How to Pay 1099 Employee Nurse Practitioners and Contractors

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Nurse practitioners operating a thriving practice often need additional provider support to manage patient caseloads and administrative duties. An NP business owner may also be prioritizing the acquisition of passive income, or pursuing additional niche clinic opportunities. This is a great sign, and means that your hard work is paying off! To get extra support in your business endeavors, it can be advantageous to hire 1099 employees. Here, we share best practices for compensation and human resource management for employee NPs, RNs, and contractors.

How should practice owners compensate employees and contractors?

Many nurse practitioner entrepreneurs find themselves needing additional provider support about two years into their entrepreneurial journey. But how should you pay this person? It may be in the best interest of both a business owner and employee to use the 1099 compensation model.

Most states will allow you to pay a provider as a 1099 contractor. Some regulatory heavy states like California may prohibit this, so be sure to talk with your accountant before beginning the hiring process. A 1099 employee is classified as an “as needed” worker. Their position is not salaried, and the specifics of their job duties are outlined under a contract.

A 1099 employee reaps multiple benefits from this arrangement. They can work autonomously, and have the flexibility to work multiple jobs and potentially create their own schedule. For the business owner, a 1099 arrangement is especially beneficial during tax season. An employer is not responsible for paying employment taxes for a 1099 contractor.

What type of employee is best suited for a 1099 position?

Clinical positions, such as an NP and RN, are ideal for 1099 arrangements. Elite NP does not recommend 1099s for clerical employees, such as receptionists, office assistants, and billing personnel.

Employment structure

For a niche practice operated by an NP entrepreneur, this structure is optimal both financially and administratively:

Onboard a clinical employee as a 1099 contractor.
Have the new hire sign a 1099 employment contract. To get a sample 1099 contract that can be used in your practice, email [email protected].
Set up their payroll through your practice’s book keeping software or accountant.
Issue the employee a check or direct deposit payment monthly.
Pay the 1099 contractor a percentage of the income they generate, or a flat rate that is specified in their 1099 employment contract. Example: An employee nurse practitioner in Elite NP founder Justin Allan’s HRT clinic makes $100 per initial consultation, and $50 per follow-up visit. This pay breakdown is lucrative and competitive in many states.
Allow contractors to work on their time and schedule patients according to their availability.
Cover the 1099 employee’s malpractice insurance if you are financially capable. If you don’t have enough liquid cash to support insurance costs, require the employee to carry their own policy. If the 1099 contractor joins your practice under their own plan, verify that your LLC is named as an endorsement on that policy.

Other best practices for 1099 employees

It’s important to do your due diligence and perform both a background check and licensure verification on all new employees, whether they are full time or contractors. To recruit qualified candidates, post this position on popular job boards for medical personnel, such as Indeed or ZipRecruiter. Be sure to specify that the position is 1099-based on the job listing. Interview a few of the best applicants, and choose the one that is best suited to perform the services your practice provides. Hiring an experienced, motivated employee allows an NP practice owner to expand the scope of their care and pursue even more clinical opportunities!