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Will a proposed rule on classifying independent contractors affect dentistry?

Jan. 17, 2023
The US Department of Labor (DOL)'s proposed rule on classifying employees and independent contractors stands to affect various industries in different ways. What about dentistry? An expert weighs in.
Rebecca Boartfield and Tim Twigg, Human Resources Experts

The US Department of Labor's proposed rule on classifying employees and independent contractors may have some in dentistry wondering if it will affect their practices. DentistryIQ reached out to Tim Twigg, president of Bent Ericksen & Associates, for clarification. Here's what he had to say on the issue.

While the most recent announcements from the DOL regarding independent contractors (ICs) may seem like a big deal, or represent big changes, they don’t.

A bit of history on the issue:

Prior to January 2021, the principal criteria used by the DOL for determining/qualifying for IC classification were:

  1. The extent to which the work performed is an integral part of the employer’s business. 
  2. Whether the worker’s managerial skills affect his or her opportunity for profit and loss. 
  3. The relative investments in facilities and equipment by the worker and the employer. 
  4. The worker’s skill and initiative. 
  5. The permanency of the worker’s relationship with the employer.
  6. The nature and degree of control by the employer. 

Under this criteria, 95% of all workers in the dental profession did not qualify as ICs (much to the chagrin and disappointment of many dentists/employers). So classifying them as such created risk and liability.

In January 2021, the Trump administration eased some of the criteria, essentially reducing them down to two “core factors”—the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment. Under the 2021 test, other factors—including the skill level required for the work, the degree of permanence of the working relationship between the worker and the potential employer, and whether the work is part of an “integrated unit of production”—would generally only be considered when the two “core factors” didn’t point to the same classification. The rule was set to take effect on March 8, 2021.

Within the first few hours of President Biden’s inauguration on January 20, 2021, the White House issued a “regulatory freeze” on the Trump administration’s proposed IC change.

On October 13, 2022, the DOL issued a proposed new rule on independent contractor classification, which largely mirrors what the agency’s position was prior to the Trump administration’s 2021 rule. The rule would add a new Part 795 to Title 29 of the Code of Federal Regulations, containing the DOL’s “general interpretations for determining whether workers are employees or independent contractors under the FLSA.” The rule seeks to wipe clean any lingering impact of the 2021 rule, making clear that “[t]o the extent that prior administrative rulings, interpretations, practices, or enforcement policies relating to determining who is an employee or independent contractor under the [FLSA] are inconsistent or in conflict with the interpretations stated in this part, they are hereby rescinded.”

Bottom line: the back and forth has led to essentially no change, and again, 95% of all workers in the dental profession did not, do not, and will not qualify as ICs.

About the Author

Rebecca Boartfield and Tim Twigg | Human Resources Experts

Tim Twigg is president and Rebecca Boartfield is a human resources compliance consultant with Bent Ericksen & Associates. For 30 years, the company has been a leading authority in human resource and personnel issues, helping dentists deal successfully with the ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more about its services, call (800) 679-2760 or visit bentericksen.com.