Episode 087: HR Issues: Doing Your Homework

Speaker 1: You are listening to Your Practice Made Perfect; support, protection, and advice for practicing medical professionals, brought to you by SVMIC.

J. Baugh: Hello everyone, and welcome to today's episode of Your Practice Made Perfect. My name is J. Baugh and I will be your host for today's episode, and today we have Scott Hickman with us to talk about HR issues in your practice. Scott, welcome.

Scott: Good morning, J. Thank you for having me.

J. Baugh: Well, it's good to have you here. Before we get started talking about these HR issues that we're going to discuss today, tell us a little bit about your background and about yourself.

Scott: I am an attorney with the firm of Sherrard Roe Voigt & Harbison here in Nashville. At Sherrard Roe Voigt & Harbison I practice in the area of employment law. I am proud to say I've been working with SVMIC for 24 years now, very proud of that and very appreciative of the opportunity from SVMIC to work with them on a consistent basis. My practice involves representing quite a bit of medical practices, so I see the types of issues that come up in employing people in this field on a daily basis, and hopefully, I've learned a little bit of something that I can share with our listeners today.

J. Baugh: Well, it's good to have you here, and I know that SVMIC has very much appreciated the relationship that we've had with Sherrard and Roe for a number of years, and so we're glad to have you here to be able to talk about some HR issues that will come up in the practices that our listeners will be familiar with. We'll be discussing some of the more common HR issues you might run into in your medical practice. Practices have employees and therefore have to follow HR rules and regulations. So when you're a leader or an administrator in a practice, what's the most important thing you need to do to ensure that your HR processes are in place?

Scott: J, I think the most important thing that anyone can do in this area is to establish a trusted relationship with someone to whom you can turn with compliance questions. This may well be your practice's attorney, but it could also be a representative from SVMIC's practice management group, or some other source that offers assistance to employers with HR matters.

Although these types of HR consultants aren't likely to be licensed to practice law, they can and should be able to offer you assistance with compliance issues, and will recognize when and if the advice of a licensed attorney is called for. But either way, my experience has been that spending resources on compliance advice in the first instance saves clients a great deal of time, money, and heartache compared. For example, to the cost of litigation or defending against an administrative charge with the EEOC or the Department of Labor.

J. Baugh: Yeah, that's a very good point. Sometimes when I talk to our insureds, I tell them that when they call and ask for advice, it's certainly a lot easier to answer a question before the fact rather than after the fact, so I think it's really good advice to establish this relationship with people who are very knowledgeable about these type of issues.

Scott: J, I tell my clients that the best phone call for them is one that starts with, "Let me tell you what I'm thinking about doing," but the most lucrative phone call for me is the one that starts with, "Let me tell you what I've done."

J. Baugh: That's right. That's always a lot more to have to work through.

Scott: Exactly.

J. Baugh: When they say, "This is what I did. Was that okay," rather than, "This is what I would like to do. Is that okay?" Yeah, so getting that advice upfront is definitely a better situation for all involved. So when we have these processes for HR that are in place and we have all of that ironed out, how do you handle new hires going forward?

Scott: Well, onboarding is certainly just a critical time for any employer, and you, of course, have to make sure that you have all your documentation done correctly, including verification of the right to work. But beyond that, my best advice is to always require multiple references, get the applicant's permission to contact those references, and take the time to call them and document that you've done so.

You may not get much information beyond receiving the dates of employment with the prior employer, but it's still very important - in my experience - to do your due diligence in this regard. I find that if you're just getting the basics, a good question to ask is, "Is there anyone else that you would recommend I talk to about this applicant?" Sometimes you can get really important information that way.

For example, if the person that you're talking to isn't permitted by company policy to give you substantive information, but there's something that they think you should know, they may point you to someone who may be more likely to be a little bit more forthcoming.

J. Baugh: Sounds like this is another issue in which it's important to do your homework on the front-end, rather than trying to save a little money or save a little time and then you end up paying for it in the long-run.

Scott: Well I think that's exactly right because, again, if you end up having an employee that does have something in their past and something happens while they're at your practice, the last thing you want is in retrospect to be telling an administrative investigator or a plaintiff's attorney, "Well, I didn't take the time to call their references. I was busy," and it's just not a position that you want to put yourself in. So, I think it's a very important discipline to have to just simply always do it and document that you did.

J. Baugh: Yeah, "I was busy," is rarely a good defense for anything.

Scott: Exactly.

J. Baugh: So here at SVMIC, we have employee personnel manuals, and that's something that as an employee of this company, I can go back to to reference for different policies that we have in place here. So what are some of the essential elements and policies that you would like to include or like to see in employee personnel manual?

Scott: Well, of course that's a long list, so in the interest of time, I'll try to hit some of the highlights. The first thing that you just have to have is an anti-discrimination policy. It should include ADA matters and instructions for reporting any need for accommodation or any other matter concerning discrimination or harassment of any kind. Second, if you have 50 or more employees, you should have an FMLA policy.

You should also have payroll policies in your employee handbook, and that needs to include things like the timing of your work week, and I also encourage my clients to include a statement that by submitting their hours, each employee is certifying that the hours are correct and that they've neither worked any hours that were not reported or reported hours that were not worked. And I think it's also helpful to have that kind of statement on a weekly or biweekly basis, either as part of your payroll process or part of the submission of time.

A clear explanation of PTO and vacation time, and how that's calculated, is also I think a very helpful tool to have in an employee handbook. Include whether you intend to pay such time out at the end of employment or at any other time, and if so, under what circumstances, whether any time can be rolled over from year to year. I discourage my clients from allowing more than a minimal amount of time, say one week, to be rolled over, by the way. But in any event, that's a topic that needs to be addressed very clearly in an employee handbook.

Of course, you want to have standards of employee conduct and how employee discipline will be handled, preferably by progressive discipline. You want to make sure you have a statement in your employee handbook that all team members are employed at will, unless they have a written employment agreement with the company, and you also want to have a statement that the employee has received and read the handbook, and that the company can amend its policies and procedures - including the handbook - at any time.

So these are some matters that should be covered. Of course, I think they are some of the more important examples, but your handbook should be reviewed periodically by someone whose job it is to be up to date on all applicable legal requirements in your jurisdiction.

J. Baugh: Well, that's a lot of helpful information when it comes to a personnel manual. There's certainly a lot of different categories that can be included in that. In talking about employees and about the manual, I know that one of the things that you have to determine when you're setting up a practice or continuing a practice that you have, a new hire that you might have, is determining whether that employee will be paid salaried or whether they will be paid hourly, and so what are the important differences between paying employees as salaried versus paying them hourly?

Scott: Well, J, you're right. That is an important distinction to make, and often a difficult one to do correctly. Employees who are paid on a salary basis, of course need not be paid for any overtime, while hourly employees must be paid at least one and one half times that employee's regular rate. And, in order to classify an employee as exempt and pay them on a salaried basis, every employer must assure themselves that that employee is qualified to be treated as exempt.

Exempt employees have to pass three different tests: the salary basis test, the salary level test, and the duties test. The salary basis test, it's what we think of most often when we think of salaried employees. It simply requires that the employee is going to be paid a predetermined fixed amount, regardless of the quality or quantity of the work that they perform. The salary level test requires that the employee must be paid a minimum amount that's specified by regulation and changes from time to time.

And then the duties test is the hard one because that requires that the employee's job primarily involve specified types of duties. Most commonly, these are executive duties, administrative duties or professional duties - although those are by no means the only types of exemptions that are available. This duties test is very nuanced, so an employer should never rely simply on the commonly understood definitions of executive or administrative or professional. This is an area where outside support should be sought, in my opinion, if one is at all uncertain about whether an employee is properly classified because the penalties for misclassification can be quite significant.

J. Baugh: There is so much to cover with Scott Hickman about HR issues in your practice, so we'll be breaking up this discussion into two additional episodes. Stay tuned for our next portion of this discussion in which we'll be covering employment compensation.

Speaker 1: Thank you for listening to this episode of Your Practice Made Perfect, with your host J. Baugh. Listen to more episodes, subscribe to the podcast and find show notes at svmic.com/podcast. 

The contents of this podcast are intended for informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice as specific legal requirements may vary from state to state and change over time.