Physician Employment Contract

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Physician Employment Contract

Brief Introduction About Physician Employment Contract

A physician employment contract is used by employers to hire physicians. The employer can be a hospital, a non-profit organization, or a private company. It details the conditions of work, such as working hours, the physician’s compensation and responsibilities, whether he is an employee or an independent contractor, and a course of action if the contract is violated. Similarly, physicians have licensed physician assistants who work under their supervision. They are engaged through a physician assistant employment contract.

Purpose of a Physician Employment Contract

The primary purpose of this contract is to prevent disputes between the physician and the employer. It clarifies all the terms of the arrangement and ensures there are no misunderstandings. Even if there are, the parties can refer to the contract to understand what they agreed to. It protects both parties from unnecessary legal troubles.

What to Look for in a Physician Employment Contract?

The following terms should be there in the contract:

  • Names of the parties
  • The objective of the contract
  • Nature of relationship-whether independent contractor or employee
  • Location
  • Term of the agreement
  • Responsibilities of the parties
  • Work timings
  • Grounds for termination
  • Compensation package
  • Additional benefits
  • Insurance cover
  • Promotion opportunities, if applicable
  • Outside activities
  • Compliance with laws and regulations
  • Restrictive covenants such as non-compete, non-solicit, and non-disclosure
  • Penalties for violation
  • Dispute settlement
  • Governing law
  • Signature of the parties

Physician Employment Contract Lawyer

Most physicians are versed in legal terms used in contracts. They need specialist lawyers to help them understand the implications of the contractual terms. Such lawyers provide physician employment contract review services. The laws vary through different states. Also, each specialty may have its own specific terms. These lawyers help a physician to understand all the terms that will affect his professional life. They also help in negotiating the contract.

How to Draft a Physician Employment Contract?

The following points should be kept in mind when drafting the contract:

  • It must clarify the nature of the relationship. If the physician is hired as an employee, then the employer will control how he performs his duties. He will be entitled to employee benefits. If he is hired as an independent contractor, he is free to work in his own way.
  • The location where the physician is required to render services must be mentioned. This term should also include if he will be required to go to some other location.
  • The timings, when the physician has to work, should be clear. This should also include arrangements about day/night and weekend calls. The manner of placing such calls should also be stated. It should not be a burden for the physician.
  • It must detail the circumstances under which the contract can be terminated. The requirement and time limit to serve a written notice must be mentioned. The time generally varies from thirty to ninety days.
  • Compensation: This is an important provision that must be worded clearly to avoid any misunderstanding. It must state the manner in which the physician’s compensation is being calculated. This includes his salary, bonuses, and periodic raise. Another aspect of compensation is the additional benefits that the employer may provide. These include perks such as cell phones, office facilities, and books.
  • Insurance: If the physician has to take liability insurance under the agreement, it should mention the conditions that should be covered. If the employer is offering health insurance to the physician, it must state the extent of coverage- whether only the physician is covered or his family members too.
  • If the physician is allowed to engage in activities outside the ones stated in the contract, they should be mentioned in detail. Activities that are prohibited may also be mentioned for additional clarity.
  • Compliance: If the program in which the physician has to work is a government healthcare program, the contract must comply with the relevant federal laws. Additionally, it must also follow all the necessary requirements under the state healthcare laws.
  • The governing law should mention which state’s law will be used to interpret the contract.

Negotiation Strategy

If you are a physician, then before heading into negotiations, you should research the employer- its practices, how it pays its physicians, and if there have been any malpractice claims against it. Once the discussions begin, you should be firm in keeping your point forward. When it comes to salary and benefits, you can compare the ones being offered to you to the industry standards and judge for yourself. You must understand your duties, schedule, and growth opportunities before signing the agreement. But you must also be flexible to the employer’s requirements and be willing to accept changes wherever necessary.

To understand the terms usually deployed by employers, you can refer to a physician employment contract sample. Similarly, a physician assistant can go through a physician assistant employment contract template.

Benefits and Drawbacks of Physician Employment Contract


  • It clarifies the terms of the arrangement and avoids disputes.
  • It minimizes legal risks by ensuring that all laws are complied with.
  • It allows employers to prescribe performance standards for physicians.
  • It protects both parties from violations by the other.


  • Often times, employers already have an employment contract in place. Physicians, especially new ones, cannot negotiate for better terms.
  • If not understood properly, the restrictive covenant can affect the physician’s prospects of practicing even after the agreement has ended.

What Happens in Case of Violation?

If the agreement is violated, the defaulting party can be penalized according to its terms. A well-drafted agreement will mention the penalties associated with violations(1) and what remedies are available. These can be sought in the local court of the state whose law governs the contract.

A physician employment contract is an important document that ensures that the employer and physicians work together efficiently. It also ensures that all federal and state laws(2) are followed. It is not a complicated document, but most employers prefer to have lawyers draft it. But you may refer to a pdf sample to get an idea about it.