We’ll get straight to the point: According to the law, dental hygienists and assistants working under a dentist's supervision must be classified as W-2 employees.
Now, that may catch you by surprise—because it’s extremely common for dental hygienists and assistants to be misclassified as 1099 contractors. According to recent data, between 10-30% of workers in the United States are misclassified as 1099 contractors. This isn’t just a matter of erroneous paperwork; if you’re misclassified, you could be on the hook for your own workers’ compensation, malpractice insurance, health benefits—and even your employers’ tax burden. Dental practices that misclassify their workers, on the other hand, can face serious legal risks, location closures, debilitating fines, and criminal penalties.
Let’s talk a bit more about employee misclassification—and address how you can take steps to address this, if you feel you’ve been misclassified.
How does misclassification happen in the first place?
Employee misclassification (when a worker is classified wrongly as either an independent 1099 contractor or a W-2 employee), even if it occurs accidentally, can bring about serious consequences for businesses and deprive workers of essential labor protections. Misclassification can happen for a few different reasons:
- Dental practices may urgently need staff, and misclassify workers as 1099 contractors to bring them in quickly, avoid paperwork, and avoid cancellations.
- Dental practices may not have resources to support human resources and compliance, leading to accidental misclassification.
- Dental practices may unwittingly rely on dental staffing platforms that misclassify their users as 1099 contractors.
What are the key differences between a 1099 contractor and a W-2 employee?
1099 ContractorW-2 Employee
- They may be referred to as "self-employed" or as an "independent contractor,” and they are often hired as a temporary worker.
- They are responsible for paying both their employer’s and their own tax burden.
- They may not have access to benefits and protections such as paid time off, workers' compensation, malpractice insurance, etc.
- They may be known as simply an “employee,” and can be a temporary or full-time worker.
- Their taxes are withheld through the employer’s payroll, and a W-2 tax form is provided by the end of the year. Their employer pays their share of their tax burden.
- They may receive legal protections such as minimum wage and overtime, plus access to benefits such as PTO, workers' comp, and malpractice insurance
Why exactly are dental hygienists W-2 employees? (And are there any exceptions?)
Most dental hygienists meet all three factors of the IRS test that determines classification. In order to classify a worker as a 1099 contractor, the dental practice must prove that these three factors have not been met.
- Behavioral: The company controls or has the right to control what the worker does and how the worker does their job. In this case, the dental hygienists works under a dentists’ supervision.
- Financial: The financial elements of the worker's job (how the worker is paid, if an how expenses are reimbursed, and supply ownership and management) are controlled by the company.
- Relationship: There are formal written contracts and/or employee-type benefits offered, including pension plans, insurance, and vacation pay. The laborer’s relationship with the company is ongoing, and the laborer’s work is a key aspect of the business.
Note: A few states may be exceptions to the rule, as they allow properly licensed dental hygienists to operate independently (not under a dentists’ supervision) and set up their own dental practices.
What are the risks of misclassifying W-2 employees as 1099 contractors?
Dental PracticesDental Hygienists & Assistants
- Dental practices could be sued and forced to pay all back-taxes, back-wages, and penalties for misclassification.
- Practice locations may be shut down temporarily or permanently.
- Practice owners could face prison time for intentional misconduct.
- Misclassified workers must pay their employer's tax burden, which may result in lower take-home pay.
- They forfeit access to the employer-provided benefits such as unemployment, healthcare, and PTO.
- They may be held liable if a patient sues the dental practice.
"Under applicable IRS and department of labor regulations, it is improper to classify most hygienists who work at dental practices as 1099 contractors, even when they are only working part time or as a temp. The regulations are very clear and there can be significant consequences for misclassification of employees as independent contractors. Employers across the country have been investigated and fined for violating these regulations. In my experience many practice owners across the industry are needlessly exposing themselves and their staff to significant legal risk by misclassifying employees as independent contractors."
—Brian A. Colao
Director, DSO Industry Group at Dykema
What can I do if I’m a dental worker who’s been misclassified?
Good news: After review, up to 95% of workers who claimed misclassification were properly re-classified. If you suspect you’ve been misclassified, you can learn more about your next steps through this clip from a recent webinar.
