The foregoing question is probably not something that keeps most practice owners awake at night. Maybe it should be. Not properly handling a relief veterinarian relationship can lead to a finding by state and/or federal agencies that a relief veterinarian is an employee of the practice, and lead to the practice being liable for past income, FICA, unemployment insurance, and other taxes not withheld for other practice employees. In a worst-case scenario, such a relief veterinarian could be entitled to all the benefits of an employee, not only related to employment taxes, but also related to benefits and payments made by the practice to other employees, including paid time off, 401 (k) contributions, and the like.To help ensure that relief veterinarians are considered independent contractors, practices should follow the following guidelines:
Under Michigan law, a licensed veterinarian may engage in the practice of veterinary medicine and operate as a sole proprietor, or may form a business as a partnership, a corporation, a professional corporation, a limited liability company, or a professional limited liability company. The tax consequences of each type of business entity differ. The Michigan Public Health Code states "A person shall not engage in the practice of veterinary medicine unless licensed” as a veterinarian. The Public Health Code defines "person” to mean "an individual, partnership, cooperative, association, private corporation, personal representative, receiver, trustee, assignee, or other legal entity”. The applicable laws are ambiguous and the Michigan courts have not yet decided the question of whether a non-licensed veterinarian may own a business that engages in the practice of veterinary medicine.