Top 5 Signs that You are a Misclassified Telehealth Contractor

by Matthew P. Suzor and Alden Hey

The global telehealth is valued at over $83 billion in 2023 with an expected annual compounding growth rate of 24 percent through 2030, making it one of the largest and fastest growing technology industries in the world. However, with rapid growth comes the possibility of predatory and exploitative business practices. Many telehealth physicians, therapists, and nurse practitioners are classified as independent contractors—but under federal and state law, they may legally qualify as W-2 employees, according to the Department of Labor’s guidance on misclassification. This article outlines five key red flags that suggest you may be a misclassified telehealth contractor, exposing your employer to liability and potentially entitling you to unpaid benefits and legal protections.

What is the difference between being a telehealth contractor and an employee?

As a contractor, you are expected to report your income through a series of 1099 forms as opposed to a singular W-2 form if you were classified as an employee. While the legal differences between these two classifications under the Fair Labor Standards Act are complex, most tests essentially relate to how much control you have over your own work. If your contracted telehealth company exerts a large amount of control over your work including when and how you do your job, you may be a misclassified telehealth contractor.

What are the Top 5 Signs that You’re a Misclassified Telehealth Contractor?

While the legal determination of whether or you have been misclassified as a contractor depends on a long list of factors examined together, there are a few telltale signs that you have been incorrectly labelled as a 1099 virtual physician. This includes:

1. Being Required to Adhere to a Fixed Daily or Weekly Schedule

The most common form of employer control over the work of employees is scheduling. If your contracted telehealth company dictates your hours, even if based on an availability schedule that you submitted, you may have been misclassified as an independent contractor.

2. Productivity Standards Dictating How Long You Spend on Consultations or Follow-up Care

Beyond your hours or the “when” of your work, employment is also defined by your would-be employer dictating the “how” of your work. In the telehealth industry, this can mean providers placing strict productivity standards on their 1099 physicians, nurse practitioners, or therapists that regulate the length of time that can be spent on both patient consultations and follow-up appointments.

3. Restrictions Being Placed on Your Vacation Time or Time Away from the Virtual Office

Another way that telehealth providers exert employment-level control over the “when” of their 1099 healthcare workers is limiting or restricting your decision-making surrounding vacation time or time away from work. If your associated telehealth company has firm restrictions that limit when and how much you may be allocated towards time away from work it could be a dead giveaway that you are a misclassified telehealth contractor.

4. Required Attendance at Regular Company Meetings

Beyond controlling the “when” of your work, mandatory company meetings can also demonstrate that you are an integral part of the telehealth firm’s business. This is another important distinction when determining whether or not a misclassification has occurred and could mean that you are performing the additional duties of an employee while being deprived of the benefits.

5. Being Expected to Respond to Requests Within Short Timeframes

Another factor commonly seen in misclassified telehealth contractors is the telehealth firm expecting quick turnaround time when it comes to responding to requests. If you were truly an independent contractor, the timeline of your interactions with the firm would function more based on your ability to respond rather than the needs of the firm. If your firm expects you to respond to requests quickly irrespective of any other work you could be committed to at that time, this could be a sign that your firm views you as a full-time employee as well as an integral part of their business operations.

While other signs of 1099 misclassification exist within the telehealth industry, these five are both the most common and the most indicative.

What are the Consequences of Misclassification?

Misclassifying employees as 1099 contractors, whether in telehealth or any other industry, violates both state and federal law. Misclassified telehealth contractors can lose out on:

• Overtime pay under the Fair Labor Standards Act (FLSA) (for those not exempt under FLSA’s professional exemption) and state law
• Employer-paid payroll taxes (Social Security, Medicare)
• Health insurance, retirement plans, and other benefits
• Protected leave under the Family and Medical Leave Act (FMLA)
• Unemployment insurance and workers’ compensation coverage
• Legal protections under anti-discrimination and whistleblower laws

Additionally, telehealth firms that engage in employee misclassification can face criminal or civil penalties including class or collective actions.

How Does Miller Shah LLP Help Misclassified Telehealth Contractors Understand and Assert Their Rights?

Miller Shah is committed to ensuring that telehealth workers are properly classified and receiving any and all benefits they are entitled to under the law. As part of this commitment, Miller Shah actively investigates telemedicine companies that misclassify physicians, nurse practitioners, or therapists as 1099 contractors as part of our broader practice in misclassification claims.

If you were misclassified as a 1099 physician while working in telehealth, you may be entitled to compensation, additional benefits, and legal protection. If you believe this was the case, please fill out the form below. Beyond these listed benefits, your case could help prevent others from experiencing similar misclassification.