There is no single definition of “contractor.” The IRS, Florida’s Department of Revenue, the Department of Labor, the NLRB and Florida’s workers’ comp law each run their own test, and a clinician can pass one while failing another. Every one of them looks at how the work actually runs, not what the contract calls it. A clinician you credential, schedule, supply with clients and pay a split you set looks like an employee to almost all of them.
Five agencies, four tests
Passing the friendliest test protects you from nothing. This is who decides what, and how hard each one is to pass.
| Law | Enforced by | Test | Decides | Strictness |
|---|---|---|---|---|
| Federal payroll taxes (withholding, FICA, FUTA) | IRS | Common-law right to control: behavioral, financial, relationship | W-2 vs 1099, payroll tax | High |
| Florida reemployment tax Ch. 443 | Florida DOR | Usual common-law rules, about 10 factors | State unemployment tax | High |
| National Labor Relations Act | NLRB | Common-law agency test; no factor decides | Organizing and concerted-activity rights | High |
| ERISA, ACA, Title VII, ADA, ADEA | DOL, IRS, EEOC, courts | Common-law agency test | Benefits, employer mandate, discrimination | High |
| Fair Labor Standards Act, FMLA | U.S. DOL, courts | Economic reality; 2026 proposal weights control and profit or loss | Minimum wage, overtime, leave | Medium |
| Florida workers’ comp Ch. 440 | FL Dept. of Financial Services | Statutory checklist: 4 of 6 criteria, then a fallback list | Whether comp coverage is required | Medium |
| Florida minimum wage Art. X, §24 | Courts, Attorney General | Follows FLSA definitions | $15.00/hr floor | Low |
Florida’s 4-of-6 check
Florida’s workers’ comp law is the only test here with a hard count. Outside construction, a worker is excluded as an independent contractor only if at least four of these six are true. Check the ones that honestly describe your clinician.
Independent contractor criteria
Fla. Stat. 440.02(18)(d)1.a.Below four, a clinician can still be a contractor under a fallback list: a set fee for specific work with control over the means, carrying the main expenses, paid per job or commission only, a real chance of profit or loss, and ongoing business obligations. Either way, the person claiming contractor status carries the burden of proof. Comp is only required once a non-construction business has four or more employees.
Passing this check covers workers’ comp only. The IRS and reemployment tax tests below are separate and stricter.
The federal tests
The IRS asks whether you have the right to control not just the result, but what gets done and how. The right counts even if you never use it.
IRS: three categories of evidence
- Behavioral control. Instructions on how to work, required methods or protocols, training, evaluation of how work is done, set schedules or locations.
- Financial control. Who carries expenses, the worker’s investment, whether they can make or lose money, whether they offer services to the public, and whether they’re paid a flat fee or a share of revenue.
- Relationship. Written contracts, benefits, how permanent the relationship is, and whether the work is a key part of your business.
Department of Labor: a rule in motion
The FLSA test is economic reality: is the worker economically dependent on you, or in business for themselves? The rule has changed three times in five years.
- Mar 11, 2024Six-factor rule takes effect. No factor controls; all are weighed together.
- May 1, 2025Field Assistance Bulletin 2025-1 tells investigators to stop applying the 2024 rule in enforcement.
- Feb 27, 2026DOL proposes returning to a modified 2021 rule. Two core factors carry the most weight: the worker’s control over the work and their opportunity for profit or loss. The proposal also covers the FMLA.
- Oct 2026No final rule located as of this update. Check the DOL rulemaking page before relying on it.
A friendlier DOL rule does not bind the IRS, the NLRB, or Florida. Private FLSA lawsuits are also decided by courts, which apply their own circuit’s factors. Florida sits in the 11th Circuit.
Everything else federal
- NLRA. The NLRB’s 2023 Atlanta Opera decision weighs common-law factors with none decisive. It also asks whether the company set the terms on its own and can change them on its own.
- ACA employer mandate. Applies at 50 or more full-time-equivalent employees. Misclassified clinicians count toward the 50.
- ERISA plans. Reclassified workers can claim they were wrongly left out of retirement or health plans.
- Title VII and ADA (15+ employees), ADEA (20+). Contractors aren’t covered; employees are.
- Form I-9. Required for every employee, not for true contractors.
The Florida tests
Florida’s reemployment tax is where most practices actually get caught. The Department of Revenue audits 1099 workers skeptically and shares its findings with the IRS.
Reemployment tax Fla. Stat. 443.1216
Anyone who is an employee under the usual common-law rules is covered. DOR weighs about ten factors, none decisive:
- Control over the details of the work, and who sets the hours
- The worker’s investment, and their chance of profit or loss
- Whether the services are integral to your business
- How permanent the relationship is
- Skill required, and whether they serve other clients at the same time
- Pay by time or share vs by the job, and what the parties believed they created
- Whether the worker operates through their own legal entity
The tax applies to the first $7,000 of each employee’s annual wages. New employers pay 2.7%; experienced rates run from 0.1% to 5.4%. Audits can reach back five years, and a common trigger is simple: a former 1099 clinician files for unemployment.
In University Dental Health Center v. Agency for Workforce Innovation (Fla. 4th DCA 2012), a dentist the clinic called a contractor was held to be an employee for unemployment tax. Being a licensed professional with clinical judgment is not the same as running an independent business.
Other Florida law that shapes the answer
- Minimum wage is $15.00/hr as of September 30, 2026, with inflation adjustments starting January 1, 2028. A W-2 clinician paid only a percentage must still clear it for every hour worked.
- Noncompetes. The 2025 CHOICE Act ss. 542.41–542.45 expressly excludes licensed health care practitioners, including mental health counselors. Their covenants stay under s. 542.335.
- Noncompetes are also evidence of control. Restricting a 1099 clinician from working elsewhere undercuts the claim that they run an independent business.
- Florida Civil Rights Act covers employers with 15 or more employees. E-Verify is required for private employers with 25 or more s. 448.095.
- No state income tax, so reclassifying adds no state withholding.
Why therapy practices fail these tests
Group practices have built-in facts that look like employment. Some of the control comes from payers and the Board, not from you, but agencies still count it.
You credential them under your contracts
If you hold the payer contracts and bill under your tax ID, the clinician can’t sell those services on their own.
You set a fixed percentage split
A split you set reads as commission pay, not a business pricing its own work.
You supply the clients
Intake, marketing, scheduling, and the EHR seat belong to you. The clinician’s “business” has no customers of its own.
Therapy is what you sell
Work that is integral to your business is a strong employee factor under every test.
Registered interns (RMHCIs)
An RMHCI works under a qualified supervisor with a written supervision agreement and can’t practice independently. Supervision is control over how the work is done.
Your policies govern clinical work
Required documentation protocols, productivity minimums, and set office hours are behavioral control.
They run a real practice of their own
Own LLC and EIN, business bank account, own malpractice policy, own payer contracts or private-pay rates.
They control the business side
They see clients elsewhere, set their own availability, use their own space or tools, invoice you, and could lose money.
“Everyone in Florida does it this way” is not a defense once you’re audited. Documented industry practice can support IRS Section 530 relief, but it doesn’t bind Florida.
If you contract with RMHCIs, the 1099 question sits on top of a separate one: under s. 491.005(4)(c), F.S., a licensed professional must be on the premises when a registered intern provides services in a private practice setting. A 1099 changes tax treatment, not that requirement. See the RMHCI supervision guide.
What misclassification costs
The real danger is the cascade: one agency’s finding gets shared, and the next agency starts from it.
| Exposure | Source | Rough size | Lookback |
|---|---|---|---|
| Back federal payroll taxes | IRS, IRC §3509 | About 10.68% of wages up to the Social Security base if 1099s were filed; more if not; full rates if intentional | Generally 3 years |
| Personal liability for withheld taxes | IRS, IRC §6672 | 100% of the trust fund portion, against owners and officers | Same |
| Back reemployment tax | Florida DOR | Rate × first $7,000 per worker per year, up to 10% penalty, plus interest | Up to 5 years |
| Loss of earned tax rate | Florida DOR | Raised to the 5.4% maximum until compliant | Going forward |
| Workers’ comp penalty | FL DFS, s. 440.107 | 2× unpaid premium (min. $1,000); $1,000 per day working under a stop-work order | 12 months, 24 if concealed or repeat |
| Unpaid overtime and minimum wage | Clinician lawsuit | Back pay plus an equal amount in damages, plus their attorney’s fees | 2 years, 3 if willful |
| Uninsured injury | Ch. 440 | You lose comp’s liability shield; the worker can sue directly | n/a |
Intentional misclassification can also carry criminal exposure under Florida law. It’s rare, but it exists.
Getting it right
Fixing classification going forward is far cheaper than losing an audit. You have three realistic paths.
A starting checklist
- List every clinician and how each is paid today, and confirm every required 1099 was filed
- Run each clinician through the 4-of-6 check above and the practice factors
- Count true employees: it decides comp (4+), Title VII and FCRA (15+), E-Verify (25+), and the ACA mandate (50+ FTEs)
- Pull every clinician agreement and flag noncompetes, non-solicits, required hours, and binding policies
- Identify registered interns and who supervises them
- Take the results to an employment attorney and a CPA together, before an agency asks
Adding clinicians breaks the systems that worked solo
Credentialing each new hire, billing under the right tax ID, vendor contracts, the admin load. We run the credentialing, billing and operational back end for group practices, so the structure you choose with your attorney and CPA actually holds up day to day. We don’t give legal or tax classification advice.
Talk to Mentality Today →This is a general educational guide, not legal or tax advice. Classification depends on the specific facts of each working relationship, and the law here is actively changing. Reading this page doesn’t create a professional relationship. Talk to a Florida employment attorney and a CPA about your own practice.
Sources: Fla. Stat. 440.02 · Fla. Stat. 440.107 · Fla. Stat. 443.1216 · Moffa, Sutton & Donnini: Florida reemployment tax audits (2026) · University Dental Health Ctr. v. AWI (Fla. 4th DCA 2012) · DOL proposed rule, Feb 2026 · Holland & Knight: DOL proposal analysis · DLA Piper: NLRB Atlanta Opera standard · IRS: employee vs contractor · IRS: VCSP FAQ · Lowndes: Florida minimum wage reaches $15 · Akerman: CHOICE Act excludes health care practitioners · Fla. Admin. Code 64B4-2.0025