Starting a new business right out of school is not for everyone. Many practitioners new to the field of acupuncture, and holistic health want to discover who they are as a practitioner and get some real treatment time under their belts before worrying about the nuances of running a small business. Getting a job at a health clinic or acupuncture office is a great way to get more experience, and these positions will come either in the form of being an employee or an independent contractor.
Starting off as a new practitioner, there are a lot of things that need to take place other than passing your board exams, and obtaining a state license—securing a place to practice that you feel inspired and dedicated to is essential. When looking for a job, you will notice that there is not really a standard position or salary, and a wide range of options. But most often you will see the positions being offered either as an independent contractor position, or an employee.
From the superficial level, both instances seem like you are working for someone else but there are important nuances and differences to note before committing to a position. This article dives into the main difference between being an employee or an independent contractor for an acupuncturist. This may even be beneficial to a massage therapist or other type of holistic health practitioner that is accepting a job working at a clinic or health center.
Working as an Employee
Being an employee is definitely the more traditional route of working that most people are familiar with. As an employee, you sign on to work for a company at a set pay rate and time expectation that you can rely on. In return, you abide by the company’s policies, procedures, and job expectations.
The benefits of the traditional employment model are;
-Both parties are protected under federal and state regulations of employee/ employer relationships, and there are many checks and balances in place to make sure no one is being taken advantage of. On top of that, there are often benefits provided by the company such as 401K, paid sick leave, and medical insurance.
-Employees are most commonly paid on a bi-weekly basis, meaning every two weeks. The business you work for will withhold your state and federal tax from your paycheck, and report and pay that for you throughout the year. You end up paying less in state and federal taxes because your employer also pays some of that for you in their employment taxes.
-Also, as an employee, you do not have to pay the “self-employment tax” that independent contractors must pay, and therefore you pay fewer taxes overall. As an employee, at the end of the year, it is possible that you may still owe some money in taxes based on what deductions you claimed vs. your income, and in some happy circumstances, you may actually get a tax return!
-As an employee, if you lose your job due to no fault of your own, you may be eligible for unemployment benefits, so there are a lot of protections in place to set the employee up for success.
-Many businesses may work into their contract something called a non-compete clause which is a legal agreement that states you must not enter into competition with an employer after the employment period is over, and often has a distance range in which you are unable to practice.
If you ever have any questions about employment laws you can check your state’s government webpage and employment laws as they are specific to each state. In Oregon we have the Oregon Employment Department found here.
Some key factors defining employee status in Oregon are:
- You are hired by an existing business and you are compensated for your time either through a salary, or an hourly wage.
- You are subject to such laws as minimum wage, sick time, overtime pay, and rest periods.
- You are protected by workers comp if you are injured on your job, and unemployment benefits if you lose your job due to no fault of your own. Ie: global pandemic.
- You are subject to benefits such as holiday time, 401k, health insurance, and any other fringe benefits that your employer offers.
- You are protected by anti-discrimination laws.
- Generally, you have an agreed-upon schedule and know how many hours you can expect to work.
- Generally, you have a job description and know what duties fall within your job description so you know what to expect.
If you have more questions about your rights as an employee you can check out the Bureau of Labor and industries here.
Working as an Independent Contractor
An independent contractor (IC) is really defined by the word independent, and the position can range vastly from opportunity to opportunity, Basically, as an independent contractor you are your own business, and you are profit sharing with your host business as a form of rent.
The profit split that you negotiate with your host business is between you and that business, there are no regulations around this. Basically, you are two separate businesses that are agreeing on a contract that is [hopefully] mutually beneficial to the two of you.
If you have thought of opening your own practice or clinic one day this option may be the perfect fit as you are working on building your patient base. some benefits of being an Independent Contractor are;
-Some people find these contracts to be advantageous because it allows them to work under an already established and busy brand while having many of the freedoms of working for themselves.
-Being an Independent Contractor may also allow you to have a lower rent overhead For example if you are on a 50/50 split with the host company, and you bring in $0 that month, you both make $0. This creates an incentive for the host company to send patients your way and keeps your operating costs down while you are slowly bringing money in.
There are a few things to take into consideration when thinking about becoming an independent contractor for a business. Some things to consider are:
- As an independent contractor, you are not protected under employment laws.
- You are only paid a percentage of the money you bring in. Unless, you have a setup where you bring in your own money, and pay rent to your host business.
- As an IC you are responsible to claim and file your own taxes including a self-employment tax, so make sure you budget for this. The general rule of thumb is to save 30% of your wages so you have something to pay your end-of-year taxes with. As an independent contractor, if you forget to pay estimated taxes throughout the year, or you don’t put at least 30% of your wages into a savings account for tax purposes, you can end up with a hefty tax bill at the end of the year.
- As an IC you are independent. This means that your host company cannot advise you on how to treat your patients, does not have control over your schedule, and cannot require really anything of you beyond how much money you owe them.
- You are required to maintain all of your own licensing, and insurance, and to register your own business. Technically you are also responsible for all of your own marketing, billing, and payment collections.
- As an IC you are not eligible for fringe benefits.
- You are responsible for all of your own consumables unless these items are clearly outlined in a contract as included in rent. (ie: needles, massage lotion, massage table, sheets, etc).
You can find some basic rules of independent contractor relationships in Oregon at the Oregon Employment Website here.
When considering what type of position might be best for you, take all of these points into consideration and review contracts, get your contracts reviewed by a lawyer. The people who I find to be the most frustrated are the ones that do not clearly understand the difference between these two contracts or are not prepared for a tax bill at the end of the year.
Both positions have pros and cons, so you just have to weigh what feels best for you, and fits your needs. Some people like the reliability and protections of being an employee, and some people like the freedom of running their own business under an independent contractor agreement.
In my opinion, the cleanest and most legal way to do this is to actually collect all of your money on your own, and pay rent to the host business monthly, but unfortunately, most businesses don’t operate this way, and it could potentially set that business up with a major liability.
What major liability you may ask?
Think of misclassification lawsuits, but that is for another article entirely.
Please Note: I am not an attorney. This article is based on my own experiences, advice from my own lawyers, and a basic evaluation of information provided by state agencies such as the labor bureau and industries. This article is for informational purposes, but always seek your own legal counsel when making big decisions. Seek legal counsel ESPECIALLY if you own your own practice and are looking into what type of contracts you want to offer. Most people who get into legal trouble are not doing things out of malice, they literally just don’t know any better. Unfortunately, ignorance won’t protect you from a lawsuit.
- State of Oregon Employment Department. Accessed 11/17/2022.
- Bureau of Labor and Industries. Accessed 11/17/2022.
- Oregon Independent Contractors. Accessed 11/18/2022.
- Equal Employment Opportunity Commission. Accessed 11/18/2022.
- Employee Rights. Department of Labor. Accessed 11/18/2022.
- Independent Contractor Defined. Small Business and Self-Employed. IRS. Accessed 11/17/2022.
This article a written by Dr. Danielle Reghi, DACM, LAc. a licensed acupuncturist in the state of Oregon. She holds a masters from OCOM, and a Doctorate from the Pacific College of Health and Science. She is the owner of Zen Space Wellness, where she also actively practices. You can visit the clinic website to learn more about her at: www.zenspacepdx.com, or you can follow along on IG: @holisticallydriven, @zenspacepdx, @cuppingstudio