Dental Associate Agreement and Employment Contract: Is it In line With What I Should Expect, and Is it Reasonable?

This time of year is prime time for employment changes across the dental industry.  May through August is always the busy time.  Dentists are completing residency programs, dental students are graduating, and they are all going to be reviewing employment agreements now or very soon.

Here are a few things to consider:

1)      What is the commitment?  1 year; 3 years; can you give reasonable notice if you are unhappy or dissatisfied in the practice

a.       Most are 1 year

b.      If you receive a sign-on bonus or relocation incentive expect to commit to 2+ years.  Typically, if you leave before your commitment you will need to pay back any bonus money you receive

c.       Notice periods across the nation have grown beyond the normal 2 week courtesy.  Many agreements now require 30, 60, or 90 day of resignation notice

2)      Want to associate in your home town and eventually own a practice in your home town?  Be cautious of non-competes and restrictive covenants that would cause significant headaches in the future.  Especially if your hometown is a small town. 

·         Resource:  You Can’t Compete With Me – The Legality of Non-Compete Agreements

3)      Are you an Employee (W-2) or an Independent Contractor (1099)?  Associate positions throughout the dental industry vary greatly.  W-2 employment is most likely what you truly are. That means the employer takes your tax withholding and takes responsibility of the daily operations of the practice.  1099 contractors are simply paid for services rendered.  If this is your status, you are required to fulfill the entire tax obligation of your income. 

·         Resource: IRS website: Employee versus Independent Contractor

4)      Production versus collections-based compensation:  You need to understand which way you are getting paid, when it is calculated, and what is included and not included

a.       Is it calculated daily, weekly, bi-weekly, monthly, and quarterly? Many dentist don’t know when I ask them

b.      Are x-rays or hygiene exams included? Many times there are not

c.       Lab Expenses:  are you responsible for all, some, or none of the lab expense?

5)      Base compensation questions:

a.       Is it permanent or does it sunset after x number of months?

b.      Is it a draw on future commission or is it a salary?

·         Resources:  Dentist Contract Negotiations - Compensation Considerations

6)      Be Realistic!  Associate offerings on the East Coast are vastly different than those on the West Coast.  Make sure to understand the compensation trends and models that are common in your market.  Don’t compare offers to your friends, especially if you’re only talking % versus %.  That completely depends on the production potential based on a combination of what the practice can provide and the abilities of the associate dentist.

·         Resource: What Can An Associate Dentist Earn in Different Parts of the U.S.

Other articles to explore:

·         Associate Agreements

·         Dentists – What to Know Before You Accept an Associate Position

 Posted by Carl Guthrie, Senior Dentist Recruitment Consultant with ETS Dental. To find out more, call Carl at (540) 491-9104 or email at cguthrie@etsdental.com.