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Even Better Year Series: Are You Making the Right Legal Moves for Your Practice? Guidance From Attorney John David Gardiner | POP 1151

How can you confidently navigate the complexities of hiring in your private practice? What tools and strategies can streamline your operations and protect your practice from legal pitfalls? Why is proactive legal guidance essential for your practice’s success?

In this episode, John Gardner breaks down the best legal steps to take when building and growing a private practice, from hiring the right team to staying compliant with employment laws. 

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Meet John David Gardiner

A photo of John David Gardiner is captured. He is a member at Bodman PLC and chairs the firm’s Liquor Law Team. John is featured on the Practice of the Practice, a therapist podcast.

John David Gardiner is a member at Bodman PLC and chairs the firm’s Liquor Law Team. With over a decade of experience in business and employment law, he represents employers in various matters, including white-collar crime investigations and general civil litigation. John has a background as a former assistant district attorney and has served in various leadership roles in community organizations.
 
Find out more at Bodman Law and connect with John on LinkedIn.

In this Podcast

  • The Building Blocks of Your Practice
  • Hiring Smart: 1099 vs. W-2
  • Tools and Tips for Compliance
  • Why Legal Guidance Matters

The Building Blocks of Your Practice

Starting a private practice is exciting, but it comes with legal and operational complexities. John Gardner stresses the importance of laying a solid foundation by establishing the right business structure and understanding employment classifications. Whether you’re hiring your first intake coordinator or launching a group practice, being proactive can save you from costly missteps later.

There is very little liability if you characterize someone as an employee… misclassifying them as an independent contractor… can lead to serious liabilities. — John Gardner

  • Choose a legal structure (LLC, PLLC, or corporation) that suits your state and long-term goals.
  • Invest in a basic employee handbook to ensure consistency from day one.
  • Understand the tax and legal requirements of hiring employees versus contractors.

Taking these steps creates a sustainable practice while giving you peace of mind to focus on growing your services.

Remember, a little upfront preparation avoids major problems down the line.

Hiring Smart: 1099 vs. W-2

The choice between 1099 contractors and W-2 employees is more than a financial decision; it’s about aligning your team with your practice’s values and operations. John highlights that hiring clinicians involves not only legal considerations but also cultural implications.

“If your clinicians are doing the same work, splitting them into 1099s and W-2s… sends mixed messages and creates potential red flags.” — John Gardner

  • Evaluate if the work is integral to your business. If it is, W-2 employment might be the safer option.
  • Use contracts to define roles, responsibilities, and expectations.
  • Avoid setting schedules for 1099 contractors—this could legally redefine them as employees.

John also points out that transitioning from 1099s to W-2s can build a more unified and committed team. While W-2s may involve higher upfront costs, the stability and reduced liability often make them worth it.

Tools and Tips for Compliance

Operational efficiency is vital for reducing the headaches of employment classification. John recommends using modern tools like Gusto to handle payroll and compliance with ease. These platforms simplify tax filings, employee benefits, and onboarding processes.

“It’s never a bad time to start shoring up your processes. A proactive approach to compliance will save you in the long run.” — John Gardner

  • Use payroll systems to automate tax withholding and benefits.
  • Regularly review your employment classifications to adapt to legal changes.
  • Conduct an annual “risk assessment” with an employment attorney to ensure compliance.

Staying proactive with these tools and strategies minimizes risk and helps you focus on growing your practice. Don’t wait for an issue to arise—proactively maintain your practice’s foundation.

Why Legal Guidance Matters

Navigating employment law can feel overwhelming, but having the right support makes all the difference. John emphasizes the importance of building a “bench” of trusted advisors, including attorneys and accountants, who understand your industry.

“Knowing what you know and recognizing what you don’t… Having someone on your bench… can save you time, money, and stress.” — John Gardner

  • Find professionals with expertise in employment law and private practices.
  • Ask potential advisors about their experience with service providers or small businesses.
  • Maintain an ongoing relationship to address changes or questions as they arise.

Legal compliance isn’t a one-time task—it’s a continuous process. By partnering with the right advisors, you can confidently adapt to new regulations and avoid unnecessary risks.

Pro-Tip: Start small. Begin by reviewing one or two aspects of your practice for compliance. Whether it’s updating contracts or auditing employee classifications, incremental progress can make a big difference in protecting your practice’s future.

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Even Better Year Series: Is Virtual Reality the Future of Sexual Health Treatment? Insights from Dr. Lori Brotto | POP 1150

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Meet Joe Sanok

A photo of Joe Sanok is displayed. Joe, private practice consultant, offers helpful advice for group practice owners to grow their private practice. His therapist podcast, Practice of the Practice, offers this advice.

Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners who are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.

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Podcast Transcription

Joe Sanok 00:00:01 Every single phase of private practice has its own unique challenges and its own unique opportunities. Whether you’re starting and growing a solo practice, getting a group practice going, whether you’re already a group practice boss or you want to go big and go national with the skills you have, every phase has its challenges. And, you know, doing that in community with people and learning from other folks and having that guidance is so, so important. That’s why we have a membership community for every phase of practice. Next level practice is for solo practitioners to help you get organized, fill up your practice, and get that solo practice rocking. We have small groups, we have accountability partners. We have live events every single week. And also if in the first three months and the first 90 days, you’re not satisfied, we have a 90 day money back guarantee. Next we have group practice launch. Group practice launch is a six month program specifically for you to launch a group practice. We have weekly meetings with that as well as well as guided courses, and you get full access to next level practice, and you’re guaranteed to hire someone in the first six months, or you get to go through it again for free. Joe Sanok 00:01:13 Next we have group practice boss. Group practice boss is for people that have group practices and want to continue to grow. All those ups and downs of having a group practice of changing that mindset, being in community with other people and getting that support from us. We with that as well, have weekly meetings and you get to come to next level practice events as well. So that’s eight meetings a month that you could come to live to get extra help. Also, there’s a 90 day money back guarantee. Lastly, we have audience building Academy. Audience building Academy is specifically for people that are ready to level up and go national. Maybe you want to get a traditionally published book, have a podcast, launch some products and courses, and scalable income. Audience Building Academy is specifically for you so that you can level up and go national. We’ll walk you through exactly how you go from having a solo or a group practice to going national. We’ll help you build your email list, get on podcasts, and really level up. Joe Sanok 00:02:13 So no matter what your face is, we have a membership community for you over at practice of the practice. Com forward slash memberships. You can read all about them and sign up. Go in there and decide which membership phase is for you and join today. Again that’s practice of the practice. Com forward slash memberships. This is the practice of the practice podcast with Joe Sarna session number 1151. I’m Joe Stanek, you’re host. And welcome to the practice of the Practice Podcast, where we help you build a thriving private practice that you absolutely love. This is part of our brand new series here, kicking off 2025 the Even Better Year series. You know, when I really reflect on how I grow over time, I think it was Gary Vaynerchuk that I heard say that people overestimate what they can do in a year, and they underestimate what they can do in a decade. And now that practice of the practice is well over a decade old. You know, we launched it in 2012. that’s so true. Joe Sanok 00:03:26 You know, sometimes when you look year over year, you’re like, oh, man, just small incremental changes. But then you do that over a decade and you’ve got something amazing on your hands. and that’s why, you know, I named this series the Even Better Year series, because I think that sometimes around New Years, we think about these big goals. I’m, you know, I’m not going to drink for a whole year. I’m going to work out every day. And yes, therapist, we know that, you know, by February, people are going to, like, fall off the wagon with that. But if we think about even better years, it’s like, what is that, 10% happier? What is that a little bit stronger? What is that small change that can help your practice in a different way? And one of those small changes is really making sure that if you have a group practice, that you are doing your 1099 or your w-2s correctly. We actually just had a consulting client that unfortunately started with us was 1099. Joe Sanok 00:04:14 And then within just a little bit, the IRS came said that they had misclassified their 1099, oh, all these back taxes and now they’re basically shutting down their practice. So this matters. This is the stuff that we really need to know what to do. And the professionals that need to do some risk assessments for us. So that is why I am so excited to have John David Gardner with me. John is chair of Bodman PLC’s sorry, Bodman PLC’s workplace law practice group based in Michigan. Here in the United States, John represents employers in a full range of labor and employment law matters, including day to day employment law, counseling. traditional labor law matters, and development of employer policies and practices in employment related litigation and dispute resolution processes. Also, I want to say that this is not you getting free attorney advice. This is us talking. So please do not construe this as legal advice for you as we talk about this. As we say at the end of every episode, find your own attorney, accountant, or expert when it comes to your unique situation. Joe Sanok 00:05:19 John. Welcome to the practice of the Practice podcast. John David Gardiner 00:05:22 Thanks, Joe. Thanks for having me on. Joe Sanok 00:05:23 Yeah, absolutely. well, it was great. I always love when I meet someone first in person and then I’m like, oh my gosh, you’d be a killer guest on the show. We had lunch together with this dad’s group that meets up here in Traverse City. And right away I think I was leaving. I had like 15 minutes and you were coming in a little bit late, and it was like, I got to talk to John Moore. This guy seems awesome and doing such cool stuff. So really excited to have you here on the show. John David Gardiner 00:05:47 I have a face for podcast, but I’m glad that you want to meet in person and I hopefully I can, fulfill the expectation here. Joe Sanok 00:05:53 Yeah, well, let’s start with, have you always been into employment law? Was that, like, how you started? Like you went, you know, through, you know, graduate school in law school saying, like, employment law was my jam or was that something that kind of emerged as you got to know different aspects of the law? John David Gardiner 00:06:07 You know, I gotta throw credit to my folks who are both MSW social workers as, as it turns out. John David Gardiner 00:06:13 And so, while they were encouraging of all endeavors of mine, including law school, you know, we all graduate with the same degree. And so what I found fairly quickly is I really like the advice of counsel and the interaction with clients, people not, you know, forums or computers or what have you. And so that naturally kind of led to what has become, predominantly, employment law, workplace law, with some spin off litigation work. but I think the best part of it and this will be, not lost on your audience is the, the client interaction. Right. The advice and counsel working with, sole proprietors, small, medium and large companies. air or, you know, single, you know, someone who’s doing it all. it’s it’s the, it’s the human factor that that makes it interesting. And, in my line of work, it’s it’s job security. There’s always going to be, some, some personnel matter. Joe Sanok 00:07:09 Yeah. For sure. That’s awesome. I’m wondering, so our audience, I’d say maybe 10 to 15% are just starting their counseling practice. Joe Sanok 00:07:18 So very early stage, it’s just them. The rest usually have at least 110, 99 or W2. So this could be an intake coordinator that maybe does phone calls. it could be someone that, you know, early on, they’re not necessarily sitting at a desk for 40 hours a week because that’s just not really worth it. They might be fractional. They might be kind of as needed. maybe they’re even 1099 in a, a company or something like that where, they, they’re contracting, you know, with a specific company. And then as they start to grow, the typical kind of what we see is either someone going into a sustainable solo practice, so they’re pretty full. Maybe they have a few other staff that are helping with reports and things like that, or people are moving into a group practice, so they’re hiring their first clinician. and then they’re oftentimes, you know, if they’re in our programs, usually within a year, you know, 5 to 10 clinicians, all the way up to, you know, 50 or 60 clinicians. Joe Sanok 00:08:09 When you think about the average counselor at the beginning. So let’s just kind of start early stage counselor. Maybe they’ve worked at a CMH. They’re like, I’m going to start my my side gig counseling practice to eventually leave my full time job. whether it’s 1099 or w-2s or even just kind of thinking about the business more broad scope. What do early stage practice owners need to be thinking about as they get things set up and as they think through just how to position themselves to limit their liability later on if they want to grow. John David Gardiner 00:08:41 Absolutely. And I think, particularly as you start out in any, any business, formation or entity. It’s important. There’s going to be a lot of things coming at you fairly quickly. That’s not the time to have, you know, the world’s greatest handbook or, you know, the most polished form, but you do want to have a general floor set. And so the the interesting aspect of a 1099 versus a W-2, right, an independent contractor versus an employee is you can always, most always characterize someone as an employee, right? You can W-2 them whether it’s part time, full time, you know, seasonal, etc.. John David Gardiner 00:09:20 the, the individual worker may or may not agree. They may or may not want to to do that, but there is very little liability if you characterize someone as an employee. there are FICA withholdings, tax consequences, etc. if you go the other way, whether you’re starting your practice or you’re fully into a, you know, 40 clinician practice, if you characterize someone as a 1099 as an independent contractor, you have to meet the applicable test. And I think the difficulty in this space is there are a number of tests. There are state specific tests. If we look to the east and west coasts of, the US here. those are very, very employee friendly. They’re very much in favor of finding an employee, status. And the reason is, is, tax, right? There are lost tax revenues, state and federal, in municipal and local. if someone’s characterized as a independent contractor. Now, why is that? Well, because the independent contractor is supposed to be contributing, and he or she or they may or may not be contributing as, as they should. John David Gardiner 00:10:20 And additionally, employees are subject to multiple protections. The Fair Labor Standards Act requires payment of wages, overtime, etc. there are I-9 violations. I-9 doesn’t apply to a 1099, but it does two W-2. so I’ve I’ve gone way over the question, but I think it’s really important to know what you know and understand and recognize what you don’t. And I think that’s why it’s really important to have someone on your bench like you do, and like someone in your local area that can answer questions as they come up. Joe Sanok 00:10:50 Yeah, and that’s one thing we often say is make sure that you have a good employment law attorney, that even just once a year, you can kind of do a risk assessment, walk through what’s going on, what your plans are, especially as you’re changing things, you know, if you’re going from it just being you to hiring your first intake coordinator or hiring your first clinician. what are maybe some questions that if people are interviewing either attorneys that are local or in their state? I think that with access to, you know, online services, you can get people in some of the larger cities in your in your state pretty easily. Joe Sanok 00:11:23 Now, what are maybe a handful of questions that would be important that you ask your attorney or potential attorney when you’re interviewing attorneys? John David Gardiner 00:11:32 Absolutely. It’s, you know, it is truly an interview. there are multiple multiple attorneys and firms. everyone does it, somewhat different, but they’re, you know, very commonly it’s going to be what’s the applicable hourly rate, what’s the estimated cost. But I think most importantly, do you specifically give advice and counsel to, to service providers, to to counselors, to to social workers, psychologist, psychiatrist. Are you in this space? if the answer is yes, then, you know, can you give me some examples? If the answer is no. Do you practice generally employment law. Right. And if the answer is yes, then you know, what’s your what’s your primary client makeup look like. Are we talking, you know, 150 plus employees manufacturing sector collectively bargained union. You know, organizations because there are you know, there are nuanced differences. But I think as long as you have someone who has employment law knowledge, ideally they have some industry specific knowledge and experience. John David Gardiner 00:12:32 and they’re a good fit, right? I mean, that’s half the battle, right? It’s just do the personalities align? Are you going to get an esoteric answer to every question or can you get, you know, a valuable advice. And timely. and it’s it’s truly an interview and I, you know, often say, and I think it’s germane to this topic. It’s nice to have, you know, a fairly deep bench. Right? So you don’t need to give all your work to one professional or one organization. It is nice because you have that relationship. But sometimes you want, you know, multiple, multiple subs available. one could be employment, general law, one could be, you know, business law and so on and so forth. Joe Sanok 00:13:11 Now, I think when most people that are listeners are, are getting an attorney involved, they usually get one at the beginning. If the, if they’re smart, you know, saying, you know, let me make sure I file correctly in my state in regards to either my LLC or corporation or depending on the state, there’s obviously like best practices. Joe Sanok 00:13:29 Then oftentimes it’s kind of set up and it’s quiet for a while. And unless there’s a crisis of some sort, they don’t usually engage with their attorney very much until they’re ready to hire those first clinicians that are going to be, you know, they’re overflowing with referrals or they they’re ready to expand or they got a bigger office specific to that phase when someone’s looking at, okay, I’m great with anxiety with men, and I want to hire someone that’s great with anxiety with women. we get a ton of referrals. And that’s not really where I’m very good at that. Specialty specific to hiring your first clinician. Like how should people be thinking through 1099 versus W-2, as well as all the other kind of legal side of things that go into that first clinical hire? John David Gardiner 00:14:13 Absolutely. So when you’re looking at the clinical hire, the clinician hire, depending on where you are geographically, and where your, your practice, sits, you want to look at both federal law here in the U.S. and state specific law. John David Gardiner 00:14:29 And one of the issues when we’re thinking of a clinician as it relates to a practice that that is, you know, integral to the actual business operations. And so that is one factor that would favor, employee status. Right. versus someone, you know, maybe someone’s doing your books or your intake work or other kind of back office semi related tasks, which are more in favor of an independent contractor designation. So when you’re looking at hiring a clinician, one, you want to have some form of written agreement, whether you’re in at, well, state or just cause state. some, some derivation thereof, you do want something that designates what the actual status of the worker is. Are they part time, full time, or are they an employee and independent contractor? are they, you know, are they an equity owner, etc.. You’re going to want some document. It’s not outcome determinative, but it is helpful. It’s one step in the right direction in terms of documenting this was the understanding, this was the relationship. John David Gardiner 00:15:29 And this was our basis, our good faith basis for meeting the applicable test. and I say test and it’s test plural. And they’ve changed. They’ve changed, multiple times just in the last decade. So while you’ve been doing this, Joe, we’ve probably had at least seven different tests, at a federal level in multiple, multiple iterations at a state level. Joe Sanok 00:16:00 As a therapist, I can tell you from experience that having the right EHR is an absolute lifeline. I recommend using therapy notes. They make billing, scheduling, note taking, telehealth, and e-prescribing incredibly easy. Best of all, they offer live telephone support. It’s available seven days a week. You don’t have to take my word for it. Do your own research and see for yourself. Therapy notes is the number one highest rated EHR system available today, with a 4.9 out of five stars on Trustpilot. Com and on Google. All you have to do is click the link below or type promo code Joe on their website over at Therapy Notes. Joe Sanok 00:16:39 Com and receive a special two month trial. Absolutely free. Again, that’s therapy, no scam and use promo code Joe on the website. If you’re coming from another EHR therapy notes will also import your demographic data quick and easy at no cost so you can get started right away. Trust me, don’t waste any more of your time and try therapy notes. Just use promo code Joe at checkout. So broad scope. How should people think about a 1099 versus a W-2? Obviously there’s we want to know if the state is more friendly towards one or the other. We want to know that we’re following the tests. Like obviously that’s like things they have to dig into with their attorney. But big picture, like, what kind of people should we be looking at for 1099 versus w-2s? And also, what kind of mindset should the owner have as their as they’re going into that? John David Gardiner 00:17:32 Absolutely. I think pragmatically speaking. you know, I always, I’m an optimist, and I hope we all are. It may not be as difficult as it first appears to vet. John David Gardiner 00:17:43 You know, if someone could legitimately, plausibly be deemed an independent contractor. some of the things that I think are important are one, you know, the law is static. It doesn’t advance or evolve as quickly as we’d like it to. And when we get into a gig economy or, you know, multiple employment relationships for an individual, that is, you know, outside of what the Fair Labor Standards Act envisioned, you know, 90 some years ago, the, the easiest example of a 1099 is specific to the construction industry, right? You have a general or a prime. They have multiple subs, right? Whoever’s doing HVAC, plumbing, roofing, etc. they may work for this general or prime all the time, but they have their own entity formed. They’re not, you know, specifically tied to the general or prime. They work for multiple generals or primes. They bring their own tools. They come on their own schedule. You know, the general may say, hey, you know, we need you to dry in the house now, okay? We’ll get there. John David Gardiner 00:18:43 But they are, you know, a fairly easy definition of an independent contractor. And I know that’s not directly germane to your audience. But if you use that example, if you keep that example in mind, I think then we start to vet, you know, internally, is it realistic to call a clinician an independent contractor? And it’s going to be fact specific? Is it a clinician who’s working for our practice and several others? does this clinician or do these clinicians have their own entity formed? are they setting their schedule or are they, you know, all the way to technology? Are they using our office or their own office or they consulting, you know, from their own home office? do they have access to our financials? Not our records, but are they, you know, linked to our bank account? Right. That would be certainly something that would factor in favor of an employee relationship. do they receive benefits from our practice that would be in favor of an employee relationship? Do they? Have they been doing it for a significant period of time? Doing it? Meaning, have they been an independent contractor for multiple years? for our practice. John David Gardiner 00:19:47 And I know we’re talking about both starting and and also existing practices, but obviously you could start with 1099 clinicians. but if we have the same clinician or clinicians and we’re talking, you know, year or years into the future, it’s going to start to evolve into, you know, everything that looks like and smells like a, employee status. and so you do need to be fluid and, and be running, you know, whether the pressure tests or internal spot audits, it’s I think it’s easier than it sounds. Joe Sanok 00:20:16 yeah. Joe Sanok 00:20:17 There’s two things I want to go back to. and I’m going to say them both so I don’t forget them. So one is around scheduling and the other is around, especially when people are switching. I’ve seen people have a like do you want to be a W2 and have half the team 1099 and half the team W2? So I want to start with the scheduling side. So in therapy it’s often you know, the client says you know, do you have anything on Wednesdays at 4 p.m. or do you have anything on Saturdays. Joe Sanok 00:20:42 And so it’s very client determined. What would people do that could kind of screw up the 1099 thing regarding scheduling? like what would that look like if you were really, like not treating a 1099 like a 1099 specific to counseling and scheduling? John David Gardiner 00:20:58 Yeah, I think specific to scheduling, as long as it’s the, the 1099 in this example, as long as it’s their preference, their stated preference. Right. it can be as nuanced as I, as your 1099 prefer to work Wednesdays and Saturdays. That’s fine. You would take that availability and push that out to potential clients, right? the alternative leads to to the opposite result. If you are saying, okay, at 1099, we need you on Wednesdays and Saturdays. You’re now setting the schedule in there. You know, whether we’re using the, the former 20 factor test or the ABC test or the, you know, the six factor or five factor test. And I won’t get I won’t nerd out on them, but, they’re, you know, it’s the it’s the entire, the it’s the entirety of the relationship. John David Gardiner 00:21:49 and setting the schedule is just one factor. but I think that’s an important question, Joe. And it’s it’s relatively easy to, you know, be able to differentiate between is the, the contractor telling us when he or she’s available or are we telling them when, when they need to report? Because the difference can be, you know, the difference in in outcome. Joe Sanok 00:22:09 Yeah. And then when someone’s transitioning from 1099 to W-2s, my advice has always been, and this isn’t from the legal standpoint, it’s more just like the culture. to say, switch everyone over. Don’t. Unless there’s a good reason. Like, for example, there might be like people that are intern status that need to have something different. or they’re like pre licensed status and they’re very different from kind of the fully licensed clinician. to me, it seems like if you have half the team that is required to come to staff meetings and the other half that are 1099 and you’re not requiring them, you’re saying, hey, it’d be smart to, but I can’t make you that. Joe Sanok 00:22:43 That just disrupts the DNA of the practice and the kind of vision setting and like, we’re in this together. what are your thoughts in regards to splitting a team in 1099 and W-2s? John David Gardiner 00:22:54 Yeah. And I think you’re the pragmatic, and the legal are the same answer. So, I think it is a red flag potentially, if you have, you know, a group of similarly situated workers and some are 1099 and some are w-2s. And so not only for, you know, the strength of the practice and for a unified workforce, but also for any sort of audit. the you know, the immediate question will be, okay, I understand that you’ve you’ve called these, you know, half dozen independent contractors, but they seem to be doing the exact same thing as the other half that you’ve deemed employees. Right. And so the the impetus and the inference is you’ve misclassified and there’s, you know, attendant liabilities in doing that. So if you’re going to to make a switch, unless you have unique facts. John David Gardiner 00:23:45 Right. So we’ve got 11 employees. We’re transitioning everyone to employment status, but we’ve got one clinician that only is available Fridays. you know, they they work for other practices. The majority of the rest of the, the week. that that would probably be safe. But otherwise, you want to be consistent across the board and it’s, you know, it’s a value add in terms of your, reduction of liability exposure. Joe Sanok 00:24:12 Yeah. Now, one, I think perception of people that have 1099 is that it’s harder to have w-2s it’s more expensive. it’s just like way more operational costs, way more liability because people, you know, are your employees. What would you say to those mindsets? John David Gardiner 00:24:31 Yeah. I mean, there are I don’t generally or at a service level, I don’t disagree. Obviously, I’m not a doom and gloom person. And I already mentioned I’m an optimist. So I don’t think it’s really helpful to, you know, try and scare people straight and say, well, it’s really not up to the worker. John David Gardiner 00:24:48 And if you misclassify which would otherwise be an employee, you could have liability. You could have liability in a number of areas. IRS, state and local taxing authorities, wage and hour claims W9 or excuse me, I-9 violations, etc.. I think the the better way to look at it is, is there going to be a significant difference for the individual worker and or the practice if we have, you know, maybe it’s a W-2, a part time worker, we’re taking FICA withholdings. They’re now eligible for our worker’s comp. They you know, they’re eligible, perhaps for unemployment benefits. And I recognize that there is a difference once you do that. But the to have a liability, kind of out there, hanging over a practice owner’s head, that to me just doesn’t. The risk isn’t worth the reward. The juice isn’t worth the squeeze. and again, to the beginning of my thoughts. You you are very, very, very unlikely to ever have a, you know, a claim for someone who feels that they’ve been misclassified as an employee right there. John David Gardiner 00:25:54 They may decide with their feet. Right? They may say, no, that doesn’t work for me. it’s it’s independent contractor. I’m going elsewhere. but be mindful that while you may lose, you know, a an existing or emerging talent, you’re also going to part ways with a liability early on. and that’s, you know, I’ve said liability more than I intended, but that is, you know, it is there. Joe Sanok 00:26:18 Yeah, absolutely. Now, are there tools that you usually recommend, like, for example, when I switched, when I sold mental wellness counseling, we closed down. My attorney had recommended we closed down that PLLC just for liability because the new owner was basically buying the brand they didn’t care so much about, like having all the automations of the bank accounts and the LLC. So she started a new LLC or LLC. and then I became an employee as we refiled the new LLC for practice of the practice. So, like, we use gusto. and gusto is one of our sponsors. Joe Sanok 00:26:52 gusto.com/joe, if you guys want a few months for free. But, you know, are there other tools like that that make it just easier to have employees that you see a lot of your clients using? John David Gardiner 00:27:02 Absolutely. Huge fan of gusto. Sounds like, you know, your specific example was an asset deal. certainly that that makes good sense. So we’re, you know, we’re lights on, lights off. But we are we are literally, closing one and opening another. and we’re starting, you know, with with the individual as an employee from day one, you know, doing I-9, W-2, etc., out of the gate. and I think as you, as you move forward, it’s also important to look at, you know, what are what are you, where are you getting information from? So, you know, we specifically have a top ten, 1099 versus W-2 recommended best practices. There are a number of, I think, fairly easy to use, resources and tools. and just generally staying informed, to, you know, to, to the surprise of no one, things change. John David Gardiner 00:27:57 And this, this area in particular is fairly fluid, and I think it will continue to be because state and federal taxing authorities, their view is that they’re losing, you know, very, very large amounts of tax revenue. for what, you know, is air, quote, a misclassified, employee. and so that, you know, money’s always going to be a driver. And so I don’t see it changing anytime soon. In fact, the trend generally and the majority of US states is more and more, tests and rules in favor of employee employment classification versus 1099 classification. Joe Sanok 00:28:35 Now when it comes to talking employees, when it comes to talking 1099 what have we missed that that I should have asked you. But just due to my legal ignorance I didn’t ask that. John David Gardiner 00:28:46 No. John David Gardiner 00:28:47 that not not ignorant whatsoever. And I think just recognizing. Right. I love that, we’re in an even better year. even though it’s a, an odd year, in that it’s 2025, but the, I think knowing what, you know. John David Gardiner 00:29:02 Right. I would I would not be a good counselor. I might be a good patient or a client. but knowing what you know and knowing who to ask. And so it really, really important to get good, sound advice and counsel. Have somebody on your bench. Don’t be afraid to ask questions you don’t know the answer to. That’s exactly. You know why we ask questions. And also recognize that any modicum of proactive, energy you put towards this is, is going to help, right? So if you’re a 50 clinician practice and you’ve never looked at this issue, now’s the time to start. Right. And just to the point of your intro, you don’t need to, you know, make this year the year where you’re going to get every, every t every t crossed and every eye dotted, but start in chunks. Let’s let’s run a beta test as to the independent contractors that we’ve utilized or let’s pull, you know, let’s randomly pull out a couple examples and see if they fit the applicable test. John David Gardiner 00:30:00 it’s it’s never a bad time to start. And there’s some easy ways, right. if we have independent contractors, do they have an entity set up. Right. That is one pretty significant step in favor of okay. They have XYZ consulting entity set up that suggests that they’re an independent contractor, right? They have their own business versus they’re receiving benefits from our practice. They have access to our financials. They’ve been here for multiple years. And yes, maybe they don’t come in as frequently as other employees. But that has all of the hallmarks of, you know, a part time or otherwise, independent or excuse me otherwise employee situation. Joe Sanok 00:30:38 So awesome. The last question I always ask is if every private practitioner in the world were listening right now, what would you want them to know? John David Gardiner 00:30:47 That, there’s there’s strength in numbers. There’s there’s confidence in in taking steps. this is not as doom and gloom as it may sound initially. you know, get get, get someone that you trust, get someone that you can, can bounce ideas off of. John David Gardiner 00:31:03 I get started on, you know, just shoring up anything that may be, may have changed or may be soon to change. And I, you know, there’s, there’s reason for optimism and this or any year. And I wouldn’t view this as an area where, you know, we’re too far behind. It doesn’t even matter if we start, you know, we’re talking about a marathon and we haven’t started mile one. I think it’s just a matter of, committing to it and sticking with it. And I think what we find is that you will catch any mistakes, far in advance of any, you know, administrative agency or taxing authority. And that’s that’s what matters. Joe Sanok 00:31:39 so awesome, John, if people want to connect with you, if they want to connect with your firm, where should we send them? John David Gardiner 00:31:45 Yeah, absolutely. Joe, I’m I’m on LinkedIn as well as Boardman’s website. my name again is John David Gardner or John Gardner, unless my parents are listening. you know, email, social. John David Gardiner 00:31:57 and we’d very much enjoyed any opportunity to connect. we are Midwest, by name and nature, but certainly have relationships throughout the country and happy to, happy to assist in any way we can. Joe Sanok 00:32:10 So awesome. We’ll have all those links in the show notes. If you don’t, check out our show notes regularly, know that we have full transcriptions of the episodes, links, resources, all of that as well. John, thank you so much for being on the practice of the Practice podcast. John David Gardiner 00:32:25 Thanks a lot for having me, Andrew. Joe Sanok 00:32:33 But we have lots of other episodes coming up for you. we’ve had amazing sponsors come on, for this coming year. And it’s really exciting to just see how many episodes a week we can do to help you get to that next level. there’s so many resources over at practice of the practice. Com if you’re looking for our trusted partners, we have a section over there that can help you speed things up. also, if you’re looking for some consulting, you can head on over in the upper right. Joe Sanok 00:32:58 You’ll see. Get started now with consulting, you can apply over there. We have memberships that we’re going to be opening up, soon. So all sorts of ways to support you and your private practice journey. You know, we also couldn’t do this show without amazing sponsors like Therapy Notes, therapy notes is the best electronic health records out there. They will help you switch over from your current EHR. they also give you two months for free or, just money off if you use promo code Joe at checkout. they are phenomenal. They help with automated billing. it’s going to make it easier to outsource your billing. So many reasons to switch to therapy. You know, it’s just head on over to therapy notes.com. Read about it and at checkout just use promo code. Joe, thank you so much for letting me into your ears and into your brain. Have a great day. I’ll talk to you soon. Special thanks to the band Silences Sexy for that intro music, and this podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. Joe Sanok 00:33:53 It is given with the understanding that neither the host, the producers, the publishers or guests are rendering legal, accounting, clinical or other professional information. If you want a professional, you should find one.
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