Doula Agency Contracts - To Sign or Not To Sign

Many of you may know me as the birth tub lady – and I am thrilled that you do! What you may not know is that before I had a warehouse full of waterbirth supplies, I earned an MBA and was a human resources manager and consultant. (Technically, I still am  - I do contract work for several businesses.) Working in the field with birth professionals, I meet doulas considering joining a doula agency but they often have questions about the contracts that they are being asked to sign. Maria frequently talks with doulas about their individual situations and since I share an office with her doula agency, she will often pick my brain about the terms of the agreements that she hears about from BEST and other doulas that reach out to her. In particular, we talk a lot about the line between independent contractor and employee.

As a disclaimer: I am not a lawyer and I encourage you to find your own legal counsel for specific advice about any contract that you are considering signing. If you have a local entrepreneur association (for example, we have the Dallas Entrepreneur Center and the Addison Treehouse that are local to us) or an office of the Small Business Administration, they can guide you toward an attorney who is familiar with small businesses and who will be delighted to help.

Independent Contractor vs. Employee

The line between employee and independent contractor can be grey and a quick Google search will show you just how hard it can be to distinguish between the two. Here are a few points that you might want to consider when determining if you are an independent contractor or an employee:

1. Independent contractors generally have the right to determine the work that they do and how the work gets done.

2. Independent contractors generally have financial control over their work. This means that you usually provide your own supplies and may have significant ongoing expenses for your business whether you are working or not. This also means that you have the freedom to off your services to others in the market. ICs often advertise, may have a separate business location, and are able to work in their market freely and without limitation. They do not generally sign non-competes.

3. Independent contractors are typically paid by the job, not by the hour. (In some professions, this is less common, such as a lawyer who does contract work for a client.) Hourly or salaried wages, even if they also have a commissioned component, are usually indicative of someone who is an employee.

4. Independent contractors usually work for a set period of time (not indefinitely) and do not have benefits of any type. 

So what does this look like in the real world? Let's pretend we ’re opening a bakery. We need a baker who comes in every day to make the everyday pastries, so we hire Lisa. We pay her an hourly wage, we expect her to be at work from 3:30a – 12:30p, and we provide her paid time off and the option to purchase health insurance. I think we would all agree that Lisa is an employee. She is performing a key function of the business, we expect her to come in to work indefinitely, and we tell her what to bake and how to bake it. Our employment agreement states that she is not able to work for another bakery at the same time.

One day, Lisa needs more chocolate chips, so she runs out to the grocery store to grab a few bags. She submits a receipt to us and is reimbursed for her expenses and paid for the time that she spent. Our bakery is a wild success, and we just got an order for a huge event!

Deepak, another baker who has a business in town, is our friend so we call him for help. He agrees to make the chocolate chip cookies that we need for this event for a set cost. Deepak also runs out of chocolate chips and has to run to the grocery store for them. Unfortunately, they are twice the price of his usual supplier, but because he is on contract to bake cookies for a set amount he has to pay the extra in order to fulfill his contract. Deepak is definitely an independent contractor – he used his own kitchen and his own supplies to do a job for us for a contracted rate. He also continued baking for his own customers and marketing his personal business at the same time.

Doula Agency Red Flags

From the contracts that I have seen and the discussions I have had, it is very common for doulas to be paid by the job (per birth) and not to have any benefits. This is fairly standard for independent contractors. However, the things that make me raise my eyebrows are when doulas are asked to sign a contract that does not allow them to work elsewhere or independently, or when they will be expected to do administrative tasks such as answering the business’ general office phone line. Those are both pretty clear marks toward being an employee vs. being a contractor - yet based on the doulas I have spoken with, not unusual parts of their contract.

Working for agency can be a great option for a doula. However, If you see red flags in an agency's contract, ask for clarification and ask for advice. Find out if you will be treated as an employee and if you will be receiving the benefits that employees are entitled (including drastically reduced taxes). (If you are considering opening a doula agency, you will definitely want to get good counsel to start you agency off with the correct legal systems in place. When you treat the people that work with you well, that investment will pay off!) Your doula career is important, take the time to do it right!

(Note from BEST - If you have questions about your doula career, you may call BEST Doula Training or consider certifying with us. A huge part of our training covers doula business and career options.)

After spending a decade working in human resources management, Maryn Taylor decided to do something different. She launched Buoyant Birth, a birthing pool rental and sales business that rapidly became the go-to destination for all things waterbirth.  Buoyant Birth serves expecting families with waterbirth pools and supplies all over the United States and is based out of Dallas, Texas.