Why Ohio LPCs should be Employees

Buckle up, friends. This is a long one! Knowing the difference between 1099 independent contractors, and w2 employees, is important for any therapist, whether you own your own practice and are looking to expand into a group, or are working in someone else’s group practice.

Let’s first take a look at what is the difference between contractors and employees, and then in light of that take a look at why LPCs in Ohio should be classified as employees.

1099 Contractor vs w2 Employee: What’s the difference?

A federal distinction

The distinction between 1099 and employee is federal, not state, although some states have additional laws and regulations about it (EX: counselors in California are no longer allowed to be contractors and must be employees.) Think of it like marijuana - federally, it’s illegal, while some states have legalized the substance.

Employees have certain state and federal legal rights and protections. Contractors don’t have the same protections; however the tradeoff is that their legal right is freedom from restriction on when, where, how, with whom, they work.

Who’s controlling the work?

The IRS has a 20-factor test it uses to determine whether workers are, or should be, classified as employees or independent contractors. All of it boils down to who controls the work that’s being done. And all of that hinges on the contractor being able to perform the work completely independently (read: without supervision).

From the IRS website: “Facts that provide evidence of the degree of control and independence fall into three categories:

  1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

  2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

  3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?”

Misclassification has consequences

Having misclassified workers is a really big deal. If you’re looking to expand your practice, it’s crucial to understand the difference between contractors and employees so that you can operate legally and ethically. Employers who get this wrong can have significant financial consequences which may include fines, fees, and backpaying taxes and other benefits for each of your misclassified workers.

Being a misclassified worker is also a really big deal. If you’re misclassified, you’re denied legal rights and protections.

I’ve seen SO MANY group practices in my area doing this wrong. It’s really disheartening. Most of the time, I think it’s unintentional rather than malicious. Therapists tend to repeat what they’ve seen done at other practices, and don’t give too much thought to the business structure behind the scenes. However, it’s well worth the cost to invest in legal counsel and business coaching when expanding from solo to group practice to ensure your business structure is set up appropriately from the start.

Keeping yourself in check: The “Plumber Test”

One analogy I use with all of my private practice coaching clients when discussing employee vs. contractors is to think of a plumber. If your toilet in your house breaks, you need to hire a plumber to come in and fix it. You yourself are not a plumber; you don’t have the skills or tools required for the job. The toilet and pipes are all located on your property, you aren’t bringing it to them to fix; they have to come to your house and do the work for you.

This plumber is a contractor! You are contracting them to do the work you need, they bring all the tools they need to your house, they pay for extra supplies if needed and invoice you afterwards, and they are free to leave afterwards to go to other houses and repair other toilets. You let them into your house, show them what needs fixing, and leave them to their work, with confidence that they’ll do the job you’re paying them to do. They fully know how to do it because, they are a plumber and have lots of experience repairing other toilets. They do a great job, you inspect it afterwards and pay them for their time and experience.

Think of all the things you DON’T do when your plumber is there. You don’t hover over your plumber and critique their work along the way, suggest they use a different wrench or try a different drain unclogging technique. You don’t forbid them from advertising in your neighborhood or working at your neighbor’s house next week. You don’t require your plumber to attend weekly staff meetings, a holiday party, or take a training; you don’t dictate their rates or what they charge or limit where else they can work; you don’t have any say in how, where, and when they market themselves, how many jobs they take on, or how they conduct themselves at another customer’s home.

This is how true contract work should be. Even with therapists! The same IRS 20-factor test that determines that your plumber is a contract worker would be used to explore if your therapist is appropriately classified. In short, my “plumber test” is this: If it would be weird or unreasonable to ask your plumber to do something, or provide something for them, you shouldn’t do it with a contracted therapist.

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Why Ohio LPCs should be w2 employees, not 1099 independent contractors

What are 1099 workers?

Note that I said “1099 workers” not “1099 employees.” It bugs me when people say “1099 employees” because… this is not a thing. If someone’s using that phrase, they’re misinformed. A “1099 employee” simply doesn’t exist. It’s like saying “catdog.” There are cats, and there are dogs. Each make great housepets depending on your personality and living situation. However, a catdog is not a real animal. Similarly - there are employees, and there are contractors. There are not “contracted employees.”

When someone is a 1099 therapist, it means that they contract their work or services to other businesses, just like in our plumber example. They are self-employed therapists and are not considered an "employee" of the practice(s) they work for. Ideally 1099 therapists have their own legal business structure, such as an LLC, set up, because again - they’re self-employed. They are legally and skillfully able to work 100% independently.

Independent therapists/contractors decide where, when, how, and with whom, they work. They set their own hours and choose when they want to take a vacation and how often they want to be out of the office. Because they are self-employed, a 1099 therapist will be responsible for paying 100% of their own income taxes, self-employment taxes, and technically should be responsible for covering the cost of any materials needed to do their work, and bringing with them any necessary materials.

The Ohio LPC is a dependent license

The crux of being an independent contractor is the ability to do your work independently - hence, INDEPENDENT contractor. If you need supervision to do your work, you are unable to work independently, per the IRS guidelines.

In Ohio, the LPC (licensed professional counselor) is a dependent license. Other states have different licenses and LPCs in other states may have different scopes of practice. I’m specifically speaking about Ohio LPCs.

Ohio CSWMFT law requires that LPCs practice under supervision

What does it mean to be dependently licensed? In order to practice as an LPC (“engaged in the diagnosis and treatment of mental and emotional disorders"), Ohio law requires that LPCs are under the training (clinical) supervision of an LPCC-S. Ohio LPCs are technically on their supervisor’s license.

That’s it, that’s the main argument. This isn’t rocket science. An LPC is NOT able to practice independently in Ohio. They are therefore not able under federal IRS guidelines to work at a group practice as an independent contractor, because they’re not independent.

Think you might be misclassified? You aren’t alone!

More support for therapists

Personally, this is so important to me because I was formerly a misclassified worker as a brand new LPC at someone else’s group practice. It was the worst professional experience of my life. Thankfully, because I understood the differences between contract work and employment, I stood up for myself and was able to navigate a change in my career.

I now love helping other therapists understand the differences between being a contractor and an employee. If you’re a therapist who’s concerned you may be misclassified, or a therapist looking to shift from solo to group practice, reach out to learn more about my private practice coaching and let’s talk about your situation.


Sea Glass Counseling and Consultation is an EMDR therapy practice in Dublin, Ohio. Our compassionate, skilled therapists use evidence-based techniques grounded in the neurobiology of stress, trauma, and relationships to make sure your treatment is personalized and effective. Sea Glass therapists provide telehealth counseling in Ohio for individuals and couples. We’re best known for providing Intensive EMDR therapy, anxiety treatment, and sex therapy for Christians. Interested in working together? Contact us today to get started with a Certified EMDR therapist in Ohio.