Clinical employment and independent contractor agreements in California must be structured with particular care. Compensation models, benefits, malpractice coverage, scheduling expectations, termination rights, and post-employment obligations are all frequent sources of conflict when terms are unclear or inconsistent with California law. Because California strongly protects wage rights and professional mobility, agreements must balance operational needs with enforceable, well-defined provisions.
The following overview explains the most common compensation structures used in clinical settings, outlines key benefit and insurance considerations, addresses scheduling and termination mechanics, and summarizes post-employment obligations that generally align with California law. A streamlined negotiation checklist for both clinicians and practices concludes the discussion.
Common Compensation Structures
Clinical compensation is most often structured as a daily or per-shift rate, a percentage of collections, or a tiered model combining guaranteed pay with performance incentives.
A daily or per-shift rate provides a fixed amount for each day or shift worked. This structure is frequently used for part-time positions, coverage roles, or environments with variable patient volume. Its primary advantage is predictability for both parties, as compensation is not dependent on billing or collection performance. To avoid disputes, agreements should clearly define the length of a shift, whether administrative duties are included, how call coverage is handled, and whether additional compensation applies for extended hours or procedures.
A percentage-of-collections model ties compensation to revenue actually collected for the clinician’s services. This approach can incentivize productivity but requires precise definitions. Agreements must address whether compensation is based on gross or net collections, how claims are attributed, when payments are made, and how refunds, recoupments, and write-offs are treated. In California, additional caution is required where collections-based compensation intersects with fee-splitting or corporate practice of medicine concerns, particularly when non-physician entities or management companies are involved.
Tiered compensation structures combine a base salary or guarantee with increasing percentages or bonuses tied to collections, encounters, or other metrics. These models are designed to provide income stability while rewarding growth. To function properly, the agreement should specify how tiers are calculated, the measurement period, reconciliation timing, and whether any caps apply. Ambiguity in tier thresholds or calculations often leads to payment disputes.
Benefits and Expense Reimbursement
Benefit provisions should be described with specificity rather than relying on generalized references to “standard benefits.” Agreements should clearly address health insurance contributions, retirement plan eligibility, paid time off categories, continuing education allowances, and responsibility for licensing and credentialing expenses.
Expense reimbursement is particularly significant in California. Depending on the circumstances, employers may be required to reimburse necessary business expenses. Agreements should therefore identify reimbursable expenses, approval requirements, and reimbursement timelines to reduce the risk of later disputes.
Malpractice Insurance Coverage
Malpractice insurance provisions determine how professional liability risk is allocated during and after the engagement. Agreements should specify whether coverage is provided on an occurrence or claims-made basis, the applicable policy limits, and any consent-to-settle rights. For claims-made policies, responsibility for tail coverage must be clearly allocated and coordinated with termination provisions to prevent gaps in coverage.
Scheduling and Workload Expectations
Scheduling terms define the day-to-day realities of the relationship. Agreements should outline expected clinical hours, administrative responsibilities, call obligations, and patient volume expectations. While practices may reserve some flexibility to adjust schedules, overly broad discretion can result in increased workload without corresponding compensation. Clear language regarding clinic locations, floating requirements, telehealth expectations, and notice of schedule changes helps manage expectations on both sides.
Termination Rights and Procedures
Most clinical agreements permit termination without cause upon advance notice, as well as immediate termination for defined causes such as loss of licensure or material breach. The notice period, duties during notice, and whether compensation continues if clinical duties are reduced should be clearly stated. Final compensation provisions should address outstanding salary, bonuses, collection reconciliations, and the timing of final payments to avoid post-termination disputes.
Post-Employment Obligations Under California Law
California generally prohibits contractual restraints on a clinician’s ability to practice after termination. Noncompete provisions are typically unenforceable, and overly broad non-solicitation clauses may also be problematic if they effectively restrict lawful practice. Post-employment obligations should instead focus on enforceable protections such as confidentiality, trade secret protection, return of property and records, and patient transition responsibilities. These provisions must be narrowly tailored to legitimate business interests.
Negotiation Checklist for Both Sides
For clinicians, negotiations should focus on understanding how compensation is calculated and paid, how collections are defined and reported when applicable, and how benefits, expense reimbursement, malpractice coverage, and tail obligations are handled. Scheduling expectations, termination notice requirements, final compensation timing, and post-employment restrictions should be reviewed carefully for consistency with California law and long-term career goals.
For practices, negotiations should prioritize selecting a compensation model aligned with operational capacity and compliance requirements, defining benefits and reimbursement obligations clearly, coordinating malpractice coverage with termination provisions, and drafting post-employment obligations that protect confidential information and continuity of care without relying on unenforceable restraints.
Clear, well-drafted agreements reduce ambiguity, improve compliance, and support sustainable professional relationships. In California’s regulated environment, careful attention to structure and enforceability is essential for both clinicians and practices.
How Leiva Law Firm Can Assist
Leiva Law Firm advises business owners facing information-access concerns, internal conflicts, and governance-related challenges. The firm supports clients in assessing viable resolution options, structuring negotiated exits or buyouts, and evaluating dissolution alternatives when ongoing operations are no longer sustainable. Its work is grounded in careful planning, clearly documented authority, and strategies intended to preserve enterprise value while safeguarding legal and contractual interests.
For additional information or to arrange a consultation with our business lawyer, Leiva Law Firm may be contacted at (818) 519-4465.
