Which is a better deal for professionals? W-2 employment or 1099?

I was just reading the guidelines on the Attorney General's website around misclassification of employees as independent contractors, for reasons completely unrelated to my own employment. (Advisory is here, 42KB .pdf download.) This got me to thinking, for professionals who make a middle-class-ish living and can deduct a good chunk of our expenses on our Schedule C, is it better for us to get a W-2 or a 1099?

Many (most?) people doing clinical work, especially when seeing people at various program sites rather than in one clinic, are paid on a fee-for-service basis. Basically, we get a specific rate for each hour that is billable to insurance, usually a ridiculously small cut of what the insurance pays for the session. At many agencies, the revenue from the billable healthcare subsidizes other community programs the agency provides that aren't billable to insurance or eligible for any sort of other funding. Clinicians are usually viewed as independent contractors and receive a 1099, then file a Schedule C (small business profit/loss worksheet), which subtracts reasonable business expenses (mileage, licensure fees, continuing education, malpractice insurance, office supplies, therapy toys, books, etc.) from the amount paid on the 1099.

When looking over the guidelines, it seems to me that most clinicians would be considered "misclassified" by the AG's office, and should be W-2 employees instead of independent contractors. The guidelines use a "three-prong test," in which all three prongs must be satisfied in order for the employer to classify the worker as anything but "employee" (which means the person would receive a W-2). Prong two is "Service Outside the Usual Course of the Employer’s Business and the text explains that:
Some examples of how the Attorney General will apply prong two:
• A drywall company classifies an individual who is installing drywall as an independent contractor.   This would be a violation of prong two because the individual installing the drywall is performing an essential part of the employer’s business.
• A company in the business of providing motor vehicle appraisals classifies an individual
appraiser as an independent contractor.  This would be a violation of prong two because the appraiser is performing an essential part of the appraisal company’s business.
• An accounting firm hires an individual to move office furniture.  Prong two is not applicable (although prongs one and three may be) because the moving of furniture is incidental and not necessary to the accounting firm’s business. 
This seems pretty clear to me. Even at places I've worked for where counseling/music therapy is a small part of what the agency does, they still clearly provide these services in the normal course of their business. These aren't situations where I'm providing services to an agency's employees, or providing them for day program folks just once in a while in unusual circumstances. These are all places that have insurance billing contracts set up so that they can bill for healthcare services that their agency's contractors (employees?) are providing, and places that advertise clinical services as part of what they provide.

The other prongs are less clear, but again, only one violation is needed for there to be a misclassification. Just for discussion's sake, prong one ("Freedom from control") states that:
To be free from an employer’s direction and control, a worker’s activities and duties should actually be carried out with minimal instruction. For example, an independent contractor completes the job using his or her own approach with little direction and dictates the hours that he or she will work on the job. 

This seems less clear. Everywhere I've worked allows folks to set their own schedule and requires us to write our own treatment plans and choose our own approach to the work. Yet the agencies often also have a lot of policies beyond the insurance regulations and ethical codes that we abide by regardless. I could see this one going either way. I have had one fee-for-service agency that more clearly violated this one by acting as if it was unacceptable pretty much to ever reschedule an appointment. Oh, and I suppose that with most any agency that does contract work, we often get into working environments where there's considerable and often clinically inappropriate direction from the agencies that are sub-sub-sub-sub-etc-contracting our work, like when we see people at day programs and group residences. Sometimes this even affects our ability to get paid, like when I show up at a program and a non-clinician staff member tells me someone isn't allowed to see me today for whatever reason.

Moving on to prong three, "Independent Trade, Occupation, Profession or Business," which states that:
Under the third prong, the court is to consider whether the service in question could be viewed as an independent trade or business because the worker is capable of performing the service to anyone wishing to avail themselves of the service or, conversely, whether the nature of the business compels the worker to depend on a single employer for the continuation of the services.
and further:

In this regard, we determine whether the worker is wearing the hat of the employee of the employing company, or is wearing the hat of his own independent enterprise.
Again, less clear. In terms of the "hat," I think I definitely work "for" and represent the agencies where I do work more so than the aforementioned hypothetical furniture mover at the accounting firm. My treatment plans and summaries have the names and logos of the agencies. Some of the programs where I see people know what agency I'm from with regards to their folks and others don't. Yet I also don't have a phone number or a desk or anything at any of the places where I do fee-for-service work.

In terms of being able to do the work on my own without the agencies, yes, technically I could. I can and do see people whose programs or family members pay me privately and I do some pro bono consulting and sometimes pro bono therapy. Without the agencies, could I make a living seeing folks with DDS/DMH services and could I bill Medicaid? It's technically possible to get onto these insurance panels as an individual provider, but they make it incredibly difficult.

Getting onto the real issue, I think it's pretty clear that any of us could petition these agencies to change clinicians from 1099 employees to W-2 employees, but what would be the benefits?

W-2 status would get us unemployment insurance.  This is a good thing.

W-2 status probably still wouldn't get us health insurance, because even W-2 employers can claim the loophole that we aren't salaried and don't work a set number of hours per week, thus aren't benefit eligible even if the employer does provide benefits to some types of staff.

In most cases, 1099/Schedule C status benefits us from a tax perspective. On my Schedule C, I can deduct everything that is a legitimate business expense. W-2 folks can only use the "unreimbursed business expenses" category, which is more limited, and which is an itemized deduction, so it only lowers one's taxable income, not one's total income (line 22) or adjusted gross income (lines 37). And if someone doesn't have enough itemized deductions possible to exceed the standard deduction, they get no credit at all for all their out-of-pocket work expenses. Line 22 is the important one to reflect how much disposable income someone actually has, and is the line one has to use on financial aid forms and so forth.

At least in my case, staying with the 1099 seems the way to go. I have health insurance since I'm benefit-eligible at one of my employers, and I wouldn't be eligible for unemployment anyway if I were to lose one small contract and still have the rest of my work. The tax benefits are far better, at least in my situation. I wonder if there are situations in which W-2 employment would be preferable?


Now here's some judicial action that's ACTUALLY anti-family

This mother was convicted of a felony for sending her kids to school in the district where their dad lives, rather than the district where she lives. The mother, who is studying to be a teacher, won't be able to teach because of the felony conviction. The father is charged with a felony of grand theft for defrauding the school system for two years of educational services for the girls.

In case it isn't obvious by the treatment they received, this is a low-income Black family. The mother lives in a housing project served by poor schools.

Aside from the ugly race and class discrimination here, this ruling is also bad news for families of any constellation other than legally married straight couples with biological children who all live in the home together. This wasn't a case of the family using the address of a random friend (in which case the district would have the right to tell them it didn't satisfy the residency requirements of the district, but which shouldn't warrant criminal charges). This family registered the children using the address of their own father. Unless the parents have opted to go to court for custody or child support reasons, the court has no business defining this family against their will. It isn't any of their business to get into where the children spend more time or who is supporting them more. Both homes are the children's homes. Like most families, they probably have good reasons they've made whatever arrangements they've made, like around finances or work schedules or health reasons, but again, none of that is anyone's business. If these children spent most of their time with a grandparent or a family friend, but without any legal arrangement, would the court say they couldn't use their mother's address either? This is why we need more legal protections for varying family structures, not laws or interpretation of laws that define families however it's convenient for the authorities.

So now this mother can't finish her degree and become a teacher, and both parents are facing stress and legal issues that will mess up their whole lives. All of this happened basically because they weren't married and living in the same home, or weren't the sort of people who draw up fancy legal documents stating that the children primarily live with their father.


Interesting show on Radio Boston yesterday about anti-recovery and ableist views

On Radio Boston yesterday, they talked with Robert Whitaker, who has written a book claiming:

Whitaker says his research which examines for the first time the long-term effects of psychiatric drugs, shows that these medications are often making diseases such as depression and schizophrenia worse, not better. He points to a major increase in the number of people getting federal disability benefits for mental illness who are taking these medications as a sign that the drugs are, in fact, contributing to chronic mental illness in America.

I haven't read the book, and after the show I have to say I'm not terribly interested in reading it -- the viewpoint is interesting, but it's pretty clear that the methodology is quite flawed and the author clearly has an agenda.

I thought the show was pretty decently balanced. They had on a mainstream psychiatrist and took a lot more calls than usual. My guess is that about 75% of the callers talked about how medications had helped them and about 25% raised validly critical points about having been prescribed medications before trying anything else or having difficulties when they inquired about weaning off of meds.

What didn't really get discussed though (and I sent them a couple tweets, but they weren't aired) was that his measures of people doing "better" or "worse" are totally flawed. Whitaker kept discussing how more people being on SSI and/or more people taking medications means that mental illness is "worse."

The mainstream psychiatrist didn't get into much theoretical discussion, since he seemed too busy correcting all the basic misinformation was presenting, namely post hoc fallacies and citing a "study" that involved eight people without a randomly assigned control group. I would have really liked to hear someone point out the premises of the recovery model and shoot down his ableism though. Throughout the hour, he repeatedly pointed to statistics about the increases of people receiving SSI/SSDI for psychiatric disabilities as evidence that medications are causing psychiatric disabilities. He also seemed to use "taking medication" to mean that someone was "doing badly" and "not taking medication" to mean someone was "doing well." There was little to no discussion about symptoms or individual perception of quality of life.

My thinking is that, yes, there's gray area, and there are certainly people for whom medication is not the best treatment, and people who are receiving less-than-optimal treatment. Sure. But what really needs to be looked at is people's quality of life and daily functioning as measures of wellness. Before there was widespread use of SSI/SSDI for people with mental illness, people had to force themselves to make a living rather than deal with their illness. Based on what people who dealt with mental illness in the '60s-'80s have told me, they couldn't try different medications and different types of treatments because of risk of a setback that could jeopardize their job, so they were just steadily miserable and stressed. Or, in many cases, folks worked 9-5 jobs because they had to, but they lost jobs frequently and made an ass of themselves all day at these jobs because they just aren't someone who can handle a full-time job. Yet once it became more accessible and more common to receive SSI/SSDI for mental illness, all of that stress from losing one job after another has vanished and they're able to do productive and meaningful things at their own pace. For many folks, just knowing that they aren't going to lose their housing and income greatly increases their mental health.

Which is "better" mental health -- not being on SSI/SSDI, but burning bridges at a different job every month and feeling miserable and not having time or energy to deal with one's mental health, or having SSI/SSDI that guarantees a roof over one's head and food on the table so that one can pursue part-time self-employment or hobbies or enjoyment of friends and family?


You do not follow Dick.

Nope, I sure don't!


Because I gotta post this at least once every winter...



(From Mozz, a blogger and actor right here in Roslindale.)


Delores Handy word of the day

"chuffist" (no idea as to what word was intended)


Delores Handy word-so-awesome-someone-who-isn't-me-wrote-about-it of the day

From Deborah Henson-Conant's publicity E-Newsletter:

Sat. Jan. 15 - McPherson Kansas In two days I'll be wearing a snowsuit and ruby slippers. My snowsuit is for the weather that's about to blast the Boston area, and my ruby slippers because I'm headed to KANSAS for a show at the beautiful old McPherson Opera House.

(By the way, last night I could have sworn I heard a local WBUR newscaster say, "Brace yourselves for a GIANT OYSTER headed in this direction!" I was pretty excited until I realized she actually said "Nor-easter." Now I'm just hoping my plane will take off - though it's probably easier to clear snow off a runway than to clear up oyster slime. But enough about the weather...)

I'm really excited about playing at the old Opera House in McPherson, Kansas and not just because of the weather, but because ...


Someone found a use for all those unsolicited yellow phone books


Spotted in an apartment building in Dorchester.


A proposal

I propose we all start calling erections "bay-ners."

EDIT: I've made a facebook group.