The Bottom Line on Bottom Lines: What New Dental Associates Need To Know About Compensation Structures

May 16, 2023

Every spring, thousands of newly minted dentists leave behind their academic pursuits and venture out into the job market, looking for their first position in their chosen profession. There are many things to consider when evaluating potential opportunities – the role and responsibilities, opportunities for advancement, and personal or cultural fit, among other factors. But the bottom line for new dental associates often comes down to the actual bottom line – how and how much they will receive in compensation.

 

Compensation structures for dental associates come in many forms, most of which are more complicated – and less consistent – than a straight salary. Whether you are venturing out into the real world of dentistry for the first time or are looking for greener pastures, it is essential that you understand the common types of compensation packages in the industry, how they work, and their potential risks and rewards. Only then can you make an informed decision that will significantly impact your career trajectory and bank account.

 

Here are five associate dentist compensation structures you may encounter as you receive the multiple job offers a talented new professional like you will inevitably receive:

 

1.  Salary-Based Compensation

 

Simplicity and consistency are the two main benefits of a salary-based compensation structure. You receive a fixed salary at an annual or monthly rate based on a full-time work schedule. Salary increases may be tied to performance metrics or other factors, and the salary may be accompanied by potential bonuses or profit-sharing/equity ownership opportunities. A salary-based structure is a good fit if you value a steady paycheck more than compensation that can fluctuate based on your performance or that of the practice.

 

2.  Production-Based Compensation

 

If you are the type of person who will happily put in long hours and give maximum effort to your work, tying your compensation to your high-performing nature may be a smart move. Production-based compensation is based on the amount of work the associate dentist produces, such as the number of procedures performed or the billable fees generated from their services. The associate may receive a percentage of the billable fees generated from their work or a fixed amount per procedure. In either case, production-based compensation is adjusted for insurance discounts or other contractual payment arrangements. Compensation based on production is also generally paid at a slightly lower percentage than compensation based on collection, as the dentist has no exposure to collection issues and receives their compensation upon completion of the applicable procedure rather than upon collection from the patient.

 

3.  Collection-Based Compensation

 

Unlike a production-based compensation structure, a collection-based compensation structure is based on the amount of money actually collected from patients rather than billable fees generated in connection with the applicable treatment. Obviously, the amount of collections for an associate dentist’s work is largely a factor of how hard that dentist works, but it also depends on patients paying their bills. While this structure is attractive for practice owners – the amount of money going out depends on the amount coming in -tying compensation to something beyond your control is not without risk. Nevertheless, if you are willing to wait and bear that risk, the compensation is generally slightly higher than production-based compensation structures. In an insurance based practice, it is important to note that there may be an initial lag in receiving collection based compensation while the practice waits for insurance reimbursements. Many associate compensation structures will, therefore, include some minimum compensation during this ramp-up period to avoid the associate essentially working without being paid.

 

4.  Hourly-Based Compensation

 

This type of compensation structure is based on the number of hours worked by the associate dentist, and they are paid a fixed hourly rate. This type of compensation can be attractive to new associate dentists who are looking for a steady income while they gain experience and build their patient base. It’s also more common in certain dental specialties where cases tend to be longer term projects and thus compensation based on completion or collection would be impractical. In addition, where an office doesn’t have a full plate of overflow work, but rather is looking for the associate to grow a practice, an hourly arrangement can provide assurance that there is a minimum income available to carry the associate through the early leaner times.

 

5.  Hybrid Compensation

 

A hybrid compensation structure is just what the name implies: a combination of two or more compensation models, such as a salary plus production-based compensation, or a minimum daily fee plus a percentage of collection. This can be an attractive option if you want the stability of a fixed salary but also want to be rewarded for your productivity and hard work. Many offices hiring new associates offer a minimum daily fee while you get up and running that is reconciled periodically with a percentage of collection. This allows you to receive at least some minimal compensation while you build a practice or while you wait for insurance payments to come in.

 

Bonuses and Equity-Interest Opportunities

 

As noted, any base associate dentist compensation structure can be and usually is accompanied by other income-generating opportunities. These include performance-based bonuses, commissions, profit-sharing plans, and equity sharing and ownership. These can be significant sources of income and should be taken into consideration when evaluating compensation structures. But these additional sources of compensation can be complicated, especially those involving potential equity or ownership interest in a practice.

 

It is therefore important that you consult with an attorney who has experience with dental practice compensation packages before accepting any position or compensation plan. Doing so can help you maximize your income and make your first position in the profession as lucrative and rewarding as possible. 


We Focus on You So You Can Focus on Your Patients

 

At DDS Lawyers, we focus our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you.

 

Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation.

 

Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.  



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That's because these "testers" and the lawyers who represent them specifically target small businesses, as they typically have limited means to defend themselves, may not be able to discern between legitimate and bogus claims, and often see a quick payoff as the path of least resistance. Here’s how the shakedown typically goes down: A plaintiff or their attorney sends the practice a demand letter in which they claim that the practice’s website is inaccessible to people with disabilities (e.g., missing image alt text, inaccessible forms, incompatible with screen readers). They cite a violation of Title III of the ADA. They make a demand for a cash settlement, often ranging from $2,500 to $25,000, alongside a request for accessibility fixes. The business/practice cuts a check in exchange for a release of any ADA claims by that plaintiff related to the website. 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Different Responses to Different Types of ICE Actions Historically, ICE has conducted three types of workplace actions: I-9 audits (Notice of Inspection or “NOI”), which are administrative reviews of employment eligibility verification forms; worksite enforcement operations, which may include arrests; and searches pursuant to a warrant. Unfortunately, these customary practices have recently expanded to include warrantless, legally unauthorized, and sometimes violent entry into workplaces. The type of action the agency takes determines your obligations and your rights. An I-9 audit begins with a formal notice, typically giving you three business days to produce your I-9 forms and supporting documentation. A worksite enforcement operation or raid, however, often comes without warning. Understanding which situation you're facing is the critical first step. When ICE Arrives Without Notice – Keep Calm, Call Your Lawyer, and Ask For Authority If ICE agents appear at your workplace without prior notice, remain calm and follow these essential steps: · Keep calm , and don’t make any quick or impulsive decisions. Politely ask the agents to wait while you contact your attorney. You are not required to let agents enter non-public areas of your workplace without proper legal authority. While agents can enter your reception area or other common spaces as any member of the public could, they cannot access private areas such as treatment rooms, back offices, lunchrooms, or labs without your consent, a valid warrant, or an emergency. · Ask to see credentials and any warrants or legal documents. Scrutinize these thoroughly and understand this crucial distinction: an administrative warrant (Form I-200 or I-205) is not the same as a judicial warrant signed by a judge. Administrative warrants alone do not give ICE the authority to enter your private property or detain individuals. A judicial warrant, however, must be honored, though you should still speak with your lawyer who can help verify that it's properly signed, dated, and identifies the correct location and individuals. · Designate a single point of contact , ideally yourself as practice owner or an office manager, to communicate with the agents. Instruct other employees not to answer questions or provide information without guidance. This prevents confusion and minimizes the chances of miscommunication or escalation. Understanding Your Rights Employers have constitutional rights that apply during ICE encounters. The Fourth Amendment protects against unreasonable searches and seizures. As noted, without a judicial warrant or your consent, ICE generally cannot enter private areas of your practice, search filing cabinets or computer systems, or detain employees based solely on their immigration status. You have the right to refuse consent to a search. Exercise that right. If agents don't have a warrant, you can politely but firmly state: "I do not consent to a search of the premises. If you have a warrant signed by a judge, I would like to see it and have my attorney review it." If they have a warrant, verify it carefully to check that the address is correct, the signature is from a federal judge (not an ICE officer), and it's dated recently. Despite the recent rhetoric and actions of ICE agents and officials, you have an absolute right to observe, record, video, and document what's happening and what the agents are doing, so long as you do not interfere with or impede their operations. If ICE does enter your practice, you or your designated representative has the right to, and should, accompany agents to witness their actions. Protecting Your Employees Your employees also have rights, regardless of their immigration status. They have the right to remain silent and do not have to answer questions about their immigration status, where they were born, or how they entered the country. They have the right to refuse to show documents beyond what's necessary to demonstrate identity, unless they're under arrest. They should not lie or present false documents, as this can create additional legal problems. Before an ICE visit occurs, consider holding a "know your rights" training for employees. Inform them that if ICE arrives, they should remain calm, not run, and not present false documents. Provide them with a card that includes information about their rights and the contact information for your practice's attorney. You should never lie to federal agents or provide false information. However, you are not required to volunteer information or answer questions beyond what's legally necessary. If asked about specific employees, you can politely decline to answer and refer agents to your attorney. Once ICE agents leave, immediately document everything that occurred and save any videos or recordings so you can send them to your attorney. Preparing Before ICE Arrives The best time to prepare for an ICE visit is before it happens. Consider the following proactive steps: · Develop a written policy for your practice that designates who will handle ICE encounters, what steps to take, and how to contact your attorney. · Conduct an internal I-9 audit to identify and correct any paperwork errors or gaps. · Train office managers and supervisors on the protocol. Everyone should know not to consent to searches, not to answer questions without guidance, and to remain professional and calm. Post "know your rights" information for employees in common areas. If you have any questions or concerns regarding ICE or immigration enforcement activities at your practice, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Show More