This article is sponsored by Gale Healthcare Solutions. In this Voices Interview, Senior Housing News sits down with Kevin Guion, COO, Gale Healthcare Solutions, to talk about managing risk in the new platform-based staffing model. He breaks down the primary driver for the rapid adoption of platform staffing solutions and explains the key differences between the 1099 and W2 models. He also offers advice for senior care operators that are considering adopting a staffing platform so they can make the most informed decision for their organization.
Senior Housing News: What career experiences do you most draw from in your role today?
Kevin Guion: My professional journey afforded me the opportunity to lead teams in health care and in a number of other industries, in almost every aspect of a business, during some very transformative times. Through mergers, acquisitions, divestitures, restructurings, and exponential growth, this diverse background, provided many occasions to be a part of some great wins and some extraordinary challenges. I draw upon the insights and learnings from these experiences to craft strategies, lay out roadmaps, and guide teams across our organization.
For Gale, the challenges stem from navigating 8x growth over the past three years in an industry impacted by a pandemic and being transformed by a new way of doing business. Fortunately, I am with a team that has deep knowledge, industry expertise, passion, and commitment to succeed. As the COO, my background allows me to provide this talented team support by building unity and focus around a common plan, one that helps us advance our mission of ensuring that no person goes without care.
What is the primary driver for the rapid adoption of platform staffing solutions?
The health care industry has been challenged by the nursing shortage for years, and COVID only intensified that problem. Platforms offer an exponentially more efficient approach to meeting staffing demands, as the technology allows us to automate the matching of providers with available clinicians. It completely replaces the old-school manual process of calling and texting that is so limiting. During the pandemic, when the need for clinicians became so desperate, health care facilities quickly embraced platform solutions, highlighting the efficiency of technology in reaching clinicians.
Gale pioneered platform staffing when we launched in 2016, and as a sign of its transformational power, we’ve grown from a small firm serving clients in Tampa into a national leader serving health care providers across 40 states. As the nursing shortage persists, staffing platforms are far better equipped to help providers secure the staff they need. But it’s important for health care providers to know these platforms are not all the same.
What are the biggest differences in platform companies?
From a technology perspective, they function pretty similarly, using algorithms to efficiently match providers and nurses who are available to work in their communities. But a key difference is how the platform manages its clinician workforce. At Gale Healthcare, we hire all of our nursing staff as W2 employees, consistent with longstanding practice in health care. Some of the more recent entrants into the platform staffing market have elected a 1099 staffing model. Whether temporary nurses are 1099 or W2 has significant implications for both the clinician and the client facility.
From a clinician’s perspective, being classified as a 1099 contractor means that they are not considered an employee of the platform company. As a result, they are not entitled to certain benefits and protections that are typically provided to employees, such as overtime pay, health insurance options and worker’s compensation coverage.
In addition, clinicians in a 1099 relationship are responsible for paying the employer’s portion of payroll taxes. If not handled properly this tax responsibility can mean more than a big bill in April. It can result in fines and penalties and disqualifying clinicians for student loans, mortgages and other financial needs. As a whole, a 1099 relationship eliminates rights and protections that clinicians would otherwise have as employees.
From a health care facility’s perspective, engaging with a 1099 platform introduces significant and unnecessary legal and financial risk. When the Department of Labor (DOL) determines that clinicians have been misclassified as 1099 contractors, the facility can be held liable as a “joint employer.” This means that the facility may be held accountable for the unpaid taxes, overtime, unemployment benefits, injury coverage, and other employment-related benefits that should have been afforded to the clinicians as employees.
How exactly is it that a facility can be held responsible for a 1099 platform’s misclassification of a clinician?
There is abundant legal precedent for these determinations. In Pennsylvania, the DOL is currently suing a health care provider for $19 million for misclassifying workers.
The Fair Labor Standards Act provides certain tests for determining whether workers are employees or independent contractors. For example, a key test relates to control of the work being performed. Health care is a highly regulated industry, and temporary nurses working per diem shifts are working under the supervision of the facility. They are not performing their work independently.
Facilities found to have misclassified clinicians through the utilization of 1099 temporary staff may face significant financial and legal consequences. In the end, the facility has a regulatory responsibility to ensure every clinician working within their facility is properly classified and is provided relevant protections as an employee.
Of course, facilities that rely on W2 temporary clinicians can also face joint-employer claims. However, because these W2 platform companies, like Gale, are providing employee benefits, paying taxes, and ensuring proper DOL protections, the risk of any financial exposure is far, far less.
As the gig economy grows, more people are looking for flexible work options, and many are choosing 1099 jobs. How is this any different?
It’s true the gig economy is growing rapidly, and an independent contractor status is appropriate for many kinds of work – but not temporary nursing staff working alongside permanent employees on a per diem basis. As a highly regulated industry, clinicians in post-acute care are supervised, required to follow specific procedures and policies, and given direction on break times and sometimes even what to wear. This high degree of control strongly suggests an employer-employee relationship, favoring W2 classification.
Another factor is the financial investment made by the worker. Temporary nursing staff in post-acute settings are typically provided with all the necessary materials and equipment by the facility, indicating an employment relationship where the facility assumes financial responsibility.
While there may be exceptions where a 1099 relationship is appropriate, such as for specialized care, temporary nursing staff providing bedside care alongside permanent staff in post-acute settings generally align with an employment relationship, justifying the W2 classification.
What advice would you then give to a senior care community when evaluating platform options?
Embracing staffing platforms is vital for efficient staffing solutions in post-acute facilities. These platforms outperform traditional staffing agencies, streamlining the staffing process and ensuring better coverage.
Minimizing risk is crucial, and you can do so by selecting a platform that hires clinicians as W2 employees. This mitigates misclassification risks and reduces the chances of involvement in lawsuits. If you should choose a 1099 company, watch out for contract language that puts all the misclassification risk on your community.
Further, providers should be thoroughly investigating the fee structure to manage costs effectively. Some platforms may impose hidden fees for certain features or services. At Gale, we believe transparency in pricing that prevents unexpected costs is essential for building trust and a strong partnership.
We also believe strongly in building relationships. While technology is powerful and significant, we know the importance of having people you can be in touch with and work with, as needed. Access to reliable support beyond the contracting phase enhances the experience and success of utilizing a platform. At Gale, we are available 24×7, 365 days a year to ensure our partners have the support they need.
In a couple of words, finish this sentence: “In 2023, the senior living industry has been defined by…”
…staffing challenges and choices that could introduce or minimize risk.
Editor’s note: This interview has been edited for length and clarity.
GHS launched the senior care industry’s first staffing platform in 2016. With more than 65,000 clinicians across 40 states, Gale is now the platform of choice for thousands of senior housing communities nationwide. To learn how Gale can solve your temporary staffing challenges, reach out to [email protected].
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected].