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Start it Up!

April 17, 2019

Welcome to the blog! I am super excited to begin sharing my journey in private practice with you and help YOU develop a practice that is individualized to your core values and is mega-successful. We are going to kick things off with a blog series on a host of topics related to understanding your financials. This topic may seem a little thick to start off with, however, it seems to be a topic NO ONE is talking about! And we need to! When you cultivate a deep understanding of the financial side of your business, your stress reduces dramatically, and you are able to make smart decisions to create the practice and lifestyle you dream of. 

Starting out, when I began hiring other therapists, I felt at a loss as to how and what I should pay them. I found myself arbitrarily picking a number out of a hat that seemed reasonable, and FINGERS CROSSED! Independent contractor, hourly, salary, hmmm, pull one out of the hat. In the upcoming blog series, we will be discussing each compensation method in detail with pros and cons, so you can choose the one (or a combination) that will make the most sense for your practice. I'm going to share with you the things I have learned as well as my current pay structure for my therapists that is MAGICAL! After years of trying every structure out there, I have finally landed on the perfect one for my practice that I am so excited to share with you.

I hope you will join me on this journey! You can sign up to receive these posts directly to your email so you never miss one, or follow us on Facebook. Do you have questions or topics you'd like to see addressed in these blogs or in upcoming courses? Email me! I'd love to hear from you. After all, Practice Love is here to provide you with what YOU need to help you run your business.

Success and Love to you my dear friends, 

Lora XO

Are My Therapists Independent Contractors?

May 8, 2019

Have you ever wondered what the best method is for paying your therapists? If the answer is yes, you are not alone! In this blog series, we will be looking in detail at the various methods so that you can figure out which is a match for your practice. This will be a series of three blog posts:

1. Independent Contractor

2. Hourly Employee

3. Salary Employee (Here I'll be sharing what I do!)

One caveat: I am a private practice owner and SLP, not an attorney! Please seek proper counsel when making your decisions on employment status.

All too often I hear, “I’m using Independent Contractors because I’m too overwhelmed to have employees.” If this is your reason for using ICs, STOP NOW! There are many reasons to have ICs, but this is not it. I don’t know about you, but if the IRS came after me for back taxes for misclassifying someone as an IC, the fines and taxes could put me out of business. So let’s make smart decisions so that we can stress less and sleep well at night.

Independent Contractors sound appealing to many business owners because it does simplify things. No need for an EIN, payroll system, employer taxes, benefits, and so much more. However, there are strict criteria one must meet to pass the IC vs. Employee test. It is crucial you are aware of the definitions to avoid costly fines and back taxes. Many think “I’ll never be audited,” but there is a good chance you will, if you use ICs. You could be audited by the Department of Labor and/or your state Employment Commission/Labor Board. I was audited once by my state, and they were looking for evidence of ICs who should have been employees. Fortunately, I was aware of the law, and passed their test. No fines for me!

-Are you telling your IC Therapist the hours in which they must work?

-Are you telling your IC Therapist the location they must work?

-Are you telling your IC Therapist how clients must be scheduled?

-Do you require your IC Therapist to attend staff meetings or other internal trainings?

-Do you prohibit your IC Therapist from working elsewhere while they are working with you?

-Has your IC Therapist been working with you for a long period of time?

-Does your IC Therapist supervise anyone else for you?

-Do you provide the IC Therapist with any benefits or paid time off?

STOP: If your answer is yes to any of these questions, they may qualify as EMPLOYEES.

-Does your IC Therapist make their own schedule?

-Does your IC Therapist have their own business cards, independent of your business?

-Does your IC Therapist work with agencies other than you?

-Is there evidence that this is not a long-term or permanent relationship?

-Does your IC Therapist incur business expenses such as travel and materials that are not reimbursed by you?

-Does your IC Therapist have the freedom to do documentation when and where they like?

STOP: If the answer is yes to ALL of these questions, your Therapist may qualify as an IC.

I will not go into detail on the 20-factor test, as you can read that for yourself HERE. Also, here is a great summation of the IRS rules, courtesy of the State of Oregon.

I hope that this information has helped you. Comments welcome! Next up: Hourly Employees.

If you want more detailed information and formulas for calculating what you can afford to pay your therapists, sign up for the Webinar here.

Success and Love to you my dear friends, 

Lora XO

Therapists as Employees: Hourly Pay

May 15, 2019

One caveat: I am a private practice owner and SLP, not an attorney! Please seek proper counsel when making your decisions on employment status.

Last week we investigated whether your therapists would qualify as independent contractors. If they do not, you now have some other decisions to make as employees. For therapists, there are a few traditional methods of compensation including:

Hourly: Billable Time Only (Full or Part Time)

Hourly: Hourly with productivity or other standards (Full or Part Time)

Salary: Flat salary with productivity or other standards of billable time (Full or Part Time).

Today we will be discussing the first two hourly options, and next week cover salary, including my latest method that includes a bonus structure that is super motivating and rewarding to the therapists.

Hourly: Billable Time only:

Many private practices use this model as it is simple and very low risk. Therapists only get paid for billable hours or sessions. This can be used with a full time or part time model. You may choose to pay per billable unit, or per billable minutes. If you choose this model there are some things you need to know to stay out of trouble…...

If you require the therapists to attend any trainings, meetings, or anything else, you do need to compensate them for anything you consider “mandatory.” If you like, you can have a different rate of pay for this sort of thing.

Consider how you will compensate for evaluations. These are often very time consuming, however, a therapist is only billing 1-2 units, so you may want to consider offering bonus time or guaranteed X hours for evaluation, otherwise they won’t be very motivated to do them. I personally do use this model for some very part-time or PRN staff. When I do, we grant the equivalent of 2-3 hours of pay per evaluation. As you may know, evaluations do not reimburse well, so the evaluation often comes at a loss. The loss can be minimized by doing treatment on the same day, and if you gain a client, you will make it up over time.

If a therapist is full-time on this model, you must comply with state and federal law in regards to what type of benefits you need to offer. Additionally, these therapists will also come under overtime rules, and you will need a plan to compensate accordingly.

Hourly: Full time or part time with productivity or other standards

This may be a great model for you if you need or want to give your therapists flexibility in their hours from week to week, and you prefer to compensate therapists for all of their time, including documentation, prep, etc. If you use this model, it’s smart to have some sort of standard for how much of a therapist’s time is reasonable to expect to be billable. Industry standard ranges from 60% to 95% billable time, depending on a therapists role and responsibilities. The percentage could also be presented as a minimum billable unit per hour worked, such as for OT/PT on timed codes, maybe 3 units per hour worked (which would equate 75% productivity).

This is a model that I use for part-time employees that work at least 20 hours or so per week. In my experience, therapists prefer this method over billable time only, because they feel that they are fully compensated for all time worked. I have seen this method be challenging at times because if they are scheduled to work 8 hours, and they have 4 hours of cancellations, they will put the full day on their timesheet, as it’s really only fair for them to do so. I have also seen therapists save documentation and put it on their timesheets on a Sunday. If you use this model, just be aware of this and have strong policies in place that may state, no work on the weekends, etc. You also need to make sure you have overtime policy and procedure in place.

With both of these hourly models, if you have traveling therapists, you will also need to determine if you will pay anything for travel time or mileage. Make sure you read up on the IRS rules for what is considered “commuting” vs “business travel.” My policy is to pay for travel that occurs within the workday. Travel to/from home to the first/last work site is defined as “commute.”

As you can see both of these hourly methods have strengths and weaknesses. Next week, we will dive into salary options where I will share about Overtime Exemptions and my latest method that is a true win-win for both you, the employer, AND the therapists. I can’t wait to share this with you!

I'd love to hear from you! Send me a message to submit topics for future articles, or any other questions you may have!

If you are looking for more information on how to calculate pay your therapists, join us for these upcoming webinars!

Success and Love to you my dear friends, 

Lora XO

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