1099, 1099, 1099 And w2 just not the same

Here we have the classic problem of people stating that they are locum and they are not.  Wait, what do you mean I’m not locum?  Let’s look at some examples and define locum.  

Broadly defined a Locum CRNA is on that is in place of another CRNA.  This means that the individual is covering for a CRNA on vacation, sick leave, maternity leave, or the full time FTE has quit and they have not hired for that position.   This means we are covering for an exact and defined position.   

I’m 1099 and take a full time salary in one place with a contract for 42 weeks a year at one facility with the expectation that this contract is indefinite for years.  This is a 1099 provider that has a job.  Generally, speaking the IRS would frown on this and state that 1099 is not necessarily the best way to report your income and the employer could receive fines stating that you should be w2.  Under the definitions of 1099 the independent contractor chooses when he or she works, where, & determines the best way in which the job is to be performed.  This is technically true but if you look at past precedent you would also find that the IRS has asked for other 1099 to prove that the contractor is choosing contracts at more than one place and is not based in one long term should be w-2 job. 

im 1099 and I go to 4 hospitals in my area.  They pay me a different rate based on what they pay a daily worker and it’s higher than the w-2 rate.  I must be a locum right? Not exactly,  if you are staying in one area and u are filling in days you are very likely Per Diem.  Per Diem is Latin for daily. A per Diem individual can be used because the hospital or group doesn’t need a full time or specifically a part time person but a gap exist so a per Diem individual can come in a full the day.  This person typically has a w-2 job but wants to pick up a Day here or there.  Since they have a job they don’t need “benefits”. Thus they receive 1099 pay.  The problem is here that the individual has healthcare, PTO, disability, malpractice and retirement etc so doesn’t calculate or pay those out of 1099 pay.  The group may pay w-2 at 85$/hour and offer a 1099 person per Diem 105-110/hr.  Sounds awesome because we know every 5$ on a full time basis is $10,000 annually.  The problem is you didn’t calculate based on a locum calculation and you have undercut even your w-2 counterparts pay and become cheaper labor than even the regular full time folks.

I am a full-time 1099 traveling locum CRNA.  I have gone to long term hospitals and short term.  I filled in for the group that had a changeover of management. Then I filled in for a girl on maternity leave, and then I did vacation relief for a group over the summer.  This person only has 1099 income, goes to more than one location and may plan a couple months at a time or fills urgent short term needs in critical access facilities.  This person travels to wherever the need is.  We pick-up life wherever that need is for the duration of the need from 7 days to a month at a time.  This is rarely if ever shorter than a week.  We calculate our 1099 pay based on the necessity, cost of housing, food, gas, regional entertainment or lack there off, health disability and life insurance, time off needed in the year, and travel to and from assignments.  We factor in time away from family or if a spouse can’t work because we travel. Our rates should never undrcut a w-2 worker even the rate we work for from an agency.   Our rates shouldn’t be below $140 all inclusive per hour and should in areas of the country be as high as 180-200$/hR.  We have to be business astute and undestand taxes, business, retirement and finance.   

The W2 worker has a job that is not expected to leave.  They receive benefits and stability.  They accept a pay rate lower than all the 1099 positions as they don’t need to worry on taxes, retirement benefits, and vacation.  Most places cover malpractice and even disability insurance.  Because the group provides all this the pay is typically matched to the area and to the lowest denominator that will keep and retain a percentage of staff at the hospital and is generally calculable.   

These are literally just my thoughts and opinions on the description of each and are not intended to be all inclusive of every situation. 

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