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Can I charge employees a portion of my overhead?

December 1, 2015

Question:

Jennifer,
My employees cost a lot.  Can I charge them a portion of my overhead if I pay them on a percentage basis? 

Dr. K
Answer:

Yes. You can take "expenses" or "overhead" out of a percentage compensation model (in addition to the amount already deducted from your portion as the employer - which I am assuming is the question - a "charge back").  The red flag I will raise is you want to be really specific in your contractual language (that's right, you need a contract) about what you can or cannot deduct.  Leaving ambiguity for questioning may (will likely) give rise to issues with your employees.  
If you want to allocate a portion of injectibles or actual supplies that are quantifiable towards the employee, BE SPECIFIC.  If you want to have a list agreed to in advance of certain services (implants, etc), BE SPECIFIC.   Also don't forget there are items that cannot be paid on percentage or billed back at a percentage - i.e., "referrals" or "designated health services".  

Another tip - a "charge back" system is not one you should insist your employees swallow after reading this email. Changing an employee's compensation structure could be tantamount to constructive termination. You would need to incentive or have definitive informed agreement to restructure.  

Be sure to work with counsel!  


 
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Have a question or comment for Jennifer?
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Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
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