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Many DC’s graduate and find themselves in a position where they need a short-term position.  For example, I received an email from a new grad who wanted to find a job for 10-12 months.  Here is what I suggested:

I would not include anything about the length of your stay in the cover letter.  There are lots of reasons why your stay might be extended; on the other hand, you may decide to leave earlier.  The length of a job is uncertain anyway, so it is not dishonest to avoid the issue.

You might want to check with the state chiropractic society to see if they have a register of locum (temporary) chiropractors you could get on.  You could also phrase the cover letter to state that you would consider temporary fill-in jobs.

In your cover letter, note that you will be calling the doctor within a few weeks to see if there is any interest.  You might want to prepare letters and then stop into offices with the letter and leave it.  If the doctor is available you could spend a few minutes chatting.  Your willingness to personally request a position might impress a doctor.  Of course, you would be dressed professionally.  Do follow up, pleasantly asking if the doctor received your letter and if any positions are available.  State that you are willing to work on a fill-in basis - spring/summer is a good time to do this to cover for vacations.

I wish you success in your search!

I’ve talked before on this blog about the issue of independent contractor vs. employee, and the problem of calling a worker an “independent contractor.”  I recently found a U.S. Tax Court case the points up an additional concern that might come your way, if you are an independent contractor.  What happens if you are hired as an independent contractor and no one pays the Social Security/Medicare taxes?

Being Hired as an Independent Contractor.  In this case, a worker was hired by a company to do some work over several years.  The company, calling him an “independent contractor,” did not take payroll taxes (Social Security and Medicare) from his checks, nor did they set aside money for the employer portion of these taxes.  Each year, the company gave him a 1099-MISC (reporting income for contractors) instead of a W-2 (reporting income for employees).  He didn’t report this income (somehow figuring the IRS wouldn’t find him), nor did he pay self-employment taxes (the full amount of Social Security and Medicare owed on his income for those years.)

The Tax Court Ruling.  The IRS said he should have been considered an employee, and the Tax Court ruled that he was an employee (you can read more about this case and the Court’s opinion to find out why).  Then the question came up, as it always does:  Who is going to pay the income taxes and self-employment tax?  The worker must pay the income taxes, of course, but he was also required to pay the self-employment taxes for those years.  The employer was not required to pay these taxes.

What Does This Case Mean for You?   You go to work in a chiropractic practice and when you receive your first check, you see there is no withholding for income taxes and no deduction for Social Security and Medicare.  No matter what your contract says, you are being paid as an independent contractor.

Congratulations!  You are now self-employed, in the eyes the IRS, at least.  You should:

1.  Start setting aside money to pay your income taxes, since nothing is being withheld.

2.  Also set aside money to pay the payroll taxes (figure 15.3 percent on your net income from your self-employment as an independent contractor).

3. Start adding up your business expenses so you can lower your income and pay less income tax and payroll tax.  More on this in the next post….

Related posts:

What is an “Associate?” Employee or Independent Contractor?

Associate/Independent Contractor Issues - A Wrap-Up

Remember that old phrase, “Join the Navy, see the World” ?  Well, you can do that in chiropractic, too.  If you have graduated and have your license, but you’re not ready to open a practice, and you don’t want to commit to an associate position, you might want to consider becoming a locum tenens --  someone who goes into an office in a temporary capacity to do chiropractic work.  A locum tenens is, literally, a “place holder” (locum = place, tenens =to hold); it is usually abbreviated as simply “locum” work.

There are lots of reasons why an office would need a “temp”:  maternity leave, medical leave, around-the-world cruise, military duty, and on and on.  If you want to do locum work, check with your state chiropractic association to see if they will put you on their listing.  You might also want to check out the practice-for-sale and associate-wanted articles in Chiropractic Economics and contact doctors who are looking for associates or who need to leave a practice, or try the “Finding a Job in Chiropractic” article on StudentDC.  You might be able to fill in temporarily until a new associate is hired (or maybe you want to stay and fill the position).  Being a “temp” or locum is a great way to learn more about running a chiropractic office and keeping your skills sharp while you’re trying to figure out what to do.

It’s a win-win for everyone — the doctor gets a qualified chiropractor to run the practice, and you get some money and a chance to see the world, and maybe find a great job.

I sat down a week or so ago with a new DC who was looking at an associate contract.  My question to him: “If you had to live on just the base, could you do it?”  Here is what we did:

Monthly Base                          $2500

Income Tax                              $  375

FICA                                           $192

Student Loan payments          $800

Available                                    $1133

So, can you live on $1133 a month?  What if you had a family?  And your spouse couldn’t work?  This doesn’t seem possible, does it?

But, you say, “I’m going to make lots on incentives/bonuses each month.”  But what if:

(a) The doctor made you work for him while he went on vacation and you couldn’t get your own patients in?

(b) The doctor did everything in her power to keep you from getting the incentive, even if you are seeing new patients and bringing in money (this happens more often than you can imagine)

(c) You have to take time off for a family emergency or you are just not able to bring in new patients one month.

Scary thought, isn’t it?  This young doctor was in the Seattle area, where the cost of living is even higher.  Unless his wife works, it doesn’t seem like this is a good deal for him.  What do you think?

The term “pig in a poke” comes from the old days, when someone would buy from someone else, and not see what he or she was getting.  The item being bought was not shown to the buyer before the money was paid.  Would you buy a pig in a poke?

I wouldn’t.  I would want to see what I’m getting before I shell out my hard-earned money.  But too many young chiropractors do just that.  They buy a practice, or they sign up with a practice management company, or they become an associate before getting all the facts.  Due diligence is the process of getting all the facts.  It is a complete 360 degree analysis of a business opportunity, with disclosure of all material (important) facts.

For example, if you were doing due diligence on a practice purchase, you would want to know if there were any outstanding debts that the practice had not paid.  There are lots of other items to check in a practice purchase.  A comprehensive list is included in my e-book Buying a Practice (scroll down the page to find this booklet).

If you’re looking at a practice management company, check them out at the Better Business Bureau or Ripoff.com, or go to the office of the Attorney General in your state and see if the company has complaints against it.

In any case, doing your due diligence can mean the difference between a bad transaction and one that works out well.  Get what you’re paying for - do your due diligence.

As usual, there’s no “rule” about this.  I’ve seen it both ways.  At one extreme, I have seen contracts in which the hiring doctor required the employee (associate) to have X amount of coverage, with Y malpractice carrier before starting work.  That’s pretty restrictive.  It’s also a reduction in the base pay (assuming there is a base pay), so the take-home pay is less. 

On the other end of the scale, I have seen hiring doctors pay the malpractice insurance for the employee.  That’s great, but what happens when you leave?  If it were my (personal opinion here), I’d choose to pay my own malpractice, and with the company I choose, so I can take it with me when I leave.  The insurance is very cheap for the first couple of years anyway. 

What do you think?  Would you rather pay your own and take it with you or have your employer pay? 

One final comment:  Remember that EVERYTHING IS NEGOTIABLE.  If your hiring doctor demands that you get insurance with his/her malpractice carrier, politely say you’d rather get it from your own company and then be prepared to give up something else, if necessary, to get this concession. 

The contract says, “Associate Agreement.”  What does this mean?

I’ve probably talked about this before, but I saw a discussion on a chiropractic discussion board recently about this subject, so I thought I  would talk about it again.

First, understand that “associate” is not a legal employment term.  That is, the IRS and the states do not recognize this term.  They want to know if the person is an (a) employee or (b) independent contractor.  You can call it what you want, but these are the only two terms that have any meaning.

Second, the IRS assumes that someone is an employee unless there is compelling evidence that they are not (i.e., that the relationship is independent contractor).  This means the worker must (1) have income tax withheld from his/her pay and (2) the worker and employer must share in their contributions to FICA/Medicare. 

The IRS has criteria for determing if a worker is an employee or independent contractor, based on three factors: financial control, behavioral control, and nature of the relationship.  Read IRS Tax Topic 762 for more information. 

Now, I’m not telling you not to sign a contract.  I don’t give legal or accounting advice.  I’m just telling you that you need to be aware of what the doctor thinks it is and what that means to you.  If the doctor is considering you an independent contractor, you will have to pay your own FICA/Medicare (”self-employment taxes”) and you won’t have any withholding to use to pay your federal, state, local income tax. 

If you have questions about this, or you have a contract you want me to take a look at, I would be happy to do that.  Remember, no legal or financial advice. 

When I read an associate or independent contractor contract, I pay close attention to words.  I ask myself, “Is the meaning of this term clear?”  For example, I recently saw a contract that used the term “net collections.”  Do you know what “net collections” means?  Net of what?  Net means something is taken out, but what?

Today I saw an associate contract that used the term “earnings.”  I don’t know what “earnings” means, either.  Is it the amount of earnings (profit) of the practice as a whole?  Or is it (more likely) the collections attributable to a specific associate?  It’s much better to clarify assumptions now than to find out later that something didn’t mean what you thought (assumed) it meant. 

Don’t assume you know what a term means.  ASK.  Remember what “ASSUME” stands for - “ASSUME makes an “A**” out of “U” and “ME.” (sorry for ther terminology, but you get my point)

You know I’ve seen a lot of contracts.  But this wins a prize - for unfairness:

1. It’s a 12 month contract.  If the associate (employee) leave, he/she must pay $2500 a month for every month that’s left on the 12 months.  Bad?  Keep reading….

2.  If the employer fires the employee, the employee STILL must pay the $2500 a month for the rest of the contract.  YIKES!  But that’s not all….

3.  The employer can change the amount paid to the employee at any time.  REALLY bad?  Not enough….

4.  The employer also has a non-solicit and a non-compete, so you can’t work anywhere else in the state after you leave.

So, think about this:

Your employer tells you that you’re getting a pay cut.  But you can’t quit because you’ll have to pay off your “breach of contract (see 1 above).  And you can’t work anywhere else because you’ll get sued breaching the non-compete.  See what I mean? 

So…why would you sign such a contract?  

If you are preparing your resume (some chiropractors call it a “CV”), here is a great video on the blog “Interview Chatter” by Darlene McDaniel.  This video gives you tips on creating a resume and cover letter and how to use them to get a position as an associate.

My suggestions:

1.  Don’t EVER send out a resume without a cover letter.  If you are emailing the resume, the body of your email can be the “cover letter” with the resume as an attachment.  But don’t waste the email; make it a sales document.

2.  Remember “You are the product.”  You must sell yourself; there are lots of young DC’s out there who are your competition, so don’t be afraid to market yourself.  There is certainly a fine line between arrogance and confidence, but too many people err on the side of caution and don’t promote. 

3.  Keep at it.  Send out resumes to doctors in your area and then follow up with phone calls.  Ask, “Did you receive my resume? Do you have any interest in hiring an associate?   If not, do you know another doctor who might be interested?”

Good luck with this process.  Let me know how your search goes.