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Mar 23

5 practical tips on paying part-time employees in a Physician practice

From the Americian Institute of Professional Bookkeepers (www.aipb.org):

1.      Withhold FICA on part-timers (and retirees). Even if someone who works for you part-time also has a full-time job where they have had 100% of their FICA withheld for the year, you must withhold the full amount of FICA from their pay. These individuals can obtain a refund of any overpaid FICA on their 1040. Similarly, if a retiree receiving Social Security benefits works for you, say, one day a week, you must withhold FICA.

 

 

2.      Former employees who come back to work for you are most likely employees—not independent contractors.  If they do the same job they did before they left, especially in the same tax year, they are employees.

 

 

3.      Length of employment does not determine worker status. Even employees who work for only part of one day are still employees, and all employment taxes apply.

 

 

4.      Giving part-timers benefits is optional. Generally, you do not have to pay part-time or summer help for holidays and need not include temps and part-timers in health, pension and other benefits. But to exclude them, have a written plan stating which benefits are not available to these workers.

 

 

5.      Defining “part-time” v. “full-time” employees. For purposes of paying overtime under federal law, this distinction is determined by company policy, not federal law. Federal wage and hour law restricts only the number of hours worked in the workweek, when overtime must be paid (for each hour worked over 40 hours in the workweek), and the number of hours that children can work.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →