My Wife Is Owed At Least $16,000 But Her Job Has Only Paid Her $2000 Total In 3 Payments Since July. Now They Want Part Of It Back

Location: Michigan

Posting for my wife. She's a newly licensed therapist (LLMSW) who started at a private practice in July as a 1099 contractor. She never got a written contract, even though she's asked the owner for one repeatedly. Every time, the owner says they'll get around to it, and they never do. The verbal deal is that she keeps 60% of what's collected, which is the same split the other therapists have in their signed contracts.

She's seeing about 12 clients a week. Since July she's been paid three times: roughly $600, $700, and $1,000. The owner now says part of the $1,000 was a double payment for some cash-pay sessions and will be taken out of future checks. Meanwhile, other cash-pay sessions were never paid at all. A month ago she got a brief look at the billing system, which showed at least $16,000 in her sessions ready to be billed.

It's not just her. All of the roughly 23 therapists there are in the same spot, and one of them is now on food stamps.

The practice replaced its billing company with a part-time in-house biller who has no experience and is a client of one of the therapists. After that, the therapists lost access to their own billing records. The biller sends them to fix insurance problems with clients, unpaid, and the claims still don't get paid. My wife has a workers' comp client whose sessions haven't even been submitted because the biller "hasn't gotten around to it."

She has her own session log, pay statements, and plenty of texts from the owner admitting the problems and promising to fix them. No date ever comes.

We're living paycheck to paycheck. She's 6 months postpartum and we have a baby to feed, so this isn't extra money for us. She wants to stay until she's fully licensed and just get paid for the work she's already done.

She's also a green card holder. She hasn't done anything wrong, and pushing for her pay doesn't put her status at risk, but with how intense the current environment is around immigration, she really doesn't want the stress of a big fight. Between that and a new baby, she just doesn't have room for it. That's a big part of why she's put up with this for so long, and why we're looking for the cleanest way to get this resolved.

What can she do to get paid when the agreement was only verbal?

Does she have a right to see the billing records for her own sessions?

Can the practice take the double payment out of her future pay when it still owes her far more than that?

Is she really a 1099 contractor, or could she count as an employee, given how much the practice controls (rates, billing, required meetings, its offices)?

What's the smartest first step: a demand letter, small claims, or a lawyer, especially if the other therapists join in?