What is the difference between an employee and an independent contractor?

And how to make sure you are classifying staff correctly.

Staffing certainly is a hot topic right now. Across all industries, there seems to be a common thread, there is a lack of people that are willing and ready to work.

How do I find more staff?
Why is there a staffing crisis?
What is causing the labour shortage?

In staffing, these are the most commonly asked questions on Google right now. It truly is a difficult time to find and retain staff. That being said, it is critical that those who do have staff are classifying them correctly.

What is the difference between a contractor and an employee? 
If you don’t know the answer to this question, keep reading because being misclassified can lead to a plethora of risks, including audits, thousands of dollars in penalties and more.

First, what is a contractor?

A contractor is technically a self-employed, independent worker or freelancer. They are not employed by the business, but rather, operate independently on a contract basis. This means that they are not on the businesses’ payroll and can work for multiple clients at one time.

Now, what is an employee?


An employee is hired by the business entity to carry out specific tasks for an agreed-upon salary or wage. Employees must follow the organizational structure of their employer and typically, work exclusively for one dental practice. Hiring hygienists and assistants as employees means that the employer is required to withhold deductions and taxes, manage benefit plans, issue yearly tax forms and ensure that staff is covered by professional liability and worker’s compensation insurance.

So, what’s the big deal?

They sound pretty similar, right? In the dental industry, there is a lot of ambiguity surrounding temporary dental hygienists, dental assistants and contract workers. In truth, it is almost impossible for dental staff to be properly classified as contract workers. Not to mention, if misclassified, practices and staff face costly audits, thousands of dollars in fines, penalties and potential jail time.

How do I make sure that I don’t mix them up?
 According to Dental Lawyers, DMC, the courts use a 4 part test to determine whether your employees should be classified as a contractor or employers.

Control – A dental hygienist or assistant that is supervised and managed by a dentist is more likely to be an employee. If patients are booked by an office manager, the hygienist is more likely to be classified as an employee.

Ownership of tools and equipment – A dental hygienist or assistant that does not own the tools they use should be classified as an employee. Tools include such things as the chair, evacuation systems, radiography equipment, fluoride, ultrasonic unit, computer, etc.

Chance of profit – A dental hygienist or assistant who earns a steady salary is more likely to be an employee.

Risk of loss – A dental hygienist or assistant who stands to lose money because of business costs like gloves and equipment is more likely to be an independent contractor.

In North America, it is absolutely critical that employers and employers are correctly classified. For dental practices, hiring contractors can save some time and money in the short term, but it really isn’t worth the risk, especially due to the nature of the dental industry.

On the other hand, dental hygienists, assistants and office staff should also ensure that they are being properly onboarded. When dental staff pick up temporary shifts, both with staffing agencies and directly through dental offices they must ensure they are being onboarded as employees. If not classified correctly, staff risk being audited, not properly insured and more.

Still unsure of where you, your employees or contract workers fit in? That is where WORKFORCE Dental Staffing Solutions comes in. We onboard all dental staff as employees of WORKFORCE so you never have to worry about insurance, payroll, taxes or deductions again. All you have to do is tell us what shifts you want to work or need to be fulfilled and we will provide the staff. We are full service and that is exactly what you should expect from your staffing agency.