November 29, 2023


Moving Forward

L.A.’s new Freelance Worker Protections Ordinance should prompt California dentists statewide to review associate classification

An ordinance took result July 1 in Los Angeles that established sure specifications for businesses who use and retain freelance employees within just the town. The ordinance also set up specific legal rights for freelance workers to file a complaint or carry a civil action to implement the ordinance or get well damages for alleged violations of the ordinance.

Dental observe entrepreneurs in Los Angeles must stick to the new ordinance, but apply owners throughout California should also choose the chance to look at the authorized associations with their workers and be certain they are classifying and having to pay associate dentists effectively.

Dentists employed as associates or who are thinking about associateship need to similarly have an understanding of their occupation classification and hope or request a published contract. (CDA features associates a sample affiliate settlement described later in this short article.)

Los Angeles ordinance needs published contract, well timed payment, record-maintaining

The Freelance Employee Protections Ordinance of Los Angeles applies to a agreement amongst a freelance employee and the employer or selecting entity executed on or just after July 1. The ordinance’s provisions apply to any freelancer’s function entitled to payment of $600 or far more in a calendar year, but the work is relevant only if it is carried out inside of the town of Los Angeles and for the choosing employer.

Observe house owners in Los Angeles should really browse the ordinance for the total specifics but, in brief, the ordinance requires employers do the subsequent:


  • Put into practice a prepared contract that consists of a few specific items of information and facts related to employer and worker make contact with data, day of compensation and itemization and benefit of the freelancer’s services.
  • &#13

  • Present well timed, full payment on or prior to the day specified in the agreement.
  • &#13

  • Retain penned documents for no much less than four several years. Freelance workers share this requirement.
  • &#13

The ordinance clarifies, “No employing entity shall discriminate or just take any adverse action against a Freelance Employee that penalizes the Freelance Worker” or usually deters the employee from in search of to assert or lawfully implement their legal rights underneath the ordinance’s provisions. 

Enforcement, grievance reporting and allowable damages are defined. For illustration, if the hirer fails to pay out the freelance employee the quantity agreed to underneath the contract by the specified time, the freelance worker will be awarded damages up to 2 times the quantity that remains unpaid and will be awarded an extra $250 if they asked for and have been refused a published contract just before commencing perform.

Defining staff vs. unbiased contractor or freelance employee

The Los Angeles City ordinance sets its individual definition of “freelance worker” that impacted using the services of entities ought to heed, but all observe owners throughout California ought to study the authorized relationships of their employees to ensure they have labeled and are having to pay them appropriately. Affiliate dentists or folks considering joining a practice as an associate dentist must also realize how their romantic relationship with their employer is structured.

An associate dentist can be hired into an recognized observe as an employee who abides by the follow owner’s insurance policies, qualifies for minimal expected advantages and is paid in accordance with wage and hour rules. Or, the associate dentist may perhaps be hired on as an unbiased contractor, who is not an personnel and does not obtain employer gains but retains the suitable to management how they deliver their expert services, which include placing their possess program.

Importantly, unbiased contractors or freelance workers could be compensated based mostly on their manufacturing or on a flat fee per support, to which most wage and hour labor rules do not implement.

CDA’s member-only resource Associate Lawful Associations describes in element the distinctions involving an staff and independent contractor and how to appropriately figure out that classification applying the Borello check. (The ABC exam must be utilised to classify non-dentist workplace staff, but CDA in 2021 advocated and secured an exemption to laws, which allows companies to continue on making use of the extra versatile Borello check to classify affiliate dentists.)

The affect of this classification for the employer and unbiased contractor is sizeable.

Thoroughly classifying a worker as an unbiased contractor may perhaps help you save the follow proprietor revenue and the price of advantages, this sort of as pension, team wellbeing and workers’ compensation insurance policies as perfectly as Social Stability and unemployment coverage taxes.

Affiliate dentists should really check with issues to safeguard on their own. They can relatively check with the exercise owner for proof of workers’ payment and premises liability coverage, for instance. The CDA useful resource outlines concerns the associate dentist prospect really should talk to relevant to payment prior to entering a contract with a dental follow.

Beyond possible confusion about obligations, hours and fork out are the opportunity authorized liabilities of misclassification. 

“The publicity for unintentional misclassification is significant, but not as severe as an intentional misclassification,” claims CDA Employment Techniques Analyst Michelle Coker, PHR, PHRca.

Observe homeowners who have deliberately misclassified their affiliate could be held liable for unpaid withholding and payroll taxes.

Whichever the classification, have a penned affiliate settlement in drive

“Regardless of the functioning arrangement you pick, it is important that you memorialize the terms in a published arrangement,” Coker claims.

“A composed associate settlement generates a ‘win-win’ prospect for the two the possible associate and the practice proprietor,” Coker adds. “When both of those parties have the possibility to converse their individual targets and anticipations about the potential partnership, those targets and expectations are a great deal more probable to be achieved.”

Simply because an associate’s misclassification or a improperly written associate agreement can end result in economic and authorized issues for both of those the practice owner and the affiliate dentist, CDA advises both equally parties to talk to with an lawyer or a tax advisor who specials with dental transactions and affiliate agreements.

Member-dentists can use CDA’s sample associate settlement, which is aspect of the Legal Reference Guidebook for California Dentists. Extra assets on associateships are also accessible.