What do you need to consider when making a decision to take on an independent contract with an organisation, clinical private practice or third-party organisation such as an employee assistance provider (EAP) or employment agency?
Clinicians have described independent contract work as freeing, frustrating and/or sometimes confusing when it comes to knowing about contracts, expectations, obligations, options and/or rights. The following tips come from the lived experience of independent contractors I have supervised in private practice, managed as a coordinator of a group program for Defence veterans or from my own contract work experiences.
1. Signing the Contract
The contract is a commercial legally binding agreement and should be iron-clad. It is essential that you understand and agree to the conditions of the contract so read the fine print before signing to avoid potential arguments later on. Any disputes will likely come back to what’s in the contract so be clear about what conditions are important to you. If there’s anything unclear, consider professional consultation with a lawyer, accountant or business advisor.
- Termination: What is your notice period?Can you take your clients with you or not when you leave? What are the restrictions, if any, on establishing a new practice e.g. within a period of time or by location? Can you take on permanent employment and exit the contract without penalty if you are working for a third- party agency?
- Hours of work: Are you expected to be available within set hours of the day? Will you be expected to be onsite if there are no referrals?
- Contract period: What is the start and end period for the contract (3 months, 6 months, 18 months, ongoing etc.) and does this suit your long-term career and financial plans.
- Pay rates: What is your take home hourly rate? Is it equitable with other contractors and other professions? And how often your invoice will be paid?
- Other Benefits: Determine whether clinical supervision, orientation and professional development is included.
- Client referral Process: How are client referrals made? Will you have a regular referred client base? Is the referral process clear and equitable? How much choice do you have in client referral/allocation?
- Risk Processes: Does the organisation take legal and other responsibility for risk? How do you report risk in case recording? Who would you escalate risk to?
- File Notes: Who do the case file notes belong to? What happens if a case goes to court? Will the organisation audit your case notes?
2. Team Inclusion
It can be professionally isolating working as an independent contractor, whether working in your own clinic rooms or coming and going from an organisation. Independent contractors may not be included in team meetings, supervision sessions or informal peer supervision and may be required to organise their own clinical supervision and support in their own time and at their own expense. Other organisations are more inclusive in some areas e.g. team social events. It may be worth asking organisations about how you might work with or feel part of the team.
As a contractor in a private practice business, there may be opportunities for you to meet with other contractors socially, in peer supervision or in other activities arranged by the practice owner such as training or group supervision. Or you can do what I did and also set up your own monthly peer supervision lunch with a colleague or two.
3. Skills Development
Consider non-financial benefits in an agreement such as access to in-house or external clinical supervision and professional development training, or annual contractor conferences. As well as providing an opportunity for clinicians to maintain and develop professional skills, continuing professional development is an annual requirement for the APS, AASW and AASW mental health accreditation.
4. Orientation and Training
A good orientation to a workplace, including specialised training in working with their client group is useful. Determine what the organisation offers to get you started in this work, especially if you are new to this particular field of practice. Also ask whether orientation and training are offered without payment in your own time or as part of your paid contract work. It is not always clear and can be awkward waiting to find out afterwards whether you were supposed to invoice for your time, or not.
5. A Point of Contact
Independent contractors may only be present in an organisation for a few days or hours a week, or not at all. As a contractor, you may have limited visibility within an organisation. Good communication with one contact person such as a team leader or private practice owner is particularly important for work allocation, clarifying work tasks, feedback, agency updates, and support/consultation/debriefing around complex clients and risk escalation. Some organisations may offer a regular scheduled check-in. It’s a nice way of saying ‘we know you are here, we value your work and know what you are doing’, but the reality is, you may need to ask for it.
6. Feedback and Review
Regular formal or informal two-way feedback and review is useful to share successes in the contract work, discuss potential contracting issues, and for organisations to keep contractors up to date with organisational developments that affect your contract work. You may need to negotiate this as in busy organisations, independent contractors, by nature of the external role, can be left to your own devices unless there’s an issue.
7. Manage the Administrative Load
It is important to establish clear expectations about administrative tasks in the contract, and monitor this to avoid ‘project-creep’. Administration can take up a significant part of a contractor’s work week, with case noting, report writing, invoicing and marketing. On top of this, some organisations/private practices may expect you to carry out other administrative tasks for example, booking client appointments, booking interpreters, and administrative reporting in organisation internal recording systems. Be clear upfront what administrative load you are able and willing to take on under your fee agreement, negotiate accordingly and make sure it’s in the contract.
8. Manage Your Financials
Independent contractors are responsible for managing their own taxes, superannuation, and other financial obligations. Consulting an accountant or financial advisor can help you set up systems to track income, expenses, and ensure you’re compliant with tax obligations.
Independent contractors may establish their own fee. Consider the current APS and AASW fee schedules for a guide. Check that the social work rate is commensurate with other clinical professionals performing the same role in an organisation.
Rates should take into account the casual nature of contract work, lack of work guarantee and travel time. Also build in for leave, superannuation, accountancy fees, insurances, room rental, vehicle costs, mobile phone costs, professional membership and professional development. Taking off 30% to the contract fee is a good rule of thumb to work out your ‘real’ hourly rate.
To work out your take home rate refer to the Pay Calculator. www.paycalculator.com.au
GST is payable over a particular income. At the time of writing, counselling is GST free, but supervision is not. The ATO website provides up to date information on GST. www.ato.gov.au
9. Set up a Reliable Payment Process
Payment delays can be frustrating and costly. Make sure your contract or invoice specifies how and when you’ll be paid. Most accounts teams are reliable, but a few are not, and chasing late payments can take valuable time. Clarifying payment procedures upfront will save you headaches later on.
10. Build Your Brand
As an independent contractor, you’re in control of your professional brand and business, whether you are signed to an organisation or private practice. This can be both empowering and daunting. It’s essential to invest in marketing, networking, and maintaining your expertise in your field to attract a steady stream of clients or contractors.
As this blog offers general advice, it’s always a good idea to seek specific professional consultation from an accountant, lawyer, financial advisor, or HR professional to ensure that your contracting journey is as smooth and rewarding as possible. If you would like support in establishing your new business, contact me for business coaching.
In the next blog in the series, we will look at how to be successful in your contracting role.
Wishing you success in your contracting career!
About Melinda Austen
Melinda Austen is a clinical supervisor and workplace and leadership coach with over three decades of clinical experience working with refugees, asylum seekers, Defence veterans, Police and couples. She now helps the helpers. Melinda supports colleagues, including social workers, clinicians and other professionals such as lawyers and allied health who work with vulnerable clients. In her supervision and workplace coaching practice at person2person Consulting, she is driven by a desire to help people foster healthy, productive teams and thrive in their work. www.person2personconsulting.com