As a follow-up to last month's blog covering the benefits of W-2 employment, we felt it was necessary to provide additional educational information about why healthcare workers should consider a W-2-compliant medical staffing agency over a 1099 contractor.  

Let's begin by understanding how the IRS determines who is an independent contractor.  

In the United States, the Internal Revenue Service (IRS) decides whether a person is categorized as an independent contractor or an employee. The IRS evaluates the nature of the working relationship and makes this decision using a set of rules and criteria. 

  • Behavioral Control: The IRS examines whether the hiring party has the right to control or direct how the worker performs their tasks. If the hiring party has the authority to dictate what work is to be done and how it is to be done, this suggests an employer-employee relationship. 

  • Financial Control: This factor relates to the extent of control the hiring party exercises over the financial aspects of the worker's job. The IRS considers whether the worker has made a significant investment in the tools, equipment, or facilities used for the job. Additionally, the payment method, whether the worker can realize a profit or loss, and whether they can offer services to other clients are considered, including reimbursement. 

  • Relationship Type: The nature of the relationship between the parties is evaluated. The IRS looks for written contracts, employee benefits, the permanence of the relationship, and whether the worker is an integral part of the hiring party's business. An independent contractor relationship is project-based, whereas an employer-employee relationship is more likely to be ongoing. 

So, why should you choose a W-2-compliant medical staffing agency over a 1099 Contractor?  

Protect Yourself

Choosing a W-2-compliant medical staffing agency offers you more significant legal protection, financial security, benefits, and peace of mind for healthcare workers.  

Workers' Compensation and Liability: W2 employees are covered by their employer's workers' compensation insurance, which provides financial protection if you're injured or become ill due to work-related circumstances. With General Liability Insurance and Public Liability Insurance (GL/PL) policies, W2 employees are covered in case of a mistake or oversight on the job. In the case of 1099 contractors, they are typically responsible for their insurance coverage, which can be an additional expense for the healthcare worker.  

Payroll Tax Compliance: By working with a W-2-compliant medical staffing agency, you ensure that your staffing arrangements adhere to all applicable laws and regulations. W2 arrangements comply with employment and tax laws, whereas 1099 arrangements can sometimes blur the line between employee and independent contractor status, potentially leading to unnecessary legal and financial risks. In the event, a 1099 contactor has a tax liability at year-end after an issue happens. When working as a W-2 employee, the agency automatically deducts your taxes from your paycheck. They handle all payroll taxes, including Social Security, Medicare, unemployment taxes, and income tax withholding. This simplifies your tax obligations and helps you meet all your tax requirements.  

Credentialing Compliance: By working with a W-2-compliant medical staffing agency, employers can confidently expect to hire healthcare workers to have the verified licenses needed for the job, quality candidates able to pass a third-party background check and drug screening with a proper chain of custody control showing honest testing. On the other hand, 1099 contractors are unlikely to guarantee this level of credentialing unless it comes from the worker's expense. Additionally, The Labor Department has been cracking down on providers using 1099 Contractors.   

Employer-Employee Relationships: When you work as a W-2 employee, you establish an employer-employee relationship with the medical staffing agency. In other words, the agency oversees giving you the resources, screening, training, supervision, and support you require. 1099 contractors, on the other hand, are typically independent businesses responsible for their equipment, education, and work procedures. 

Consistency and Stability: Working with a W-2-compliant agency often provides more stability and consistency in your employment. You will likely have a clear schedule, consistent income, and potentially long-term assignments, which can be reassuring and help you plan your personal and professional lives more effectively. Additionally, healthcare workers will have an agency chase new opportunities on their behalf, which saves valuable time in the employment process. 

 Employment Benefits: W-2 employees are typically eligible for various employment benefits, such as health insurance, retirement plans, paid time off, and other helpful benefits offered by the medical staffing agency. These benefits can improve your financial security, well-being, and overall job satisfaction. 

While there may be some rare circumstances where working as a 1099 contractor makes sense for certain situations, choosing a W-2-compliant medical staffing agency offers you more significant legal protection, financial security, benefits, and peace of mind for healthcare workers.  

Who is WSi Healthcare Personnel?  

For 35 years, WSi Healthcare Personnel has connected reliable, quality healthcare professionals with unique and impactful career opportunities, effectively improving healthcare workers' lives and executing our clients’ staffing needs throughout the western region. We specialize in recruiting and placing healthcare professionals in per diem, temp-to-hire, and direct-hire positions. We offer flexible career opportunities for those looking for new healthcare opportunities that best fit your needs.  

Don't Wait! Your next healthcare career opportunity is just a click away; Apply with us now at www.jobs.wsijobs.com or contact us at 855.974.5627 or contact us at 855.974.5627