Can I employ an LMSW as a 1099 independent contractor? Or must I employ them as a W2 employee?
I’m not a lawyer. I am, however, the owner of a group practice that employs a bunch of LMSWs, and prior to that, when I was an LMSW, I accrued my hours in a group practice that employed me.
The issue is, basically:
1) An LMSW can’t be paid directly by patients/clients, but rather, must be paid by an employer (and, implicitly, must be “employed,” rather than operating freelance);
2) That employer, technically, needs (by NYS law) to be a W2 employer; and
3) Most group practices aren’t set up to employ folks as W2s, but rather, as 1099s.
My understanding is that 1099 employment is definitely the dominant form of employment arrangement in NYS, notwithstanding the fact that it’s not, technically, kosher. (The consequences of being found out, as I understand it, are basically, that the employer has to go back and pay the payroll taxes they avoided by employing the person as a 1099, and, going forward, has to either stop employing folks, or move to a W2 system. That is to say: I don’t have the sense it’s a disaster if you get caught doing it “wrong,” but that it is/can be a pain in the ass. And, it can be costly, depending on how big you/the employer are.)
All that said:
1) There are lots of LCSWs out there who are willing to engage LMSWs in 1099 employment, to share their fees with them in some proportion (usually it’s either a fixed fee of $25-40/hour, but a few folks agree to pay LMSWs x% of their fees – usually 30-50%, rather than a fixed hourly fee).
2) There are a bunch of fee-for-service clinics and group practices that hire LMSWs as either W2s or 1099s.
3) An LMSW can’t see patients privately, and be supervised privately. As far as NYS is concerned, patients have to pay someone who’s got a license that permits them to practice without supervision (such as an LCSW), and an LMSW has to be paid by that person/entity. AND, just to complicate things further, the regs are clear that an LMSW can’t pay an LCSW directly to supervise them. They can, oddly, pay an entity to provide supervision, and that entity can, in turn, pass along the payment to the supervisor.
