How Dentists Can Protect Themselves
Without
proper planning, dentists may find themselves at odds with their own employees.
The potential problems are many and include misunderstandings, resentments, and
even lawsuits.
As a Maryland attorney with 25 years of experience representing
dentists and other medical professionals, I have seen firsthand the various
pitfalls a typical employer-employee relationship may suffer. By taking proper
precautions, however, many of these problems can be prevented.
When
counseling current and prospective clients, we often advise the following:
- Maintain
good personnel records. Maintaining thorough and accurate
records of all employees and independent contractors is the first step
toward avoiding problems. These records should include the terms under
which the individual is employed, including compensation amounts, bonus
calculations, vacation allowances, continuing education provisions, and
other benefits. Detailed information about any personnel problems, such as
the nature of the matter, the date of each incident, and any disciplinary
action taken, should also be included.
- Avoid
written office policies and employee manuals. This
may seem counterintuitive, but we generally discourage clients from
providing employees with written office policies or employee manuals. The
problem is that employers may unwittingly deviate from the procedures
specified in these documents. Especially when matters like compensation
and termination of staff are involved, such deviations can lead to
lawsuits, with your own employee manual as a primary exhibit.
- Require
employment agreements with restrictive covenants. We
strongly urge employers to have their professional and administrative
staff sign employment agreements that include an adequate and enforceable
restrictive covenant. Without these covenants in place, a dental practice
may face unfair competition from a current or former employee whose
activities were not properly limited for the benefit of the employer. For
example, an employee could leave the practice and attempt to hire one of
your other employees, market to your patients, or make off with office
records.
- Provide
required post-termination compensation. If an employee’s
compensation includes a percentage of his or her collections, then as a
matter of law, the employee may continue to receive such compensation
after leaving the practice. Although the employee would no longer receive
any base pay, he or she should still receive the percentage of collections
attributable to his or her work. Employers who fail to provide such
post-termination compensation may be subject to treble (“triple”) damages.
- Be
cautious about “independent contractors.”
Employers should be extremely cautious when attempting to hire someone as
an independent contractor. Simply calling the individual an independent
contract may not be enough; the IRS may conduct an investigation to
determine whether the classification is appropriate. If the IRS concludes
that the individual is not an independent contractor but an employee, the
employer may be found liable for any deficiency in withholding taxes and
the accrued interest and may be subject to stiff penalties. Before
classifying a new hire as an independent contractor, the employer is
strongly advised to seek the advice of an attorney or CPA to avoid running
afoul of IRS rules and regulations.
- Avoid
common-sense problems. Avoiding some pitfalls in the
employer-employee relationship should be a matter of common sense. The
following problems, however, occur often enough to make them worth
mentioning:
Intimate
relationships in the workplace. Employers should discourage their staff members from engaging in
intimate relationships with other employees, especially between supervisors and
subordinates.
Cash
payments to staff. Providing staffers with cash payments for compensation,
reimbursement, etc., should be avoided. Issuing checks instead ensures a
traceable paper trail in case a problem arises later.
Inconsistent
treatment of staff. All staff should be treated with the same degree of professional
courtesy and respect.
Denying
overtime pay. Be sure to follow state law requirements for overtime pay, which
may include certain exceptions.
Discriminatory
practices. Decisions about matters like terminating an employee, providing
bonuses, or giving promotions should not be based on characteristics such as
age, gender, disability, religion, race, sexual orientation, etc.
- Retain
specialized professional advisers. Before retaining an
attorney, CPA, or other professional, look for someone who has extensive
experience serving dental practices and whose client base is made up largely
of dental practitioners. This experience and familiarity will be an
essential benefit as you navigate the legal and professional intricacies
that distinguish dentistry from other enterprises.
Working
with dentists over the years has shown how often problems can arise between an
employer and the staff. More importantly, it has enabled us to develop
effective ways to prevent many of these problems before they occur. By taking
sensible precautions, dentists can save themselves time, money, and a lot of stress.
Michael R. Limsky is a partner at the Maryland law firm of
Summerfield, Willen, Silverberg & Limsky, LLC. His extensive experience as
a business and corporate lawyer includes a special emphasis on the unique needs
of dentists and other medical professionals.
Please
remember that the information contained on this blog is intended to provide
general information about legal topics and should not be construed as legal
advice.
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