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You've got your first dental employment contract. Now what?

June 27, 2022
New dental grads: here's what to look for and how to proceed when reviewing your first employment contract.

You've finished dental school, possibly a year (or six!) of postgraduate training, decided where you’d like to practice, done countless interviews, and now, finally, you have your first contract. Before you sign on the dotted line, make sure you take the time to read and understand what it is you’re agreeing to. More times than I can count, I have been asked by newer graduates what to look for and how to navigate issues that may come up before ever even starting a new job. Professional legal advice is always the way to go; there are state-specific rules and regulations that govern contracts, and a good employment attorney will help you navigate this. It is well worth the money.

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One of the most important distinctions to note on your contract is whether you will be classified as an employee or an independent contractor. Employees do not have to manage their own tax withholdings per paycheck, but contractors do. As an employee, you are protected by various laws and have access to file for unemployment. This was particularly important during the COVID-19 pandemic, as many dentists found themselves either unable to acquire jobs or out of work for months at a time. Remember that, as a contractor, you must put aside enough money to pay your own tax liabilities, and they can be very significant. This is also why it’s important to learn to manage your finances early—financial professionals can help plan for you.

Your contract will also lay out a compensation structure. Often, associate doctors will receive a daily guarantee, or minimum daily pay, which the employer will pay at the agreed-upon interval (biweekly, weekly, etc.) no matter what hours are worked or how much an associate produces or the office collects from patients. Some employers will also offer a percentage as pay. This may be in addition to a daily guarantee or may replace it entirely. This percentage is usually a piece of either your production or the office’s collection against your production. This is a significant piece of information. If the office that you choose to work at has billing policies that do not require patients to pay at the time of (or before) service, and you are paid on collections, you may not be paid for something you do this week for many weeks to come. This is also true for offices that participate with several third-party payers, or dental insurance companies. They may not pay you for a procedure until payment by the insurance company is received by the office. Payment on a percentage of production means there is no wait time, with the caveat that you may be doing lower-production, simpler procedures to start with, thus making your take-home salary lower. Percentages vary by state and by region, but in my experience, they are usually between 28%–35% of production or collection.

Remember: Everything is negotiable. Be optimistic and confident, offer constructive feedback, and you’ll do well.

Editor's note: This article appeared in the June 2022 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.

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