D's widow filed application for survivor benefits for herself and her two children on the earnings record of her deceased husband, D, a physician. D had engaged in the private practice of medicine for many years and, in addition, had performed medical services for the X Corporation, a firm engaged in heavy industry, from January 1957 until his death in March 1961. Self-employment as a doctor of medicine is excluded from coverage under the Social Security Act. However, services performed by a physician as an employee are covered under the Act and the remuneration for such services is creditable for benefit purposes. The amount of the benefits payable to D's widow and children thus depends on whether D was an employee of the X Corporation with regard to the services he performed for it.
D's duties for the corporation consisted of performing routine employment and re-employment examination of employees, as well as examining and treating those company employees in need of medical attention, including surgery needed as the result of an industrial accident. He worked a regular 2-hour schedule each day, 6 days a week. D was required to adhere to this schedule and was not at liberty to respond to an emergency arising in his private practice during his working hours for the corporation. In addition, he was on call at any time in case of emergency at the corporation's plant. D performed his services on the corporation's premises and used equipment and facilities furnished by the corporation. He was paid a monthly salary for his services, was given written and oral instructions in conformity with company policies and procedures, and was also given instructions by the corporation's head physician, a full-time employee of the corporation. In the event of a difference of opinion between the two physicians, final decision and responsibility rested with the head physician. D was required to submit written reports to the corporation relative to employees' ailments or injuries, progress, and final recovery. He was required to perform services personally and could not engage assistants or arrange for a substitute for himself in event of his inability to carry out his duties. Both the corporation and D had the right to terminate the relationship at any time without either party incurring any liability for breach of contract. The corporation extended to D all of the rights and benefits enjoyed by its employees, such as pensions, vacations, and sick pay.
Under section 210(j)(2) of the Social Security Act, the term "employee" includes any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee. Whether an individual is an employee under such rules depends upon the facts in each case. The guides for determining whether an employer-employee relationship exists are found in Regulations No. 4, § 404.1004(c). Generally, such a relationship exists where the person for whom the services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which the result is accomplished.
Physicians who engage in the pursuit of an independent trade or business in which they offer their services to the public are generally independent contractors and not employees. However, if the requisite degree of control and supervision exists between a physician and another, he is an employee rather than an independent contractor with respect to any services performed under such circumstances. Whether the requisite control exists may be determined by the application of such factors as: (1) the degree to which he has become integrated into the operating organization of the person or firm for which the services are performed; (2) the substantial nature, regularity, and continuity of his work for such person or firm; (3) the authority vested in or reserved by such person or firm to require compliance with established general policies; and (4) the degree to which he has been accorded the rights and privileges which such person or firm has created or established for his employees generally. These factors are emphasized in determining what constitutes the requisite degree of control since it is often difficult for the person or firm for which the services are performed to supervise a physician in the performance of his services because of the high degree of skill required by a physician and because the methods by which he works are prescribed by the techniques and standards of his profession.
Generally, a physician engaged in the private practice of medicine who also examines and treats employees of a company on a part-time basis is not an employee of the company for social security purposes. See Willard Storage Battery Co. v. Carey, 103 F.Supp. 7 (a tax case), and Clithero v. Folsom (U.S.D.C. E.D. Mo. 1958) C.C.H., Unemp. Ins. Reports, vol. 1A Fed. para. 8425, (involving a claim for social security benefits). In those cases, direct control and supervision were not contemplated by the company as to the details and means by which the physicians accomplished their work, and they were free to leave the company's premises during working hours if an emergency case in their private practice required their presence.
The facts in this case are distinguishable from those present in the Willard and Clithero cases. Here D was integrated into the operating organization of the company; his services were of a substantial, regular, and continuous nature; contemplation of an employer-employee relationship is evidenced by the extension of employee benefits and privileges to him by the company; and he was subject to the supervision of the company's head physician, an acknowledged employee, as to the manner in which his services were to be performed.
Accordingly, it is held that D, with respect to the services he performed for the X Corporation on a part-time basis, was an employee of the corporation. Therefore, the wages he received from the X Corporation must be included in determining the entitlement of, and the amount of the benefits payable to, his widow and two children.
Back to Table of Contents