Counseling Internship: Ethical to be paid as a 1099 contractor employee?

Q: I just found out that my private practice supervisor is going to pay me per 1099; however, on the FAQ for PCCI Interns it states that that is not allowed, only via W-2. Can my supervisor convert me from 1099 to W-2 ASAP? What might prevent him from doing so? Yikes, I am nervous; I already have buit 6 clients. If this is not possible, would I just have to change my status to volunteer? Why does BBS enforce such totalitarian control? It states in new SEC. 39.SEC. 46. Section 4999.46.3 is added to the Business and Professions Code.
Please advise.

-Jessica

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A: Hi Jessica,

Thanks for your question. I’ll break it down and try to answer each part.

I just found out that my private practice supervisor is going to pay me per 1099. However, on the FAQ for PCCI Interns it states that that is not allowed, only via W-2. Can my supervisor convert me from 1099 to W-2 ASAP? What might prevent him from doing so?

Your supervisor can convert you from a 1099 independent contractor to a W-2 employee. For most businesses, this is a relatively simple and easy conversion.

What might prevent your supervisor from being willing to do this is, if he/she doesn’t have any other employees, or doesn’t really have a business established beyond a solo counseling practice, is that he/she would need to setup payroll. With this, he/she would need to calculate things like social security withholding, workman’s comp (possibly), and all the taxes and stuff that come out of a normal W2 employee’s paycheck. Also, depending on your area, he/she might need to provide a certain amount of PTO or sick time, or cover things like Jury Duty. At a minimum, your supervisor would need to pay 7.65% of your compensation in payroll tax (as a contractor you’re responsible for paying all 14% on your own, come tax time).

Yikes, I am nervous; I already have buit 6 clients. If this is not possible, would I just have to change my status to volunteer?

That’s an important question for your governing licensure board. It might be that you’re in the clear, meaning that you’re doing nothing wrong so you’re safe in the eyes of the board—but your supervisor is in violation. I’m not sure.
Why does BBS enforce such totalitarian control? It states in new SEC. 39.SEC. 46. Section 4999.46.3 is added to the Business and Professions Code.

I can’t answer that definitely, but I can make a guess. As an independent contractor, you technically work for yourself. You technically answer to no one, and technically nobody can tell you how to run your business or how to do your work. As the board wants you to be under
supervision—because you’re a new provider—they don’t want you working for yourself. They want you in a structured environment, with lots of oversight. The ACA (American Counseling Association) goes as far as to discouraging (but not prohibiting) counselors who are in their residency from working in a private practice environment, even as employees. Again, because they want a very structured environment with lots of safety nets for new providers.

Update: according to Dean Porter, the Executive Director of The California Association for Licensed Professional Clinical Counselors (CALPCC), “CA law is very specific about interns being employees or volunteers. Their hours will not count if they cannot produce a W-2 or a letter specifying that they are a volunteer.” – I’d say that settles the issues of how the CA board is likely to handle the issue as it relates to the intern.

I hope this helps Jessica!

–Dr Anthony Centore