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Veterinary Practices: Employee Classification for Payroll (2026)
Employee classification in veterinary practices is two questions: whether DVMs and veterinary technicians are employees or contractors, and whether the employees are exempt from overtime. BEG runs veterinary practice payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
Employee or contractor: how veterinary practices get it wrong
Licensed veterinary technicians are named in Fact Sheet #17O as technicians who are not exempt from FLSA minimum wage and overtime because their occupation does not require an advanced specialized academic degree as a standard prerequisite for entry.
The IRS decides employee versus independent contractor status from evidence of control and independence in three categories: behavioral control, financial control and the type of relationship; no single factor controls, and the business should document the factors used.
Exempt or non-exempt
To be an exempt learned professional, an employee must be paid on a salary or fee basis at not less than the standard salary level and have a primary duty of work requiring advanced knowledge in a field of science or learning, which the fact sheet lists as including medicine and the biological sciences. Job titles do not determine exemption status.
The salary floor for the executive, administrative and professional exemptions is $684 a week, restored to the 2019 level after the 2024 rule was vacated. Veterinary technologists and technicians at the May 2025 national median of $47,380 a year clear that salary test, so the duties test decides.
What misclassification costs
Under the Affordable Care Act, an employer is an applicable large employer for a calendar year if it averaged at least 50 full-time employees, including full-time-equivalent employees, in the preceding calendar year; a full-time employee averages at least 30 hours of service per week or 130 hours per month. Applicable large employers must offer affordable minimum value coverage or potentially owe a payment, and must send information reports to employees and the IRS.
Reclassifying a contractor as an employee means back FICA at 15.3 percent split between the parties, back FUTA, penalties and interest, and often back overtime under the FLSA at time and one half for two or three years.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Licensed veterinary technicians are named in Fact Sheet #17O as technicians who are not exempt from FLSA minimum wage and overtime because their occupation does not require an advanced specialized academic degree as a standard prerequisite for entry. [DOL Fact Sheet #17O]
- The IRS decides employee versus independent contractor status from evidence of control and independence in three categories: behavioral control, financial control and the type of relationship; no single factor controls, and the business should document the factors used. [IRS: Independent contractor (self-employed) or employee?]
- To be an exempt learned professional, an employee must be paid on a salary or fee basis at not less than the standard salary level and have a primary duty of work requiring advanced knowledge in a field of science or learning, which the fact sheet lists as including medicine and the biological sciences. Job titles do not determine exemption status. [DOL Fact Sheet #17D]
- Under the Affordable Care Act, an employer is an applicable large employer for a calendar year if it averaged at least 50 full-time employees, including full-time-equivalent employees, in the preceding calendar year; a full-time employee averages at least 30 hours of service per week or 130 hours per month. Applicable large employers must offer affordable minimum value coverage or potentially owe a payment, and must send information reports to employees and the IRS. [IRS Employer shared responsibility provisions]
Read the full guide to the employee versus contractor test, and the rest of the veterinary practice payroll library.
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Frequently Asked Questions
Are DVMs in a veterinary practice employees or contractors?
Licensed veterinary technicians are named in Fact Sheet #17O as technicians who are not exempt from FLSA minimum wage and overtime because their occupation does not require an advanced specialized academic degree as a standard prerequisite for entry.
What does the second test look at?
The IRS decides employee versus independent contractor status from evidence of control and independence in three categories: behavioral control, financial control and the type of relationship; no single factor controls, and the business should document the factors used.
Which veterinary practice employees can be exempt from overtime?
To be an exempt learned professional, an employee must be paid on a salary or fee basis at not less than the standard salary level and have a primary duty of work requiring advanced knowledge in a field of science or learning, which the fact sheet lists as including medicine and the biological sciences. Job titles do not determine exemption status.
What does managed payroll cost for a veterinary practice?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Production-based DVM comp, vet tech certification pay tiers and multi-location group payroll are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Veterinary Practices. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: IRS: Independent Contractor or Employee
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