (a dental hygienist who stands to lose money because of business costs is more likely to be an independent contractor)
Sometimes, Courts look at how integrated the dental hygienist is with the dentist’s practice (an employee forms more of an integral part of the practice, whereas an independent contractor is in business for themselves and can be replaced).
Overall, while the four-fold test is a good start, the courts have held that it is the TOTALITY OF THE RELATIONSHIP and the intention of the parties (as determined by their agreement and conduct) that will ultimately determine whether the associate is an employee or independent contractor. The distinction is not always clear and the courts have had to wrestle with some seemingly difficult cases involving dentists and hygienists.
The bottom line is that, when it comes to creating dental hygiene contracts, dentists should try to structure the agreement to reflect the TRUE nature of their relationship. For example, a more independent contractor relationship would allow the dental hygienist to set their own work schedule. It would be for a shorter term (e.g. 6 months, 1 year, etc.) instead of being indefinite (remember: independent contractors are typically hired on for a specific project or timeline whereas employees tend to be hired on indefinitely). It would also specify contemplate that the dental hygienist may work for multiple dentists at different locations. The agreement may also contemplate that the dental hygienist is to bring in their own tools and equipment and have to pay for the maintaining / repairing that equipment. Finally, the dental hygienist may be asked to contribute to certain overhead costs – such as utilities (e.g. telephone), staff, marketing, etc.; employees generally aren’t asked to make such contributions.
At the end of the day, if you need a lawyer to review and revise your agreement to have it reflect a truly more independent contractor or employee relationship, you can contact me or David Mayzel.