Here is a page from our subcontractor's manual which might help explain this in legal terms, whether or not anyone LIKES what it means......
TOPIC: INDEPENDENT CONTRACTOR VERSUS EMPLOYEE
With medical transcription becoming more and more a home-based industry, it is important to understand the difference between working as an employee and working as an independent contractor. As part of creating our business, we went to great lengths to re-engineer certain parts of the medical transcription process to take advantage of new developments in computer technology. The research we did and the lessons we learned have contributed to our success. We share that knowledge willingly with our professional colleagues in the hope that it may save them a great deal of pain and unnecessary time spent trying to “reinvent the wheel.”
While we can give you the benefit of our knowledge and encourage you in certain directions, as an independent contractor you must act independently. The infamous 20 rules from the Internal Revenue Service are listed below, as summarized by the National Federation of Independent Businesses. The Internal Revenue Service considers a “yes” answer to any one of these 20 questions to be evidence of an employer/employee relationship. However, because the technology used in our field -- with particular regard to digital dictation systems -- evolved after the 20 rules were formed, we are providing some insights into the relationship we plan to enter with independent contractors.
1. Do you provide the worker with instructions as to when, where, and how work is performed?
Our contractors have full control over the location and design of their offices, how they choose to structure their work and when they choose to work. We try to accommodate their needs and preferences as much as possible.
2. Did you train the worker in order to have the job performed correctly?
No. We expect that our contractors have trained themselves in the skills necessary to perform medical transcription. We are available to them as a technical resource to answer questions and to help trouble-shoot problems. We do not, however, “train” our workers.
3. Are the worker's services a vital part of your company's operations?
No. Our business is designed so that any number of subcontractors can play an electronic version of musical chairs with regard to our digital dictation system. If one cannot perform, or chooses to break off relations with our company, others can step in and do the work.
4. Is the person prevented from delegating work to others?
No. As long as the turnaround time and standards of quality referred to in our contract are met, there is no such restriction on our subcontractors.
5. Is the worker prohibited from hiring, supervising, and paying assistants?
No. As long as the turnaround time and standards of quality referred to in our contract are met, there is no such restriction on our subcontractors.
6. Does the worker perform services for you on a regular and continuous basis?
No. The subcontractor informs us when work is desired and how much work is desired. We try as much as possible to meet the demands and preferences of the subcontractor.
7. Do you set the hours of service for the worker?
No. The hours worked are totally chosen by the subcontractor.
8. Does the person work full time for your company?
No. We encourage subcontractors to take work from other sources.
9. Does the worker perform duties on your company's premises?
No.
10. Do you control the order and sequence of the work performed?
No. We can assign certain types of work or jobs to the subcontractor but the subcontractor can perform those jobs in any order s/he desires.
11. Do you require workers to submit oral or written reports?
No. We require a written invoice on the last day of each month. An invoice is not a report.
12. Do you pay the worker by the hour, week or month?
No. We pay our subcontractors by the minute of recorded dictation time logged on our digital dictation system.
13. Do you pay for the worker's business and travel expenses?
No. Our subcontractors are responsible for all of their costs of doing business, including long-distance telephone calls.
14. Do you furnish tools or equipment for the worker?
No. Our subcontractors are responsible for purchasing and maintaining their own computer equipment. If we provide a subcontractor with any shareware, this is software that is readily available from on-line services. Because the telephone handset which can be used to access our digital dictation system is a piece of proprietary equipment, we will lease that equipment to the worker for a set fee per month.
15. Does the worker lack a “significant investment” in tools, equipment and facilities?
Hardly. A professional medical transcriptionist is expected to own the reference books, software, and computer hardware that comprise the basic “tools of the trade.”
16. Is the worker insulated from suffering a loss as a result of activities performed for your company?
No. The worker's ability to achieve a profit or loss is totally dependent on the worker's productivity.
17. Does the worker perform services solely for your company?
We certainly hope not. We encourage all of our subcontractors to develop their own accounts.
18. Does the worker not make services available to the general public?
We have no control over that. However, as mentioned above, we encourage all of our subcontractors to develop their own accounts.
19. Do you have the right to discharge the worker at will?
No. Our contract states specific terms for dissolving the working relationship between Alert & Oriented and a subcontractor.
20. Can the worker end the relationship without incurring any liability?
No.