Are Your Birth Center Independent Contractors Really Employees?

9 hours ago
6 min read

If your birth center relies on independent contractors for core clinical roles, especially birth assistants who work regular shifts and share call, you may be sitting on a misclassification problem. Under current federal and state rules, many birth center independent contractors may in fact meet the legal definition of employees.

Birth assistant preparing a water birth tub at a birth center

Below is a guide that speaks broadly to independent contractors in birth centers, with particular attention to birth assistants where misclassification most often shows up.

Note: This article is for informational purposes only and is not legal advice. Please consult an attorney for guidance on your specific situation.

How Birth Center Independent Contractors Are Classified Under Federal Law

Federal and state worker-classification rules continue to evolve. While the U.S. Department of Labor's 2024 Final Rule adopted a six-factor economic realities analysis, federal guidance is currently undergoing additional rulemaking. Regardless of federal changes, many states continue to apply their own, often stricter, tests. The IRS also applies its own common-law control test for federal tax purposes, meaning worker classification may differ depending on the law being applied.

The 2024 Final Rule adopted a six-factor economic realities analysis under the Fair Labor Standards Act (FLSA) to distinguish employees from independent contractors for minimum wage and overtime purposes. This framework applies nationally to most employers covered by the FLSA, including birth centers that meet revenue thresholds or engage in interstate commerce.

At the core, a worker is an independent contractor only if, as a matter of economic reality, they are in business for themselves; an employee is economically dependent on the employer for work. For many birth center independent contractors, particularly long‑term birth assistants, the facts lean toward economic dependence rather than independent business ownership.

It's important to recognize that no single worker-classification test applies in every situation. Federal wage-and-hour law, IRS tax rules, unemployment insurance laws, workers' compensation statutes, and state labor laws may each apply different legal standards. A worker who qualifies as an independent contractor under one framework may still be considered an employee under another. Birth centers should evaluate contractor relationships under every applicable law.

The Six‑Factor Economic Reality Test (Applied to Birth Centers)

Under the current rule, DOL and courts look at six non‑exclusive factors to decide if a worker is an independent contractor or an employee.

Opportunity for profit or loss based on managerial skill
True independent contractors can increase profit or suffer loss through decisions like setting their rates, accepting or rejecting clients and managing expenses. Birth assistants treated as birth center independent contractors who are simply scheduled for shifts at a fixed rate, with little control over pricing or business strategy, usually show employee‑type dependence.
Investments by the worker and the employer
Contractors typically invest in their own business infrastructure: equipment, marketing, administrative systems, etc. In many birth centers, “contractor” birth assistants rely on the center’s facility, EHR, supplies, charting systems, trainings and brand, which suggests employer investment outweighs the worker’s.
Degree of permanence of the relationship
Long‑term, indefinite relationships with recurring shifts and ongoing call coverage are hallmarks of employment, not project‑based contracting. These facts often weigh toward employee status under both federal and many state analyses.
Nature and degree of control
If the birth center controls schedules, clinical protocols, documentation standards and participation in drills and meetings, the relationship is more employee‑like. Independent contractors generally retain greater control over how they provide contracted services, subject to applicable professional standards, licensure requirements, patient safety obligations and contractual expectations.
Whether the work is integral to the business
Work that is central to the employer’s business weighs toward employee status. Attending births, assisting midwives, managing labor support and postpartum care are integral to a birth center’s service model, so birth assistants are performing essential, not incidental, work.
Skill and initiative
The test asks whether the worker uses their skills to build an independent business or mainly to serve one organization. Skilled birth assistants who do not market themselves, maintain a separate client base or run a distinct business entity are exercising skill as part of your staff, not as independent entrepreneurs.

No single factor is determinative; regulators look at the totality of the circumstances. But when birth center independent contractors are long‑term, centrally involved, scheduled by the birth center, subject to ongoing supervision and closely integrated into daily operations, the overall picture often points to employee status.

State Variances: ABC Tests and Stricter Standards

Even if you analyze birth center independent contractors under the federal economic reality test, you still need to consider state‑level rules, which can be stricter.

ABC tests (e.g., California, Massachusetts, New Jersey and others)

Many states use an ABC test where a worker is presumed an employee unless: A. They are free from the hiring entity’s control, B. Their work is outside the usual course of the company’s business and C. They are engaged in an independently established trade or business. For birth assistants attending births and providing hands‑on clinical support, factor B (outside the usual course of business) is often difficult to satisfy. Birth assistance is directly within the core of a birth center’s business.

Because many states now use some form of ABC or modified ABC test, birth centers should evaluate each contractor under the strictest applicable state standard.

Risks of Misclassifying Birth Center Independent Contractors

Misclassifying birth assistants and other clinical staff as independent contractors carries several categories of risk.

Wage and hour liability under the FLSA and state law
Misclassified workers can seek back pay for minimum wage, overtime and related wage violations over a multi‑year lookback period. For birth assistants who have worked long‑term in employee‑like patterns, this can mean significant exposure.
Tax, benefits and insurance exposure
Birth centers may be assessed for unpaid payroll taxes, unemployment contributions and workers’ compensation premiums, plus interest and penalties, if birth center independent contractors are found to be employees. Workers may also pursue the value of benefits they should have received as employees.
Regulatory audits and legal actions
A single complaint, injury or random audit can widen into a review of all independent contractors, especially when multiple birth assistants or midwives are classified that way. Class or collective actions are increasingly common when misclassification affects several clinicians in the same organization.

How Birth Centers Can Responsibly Respond

The goal isn’t to eliminate all birth center independent contractors; it’s to ensure that contractor status is reserved for genuinely independent business‑to‑business relationships and that birth assistants who function as core staff are classified appropriately.

Practical steps:

Audit roles against both federal and state tests
Review each independent contractor role (birth assistants, midwives, lactation consultants, educators) against the six federal factors and your state’s applicable test (ABC or common‑law control).
Reclassify “long-term contractors” into employee roles
Birth assistants who work ongoing hours, are integral to operations and rely on your center as their main source of income are prime candidates for conversion to per diem or part‑time employee status. This protects them with appropriate wage, benefit and liability structures and reduces your risk.
Reserve contractor status for truly independent businesses
Keep birth center independent contractors for well‑documented B2B relationships: third‑party educators, consultant midwives with their own practices or ancillary services that clearly operate as separate businesses with their own clients, branding and infrastructure.
Align contracts, policies and actual practice
Update written agreements, HR policies and clinical operations so they match how people actually work and align with both labor laws and accreditation standards. If your policies say birth assistants can reject work and set their own schedules, but in practice they can’t, regulators will look at reality, not paper.
Document your classification analysis and review it periodically
For each birth center independent contractor, document which test applies, how each factor or prong is satisfied and the rationale for your decision. Revisit annually or when roles change and involve legal counsel familiar with healthcare to stress‑test your conclusions.

Handled proactively, reclassification doesn’t have to undermine your midwifery‑led model. It can strengthen your foundation, protect birth assistants and midwives and keep the focus on safe, respectful, community‑based care. The cost of reviewing worker classifications proactively is almost always far lower than the cost of defending a misclassification claim after the fact.