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Employee vs Contractor Canada and US

August 13, 2025 Comments Off on Employee vs Contractor Canada and US

A practical guide for the U.S. and Canada

The mouth is a neighborhood. Hygiene keeps the peace. When a practice brings in a temp, the work does not become less essential. It becomes more visible. That is why worker classification matters. Paychecks, taxes, benefits, liability, and sleep quality all sit on this call. Get it right and everyone breathes easier.

The short answer

Dental temps are never contractors. Not for a day. Not for an afternoon. Not “just this once.” If a clinic books a hygienist to step into its schedule, use its operatory, follow its protocols, and care for its patients, that hygienist belongs on payroll. Call it W-2 in the U.S. Call it employee in Canada. Either way, it is employment.

Why this matters

Classification decides how taxes get withheld, who funds social programs, and which protections apply. It also decides who gets a letter later with penalties attached. A temp shift feels casual. The law looks at control, tools, and integration. Temp work checks every employment box.

United States: W-2 vs. 1099 in plain English

How to think about it
If the practice sets the day, supplies the room and instruments, dictates the infection-control steps, and expects you personally to show up, you are an employee. W-2. The practice withholds taxes and pays its share of Social Security and Medicare. You get a W-2 at year end. Simple.

What about 1099?
A 1099 hygienist is a separate business. They set their own rates, bring key equipment, carry their own risk, and work for many clinics. That is not a temp booked into your column. That is a clinician running a company. It is rare in hygiene. It is not a workaround for payroll.

Can I pay a temp hygienist as a contractor?
No. If you control the work, the schedule, and the protocols, it is employment. Pay through payroll. Full stop.

How do taxes work for a temp hygienist?

  • As a temp employee (W-2): The practice handles withholding each paycheck. You file your return as usual.
  • As a truly independent hygienist outside the temp context: You file Schedule C and Schedule SE and make estimated payments. That is a different business model, not a day-rate temp shift.

Practice checklist

  • You pick the patients and times.
  • You supply the operatory, instruments, and disposables.
  • You require compliance with your charting and infection control.
  • You expect the person you booked, not a substitute.
    You just described an employee. Put them on payroll.

Canada: Employee or Self-Employed

How to think about it
Clinics direct the work, provide the space and gear, and integrate temps into the schedule. That points to employee status. Employers must withhold and remit CPP, EI, and income tax. Failure to do so invites a bill for both shares, plus penalties and interest. A temp shift is not a consulting engagement. It is a day of employment.

What about self-employed hygienists in Canada?
They exist, but they are not temps. They operate as businesses with multiple clients and real financial risk. If they cross the GST/HST small-supplier threshold, they register and charge tax. Again, different model. Not the same as a clinic plugging a hole in Tuesday’s column.

FAQs people actually Google

Are dental temps contractors?
No. Dental temps are never contractors. Treat them as employees.

Can I 1099 as a dental hygienist?
Only if you run a genuine independent business. That is not a temp arrangement. If a clinic books you into its day, you are W-2 there.

How do I do my taxes as a temp hygienist?
If you are a temp employee, they are withheld from each paycheck. If you truly operate as an independent hygienist outside temp work, you file business taxes. Different lane.

Can I pay a temp hygienist as a contractor for one day only?
No. Duration does not change status. One day of controlled work is still employment.

What happens if we get it wrong?
Back withholding, employer taxes, penalties, interest, and a lot of regret. Getting it right costs less.

For owners and managers

Think of classification as infection control for payroll. Do the right steps every time. Use payroll for temps. Save 1099 for true outside businesses. You will avoid letters you do not want and keep your team protected.

For hygienists

Ask how you are being paid before the shift. W-2 for temp work. If someone pushes 1099 for a slot in their schedule, that is a red flag. You deserve lawful pay and protections.

Penalties for misclassifying dental temps

Think of this like missing calculus in a root canal. You can finish the case, but the follow-up is going to ache. If a practice treats a temp hygienist as a contractor, here’s what the bill can look like.

United States

Wages and damages

  • Back wages for any missed overtime or minimum wage.
  • “Double” damages in lawsuits. Courts can award an equal amount in liquidated damages on top of the back wages. The DOL can’t seek liquidated damages in a pre-lawsuit settlement right now, but employees can in court.

Civil money penalties

  • For repeated or willful minimum-wage or overtime violations: a civil penalty per violation. For 2025, it’s $2,515 each.

Payroll taxes you should have withheld

  • Employer owes its full share of Social Security and Medicare.
  • Plus the employee share at special §3509 rates when workers were treated as contractors. If you filed the 1099s, the rough add-ons are 1.5% of wages for income-tax withholding and 20% of the employee FICA; if you didn’t file 1099s, those bump to 3% and 40%. Interest is added.

Information-return penalties

  • Missing or late 1099-NEC filings stack up fast. For 2025, it’s $60 to $330 per form depending on how late, or $660 per form for intentional disregard, caps apply.

Personal exposure in some cases

  • If taxes were withheld but not remitted, “responsible persons” can be personally liable for the the amount plus interest.

Canada

Source deductions you should have handled

  • If you failed to deduct CPP, EI, and income tax, the clinic can be assessed for both the employer and employee shares, plus interest. Penalties are typically 10% of the missed amounts, or 20% for repeat or gross-negligence cases in the same year.

Late remittance penalties

  • Additional penalties apply for late or deficient remittances of source deductions, with interest.

Late information returns

  • Late T4 information returns trigger a sliding penalty schedule. Minimum $100; up to $7,500 based on slip count and days late.

Administrative follow-ups

  • Expect a PIER review if CPP or EI was under-withheld. You’ll be asked to true-up both shares with interest.

This article is general information, not legal or tax advice. Talk to your accountant or attorney about your specific situation.

Sources for further reading