WP 12 | Should I Move from 1099s to W2s? - Live Consulting wtih Bewindi Jackson

Show Summary

In this podcast episode, Whitney Owens, a licensed therapist and practice consultant, and Bewindi Jackson, a licensed therapist and telehealth practice owner, discuss the differences between hiring therapists as 1099 independent contractors versus hiring them as W2 employees. They also touch on the advantages and disadvantages of each model, such as independence, financial benefits, and turnover rates. Additionally, they delve into the importance of considering the values that are important to the practice and how they align with the chosen business model. They also discuss the importance of running the numbers and making sure the practice is profitable while also providing the best experience for clients and therapists.

Differences between 1099 and W2 Employees for a therapy office

As you would expect, there are differences between hiring therapists as 1099 independent contractors versus hiring them as W2 employees. They mention that one of the advantages of 1099s is the independence and flexibility it provides for both the therapist and the practice owner, as well as the financial advantage of not having to pay for taxes or supplies. However, they also point out that turnover tends to be higher with 1099s and that values such as community and stress-free management are important to consider when deciding which model to use. They also mention that it's important to make sure you stay in the healthy percentage range when paying out to contractors and that it's important to have enough clients to make it worth hiring them. It is also mentioned that it's good to consult with an attorney to know what is allowed in your state.

The advantages and disadvantages of contractors vs employees in a therapy office

They emphasized the importance of understanding the regulations in your state, and consulting with an attorney, to determine which model works best for your practice. The hosts also discussed the advantages and disadvantages of each model. The 1099 model offers more independence for the therapist, as they are able to work at multiple practices and manage their own schedules. Additionally, the practice owner does not have to pay for taxes or supplies for the therapist. However, there is typically more turnover with practices that have 1099 therapists. On the other hand, the W2 model offers more stability and less turnover, as therapists are usually only working for one practice. The practice owner also has more control over the therapist's schedule and can provide benefits such as health insurance. However, the practice owner is responsible for paying taxes and other expenses for the therapist. Overall, it's important for practice owners to consider the values that are important to them and how they align with the different models.

Staying Profitable when hiring in a therapy office

As noted in the show, owners need to understand the importance of staying within a healthy percentage range when paying out to contractors in order to ensure profitability for the business. They emphasized that it is important to make sure that you are making enough profit and that the cost of hiring contractors is worth it by having a sufficient number of clients. They also mentioned that it's important to make sure you stay in the healthy percentage range when paying out to contractors and that it's important to have enough clients to make it worth hiring them. This is important to consider when making the decision to hire therapists as 1099 independent contractors or W2 employees. Overall, it is important to be mindful of the financial aspects of the business and ensure that the hiring decision is sustainable for the practice.

Conclusion

In conclusion, the podcast discussed the differences between hiring therapists as 1099 independent contractors versus hiring them as W2 employees. The hosts outlined the pros and cons of each model, including the level of independence, financial benefits, and turnover rates. They emphasized the importance of carefully considering which model aligns best with the values and goals of the practice. Additionally, they stressed the importance of maintaining a healthy percentage range when paying out to contractors and ensuring that there are enough clients to make it worth hiring them. Overall, the podcast provided valuable insights and considerations for practice owners looking to expand their team. 

Links from the Show

Connect with Whitney

Quotes from the episode

  • "When we talk about 1099s, we're saying someone signs a contract to do a certain job for you. So the idea of a painter comes to your house, they bring their own paint, they come when they want to come." - Whitney Owens

  • "The other some of the other advantages of a 1099 is the financial advantage of you're not having to pay their taxes." - Whitney Owens

  • "We do tend to see more turnover with practices that have 1099s and less clinician turnover with the W2 practice." - Whitney Owens

Produced by James Marland

Show Notes Created By James Marland

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WP 11 | Expert Insights on Hiring a Virtual Assistant