Misclassified Telehealth Physicians

Yes, that risk can be higher. Smaller or mid-sized providers tend to utilize independent contractor models and may have less formal compliance frameworks in place, so there is a greater chance that physicians are misclassified while conducting work that qualifies as employment under the law.

While major platforms like Teladoc Health, Amwell, MDLIVE, Doctor On Demand, and Babylon Health each hold between 7% and 19% of the 2025 global telehealth market, an estimated 30–40% of the market is made up of “Other Providers.” Some examples of companies in this category are HealthTap, PlushCare, Sesame Care, and other telehealth startups.

Misclassification happens when a doctor is labeled as an independent contractor (1099) and is doing work that legally qualifies as being classified as an employee. This often includes situations where the telehealth business has control over the doctor’s work schedule, patient assignments, course of treatment, and charting processes. Federal and state law provide remedies to misclassified employees.

Telehealth employment laws consist of a mix of federal and state labor laws that apply to remote healthcare providers, such as doctors. They outline whether the doctor is deemed an employee or an independent contractor and the rights they are entitled to. The essential protections may include:

• Fair Labor Standards Act (FLSA): Ensures minimum wage and overtime compensation for qualifying employees.
• Family and Medical Leave Act (FMLA): Provides eligible employees with protected leave for family and medical reasons.
• Anti-discrimination and whistleblower legislation: Safeguard doctors against workplace retaliation and discrimination.
• State-specific tests for classification: Some states like California use the strict “ABC test” to classify individuals as independent contractors.

Telehealth businesses are required to abide by these regulations even when physicians work from home. If a business dictates when, how, and where a doctor works, they could legally be considered an employee—1099 status notwithstanding.

Businesses tend to categorize physicians as independent contractors to evade employment taxes, overtime, benefits, and other legal responsibilities. While this is cost-saving, it can be against federal and state labor laws.

It varies. Some doctors might be exempt under the Fair Labor Standards Act (FLSA), but numerous telehealth positions—particularly hourly shift work or administrative leadership—could be eligible for overtime protection. If you are uncertain, an employment lawyer can review your circumstances.

If you were misclassified, you may have the right to:

• Payment due for unpaid overtime and wages.
• Reimbursement of expenses (equipment, malpractice insurance)
• Employer-paid benefits and taxes
• Statutory damages and penalties
• Legal costs and interest

Yes, your legal classification is determined by the actual structure of your work rather than the stipulations outlined in your contract. Courts and agencies will examine the nature of your relationship with the company, focusing not solely on the documentation.

If many doctors at your telehealth business were misclassified, your situation may qualify for treatment as a class action or collective action under federal or state law. This could improve your chances of recovery and make things more efficient.