Independent Contractor Agreement - Physician Contract Glossary

Independent Contractor Agreement

Definition

A contract where the physician offers services as a contractor rather than as an employee. Independent contractors are responsible for their own taxes, insurance, and professional expenses.

Examples in Context

“Physician shall act as an independent contractor and not as an employee of ABC Clinic. The Contractor shall be solely responsible for all tax obligations, including but not limited to Social Security, Medicare, and self-employment taxes.”

“The Contractor shall provide their own equipment, maintain professional liability insurance, and secure any necessary licenses and certifications.”

Implications for Physicians

• Independent contractors typically have greater control over their schedules and clinical practice style.
• Physicians may earn higher hourly rates but must account for taxes, insurance, and other expenses.
• No employer-provided benefits like health insurance, retirement plans, or paid time off unless explicitly negotiated.

Negotiation Tips

• Clarify malpractice coverage — will the employer provide coverage, or must you obtain your own policy?
• Ask about reimbursement for expenses such as licensing fees, CME, or travel.
• Request contract language that protects your right to accept additional contract work elsewhere.

Red Flags and Pitfalls

• Misclassification as a contractor instead of an employee may violate IRS regulations, leading to penalties.
• Ensure the contract specifies whether you must provide your own staff, equipment, or administrative support.
• Without employer-provided malpractice insurance, you may face significant out-of-pocket expenses.

Related Terms

• Employment Contract
• Professional Liability Insurance
• Indemnification

FAQs

• “Can independent contractors receive employee benefits?”
  • Rarely. Most benefits are reserved for employees unless explicitly stated in the contract.
• “Do independent contractors receive a 1099 form?”
  • Yes, independent contractors receive a 1099 form for tax reporting instead of a W-2.
• “How can I minimize tax liability as an independent contractor?”
  • Consider setting up an LLC or S-Corp to manage deductions for business expenses and maximize retirement contributions.

Legal Disclaimer

The information provided in this glossary is for educational and informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, this content is intended to help physicians better understand common contract terms and does not replace professional legal guidance.

For personalized advice regarding your employment contract or other legal concerns, we strongly recommend consulting with a qualified attorney who specializes in physician employment contracts.

You can find experienced legal professionals through our Physician Contract Lawyer Directory.