Discrimination Lawsuits on the Rise: Top Ways to Protect your Practice

Ali Oromchian, renowned employment attorney and co-founder of HR for Health

Emerging laws – as well as anxiety over the pandemic – are causing a spike in discrimination lawsuits. Employees’ stress level is very high, due to health and financial worries over COVID-19. This is exacerbating HR situations. Fortunately, there are many steps you can take to reduce your risk profile so your practice can thrive amid these challenges.

Wages and Hours

This is one of the riskiest areas of the law right now. You can avoid these employment claims in a number of ways:

Give appropriate lunches and breaks. Many states follow the federal guidelines, which require that you have at least a minimum of a 30-minute lunch at some point during the day, as well as a morning and an afternoon break. However, some states have their own guidelines, so be sure you check those – and document breaks. The key to defeating a case against you regarding unpaid breaks or lunches is to have proper tracking of time. This includes:

• Requiring employees to clock in and out using an electronic system

• Noting in your employee manual when breaks are

• Using your practice management software to document office closures during lunchtime

Pay earned overtime. Most states have a rule that overtime is owed if your employee works more than 40 hours a week, while others have a dual overtime rule, which means that you have to pay overtime if the employee works more than 40 hours in a week or eight hours on any given day.

If an employee works overtime without getting your approval first, you can write them up for violating your overtime policy, but you still have to pay them overtime in that circumstance. Also, if you’re a general dental practice and you are paying someone per diem, you still need to pay them if they work overtime.

Some practitioners ask us about switching everyone to salary to avoid overtime. However, in many scenarios that can restrict you. If, for example, you suddenly have no patients one afternoon due to cancellations and you send your staff home, you still have to pay them if they’re on salary.

One other issue is something called weighted averages. That’s when an employee works in two different offices at different rates of pay or with two different jobs. To calculate overtime properly requires some complex calculations. This is something we assist many of our clients with.

Understand the implications of paying discretionary bonuses vs. non-discretionary bonuses.

A discretionary bonus is one that you give out of the blue, because an employee has done something above and beyond. They have no expectation that it is coming. Those bonuses don’t need to count toward the overtime calculation.

A non-discretionary bonus is one where your employee knows the anticipated amount and how they can earn it. That does need to be included in their compensation when calculating overtime. This can make a big difference. If you are paying someone a few hundred dollars a pay period or month for reaching certain goals, that can increase their compensation, which increases the amount of overtime they can earn.

Know the risks of having independent contractors

Many practices like hiring associates as independent contractors due to the financial and tax benefits. In a typical practice, there are two different groups of employees: regular team members, which as hygienists, RDAs, Das, front reception, and office managers. With the first team, there is virtually no chance under any state or federal guideline where they qualify has an independent contractor. If you’ve already hired any of these individuals as independent contractors, that is a huge red flag, and will cause you problems on many levels.

The second group of employees is associates. It is a challenge to classify an associate as an independent contractor unless they are truly independent. This comes down to who has control over the employees, patients, supplies, equipment and treatment plan. If the associate is working on your patients but you have control over those patients, then they should be an employee.

If you’re bringing in new associates, hire them as employees. It’s not worth the risk to have them as independent contractors. If you already have independent contractors, talk to your CPA about whether you should change them to employees.

Choose carefully between making employees exempt or non-exempt. If you want employees to be exempt so they don’t earn overtime, you need to pay them an annual, monthly, or weekly salary, not per diem or hourly. Doctor associates, office managers, back office and front office managers, and supervisors may quality as exempt employees while a DA, RDA, or hygienist would almost never quality as exempt.

Avoid wrongful termination claims. These claims have been on the rise during COVID-19 because many people are using COVID as a reason to take time off, to do different things. This may be causing a lot of frustration in the office, with employees being fired. There are some cases where you should never fire someone without first talking with a professional well versed in navigating these situations:

• If they are pregnant

• If they are older

• If they have been injured on or off the job

Otherwise, you are setting yourself up for a lawsuit. This is particularly so if an employee becomes pregnant. In California, for example, the rule for some businesses is that it could be almost two years before you can legally fire that person, because their job is protected if they have a child or are taking are of a child. Also, if someone has been injured, they can be considered to have a disability that is protected.

Consider your accommodation process. If you have employees who fit into these profiles, talk to them to find out what they really need due to the disability. If an employee is pregnant, for example, is she going to stop early or work until she is close to her delivery date? Having open dialogues about this can help avoid misunderstandings that are at the root of many lawsuits.

Note: You do not have to accommodate to the degree that it puts the business in jeopardy or puts you in a position where you have to hire someone else.

Comply with all Families First Coronavirus Response Act (FFCRA) and PPP loan rules. The government has set aside a large budget to conduct audits to root out fraud, so it’s essential that when it comes to the FFCRA and PPP, you are in compliance. In these situations, documentation is king. If you're seeking forgiveness on your PPPs, you need data to back this up. And when seeking tax reimbursements for FFCRA, you need documentation. It’s equally important to document:

• Employees’ performance reviews (ideally conducted on the anniversary of hire)

• Employee violations (signed by the employee)

• Career development plans

If you are sued and you are lacking documentation for something, the opposing attorney can easily claim that it didn’t happen.

Also, a recent Dental Business Institute survey found most employees felt doctors were not prepared for their performance reviews. To avoid this, base reviews on objective data and track this through task reports. Not only does this avoid the subjective nature of determining merit increases, it helps employees see that you appreciate what they’ve contributed to the practice.

Set equitable rules when it comes to layoffs. Many HR companies recommended to dental practices that they fire employees in the wake of the pandemic. We recommended furloughing instead. Firing people burned bridges, and many team members did not come back, or returned with a very different relationship with the doctors. If you are in a situation where you need to lay off employees, use an objective methodology for doing so. This could mean laying off the highest paid employees or laying off the last employees hired. If you fire people randomly, the chance of discrimination claims will be very high.

Avoid retaliation. A retaliatory measure is a negative action against an employee (such as cutting their hours) in response to something they have asked for, such as taking medical leave. Be very careful to avoid this. It’s also essential to be equitable in offering FFRCA leave. If you give one employee leave because they or a family member got COVID, all employees should be eligible under similar circumstances. Be sure employees fill out a request form to document the reason for the leave.

Another common area of retaliation is safety related to COVID. In addition to following OSHA and other safety guidelines, educate your staff and talk with them openly about any safety questions or concerns they may have. Having those conversations can mitigate some of those risks. Often an employee may lack an understanding of what you are doing to keep the office safe.

Conclusion

Like all of us, employees understandably have many worries due to the ongoing pandemic. This uncertainty can create an environment ripe for lawsuits. That’s why it’s critical to consult with HR professionals well versed in dental practices, keep strong documentation, and have open conversations with employees to understand and address concerns. This can help protect your practice from costly lawsuits.

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This article was prepared for general information purposes only by the author and is not intended as legal advice, nor purported to be comprehensive.  Henry Schein does not guarantee the accuracy or reliability of the information provided herein.  Any reliance upon any such information is solely and exclusively at your own risk.  Please consult your own counsel or other advisor regarding your specific situation.  Henry Schein shall not be held responsible for any consequences of reliance upon any opinion or statement contained here, or any omission.  The opinions expressed in these materials are not necessarily the opinions of the author, Henry Schein, or any of their affiliates, directors, officers or employees.