3 Compliance Mistakes You Can Fix Now

I know, I know. HR sucks sometimes. For many employers, it ranks right up there with root canals or colonoscopies. Particularly because employers are required to be in full compliance with the hundreds of federal, state and local employment laws, 100% of the time.

The truth is, though, HR doesn’t have to be complicated. (Or at least, not as complicated as it seems.)

Below I’ll discuss three common areas of noncompliance with employment laws that many healthcare employers have difficulty with. As you read through this article, have your handbook handy nearby to check your policies against what I’ve included. And if you find anything that’s worrisome, take note! Remember: it’s easier to fix these issues quietly now than to publicly repair them once an employee, their attorney, or a government agency investigator notices a problem.

(If you’re a CEDR member, remember that you’re fully covered. We have crafted your handbook to comply with all of the below, plus keep it up to date with all the recent rulings and regulations. For you, compliance is effortless!)

#1 – Pay Practices that Violate Wage and Hour Laws

This probably seems like a strange place to start. After all, between you, your office manager, and your payroll company, this shouldn’t be an issue for your practice… right? Unfortunately, for the majority of business owners, that just isn’t the case. The Wage and Hour Division of the US Department of Labor (DOL) has estimated that 72 percent of all employers violate the Fair Labor Standards Act (FLSA) in some way or other. And that number doesn’t include the potentially dozens of state laws that employers must comply with, as well.

In other words, if there’s any chance that a mistake is being made in one of these common areas, you’re MUCH better off identifying and addressing it now, rather than waiting for an ominous knock on your door. Trust me—nothing looks worse to the government, a judge, or a jury, than if it looks like you’re trying to get out of paying your employees properly…

Here are a few common areas of noncompliance that many healthcare employers get wrong (and you should check!):

• Unlawful overtime policies or practices. Did you know that overtime isn’t 1.5 times the hourly rate, but rather 1.5 times the employee’s “regular rate of pay”? Do you know what else the regular rate of pay includes? (Hint: bonuses increase overtime rate of pay!) Going further: do you have any policy that says unauthorized overtime will NOT be paid? (Hint: if the employee is non-exempt, you must pay for all time worked, even if not authorized.) There’s a lot more to know in this area. Call CEDR at 866-414-6056 if you’d like to have your policies checked.
• Misclassification. This is an area even seasoned employers get wrong. If you’re a dentist, your hygienists are almost NEVER exempt from overtime, and if you’re a doctor, the same is likely true of your nurses. There’s a LOT more to exemption than paying on a salary basis. Instead, employees must meet very strict criteria—and mistakes can leave you liable for fines, penalties, or even decades of back overtime pay. You can start with this resource, but I recommend having an HR expert double-check your classifications and any state requirements.
• Using “working interviews” when hiring. What could be better than trying an applicant’s skills before you hire? Avoiding accidental tax fraud, that’s what—not to mention massive liability. The moment someone performs work for you, you are their employer. That means tax forms and new hire paperwork are required, they must be HIPAA trained, they must read and acknowledge your employee handbook so its policies and protections apply, and so on. When you only want to test an applicant’s abilities, it’s far safer to use a skills test instead.

And much more… From understanding when non-exempt employees’ time must be paid, to avoiding improper deductions from exempt employees’ salaries and beyond, it’s easy to violate wage and hour laws with no inkling that you’ve done so. If you think you might have any of the problems we’ve described, contact CEDR right away to work toward discreet solutions.

For a deeper dive on employee classification and wage and hour issues, see The CEDR Guide to Employee Classification and Wage Compliance.

#2 – NLRA “Red Flags” that Put You in Danger

The National Labor Relations Act, or NLRA, is another big bad federal law employers have to follow to the letter. While the NLRA’s complex regulations are meant to protect workers’ rights to communicate about and act to improve working conditions, it’s easy for employers to accidentally violate these rights in their day-to-day attempts to manage and run a business.

Worse, as the National Labor Relations Board (NLRB) responds to ongoing cases and interprets the NLRA, employer best practices must constantly shift and evolve in response.

Unfortunately, employers can’t rely on common sense to ensure NLRA compliance—many sensible sounding policies have been found in violation of the Act. Check your employee handbook and your day-to-day management practices for these common “red flags”:

• Salary information is strictly confidential, and should not be discussed with other employees or unauthorized persons, on or off the job.
• Employees may not conduct personal business during working hours.
• All practice matters, including information about the doctor, management, or patients, are confidential.
• Gossiping is strictly forbidden.
• Employees may not post negative or defamatory remarks about the company, doctor, management, or coworkers online or on social media.

While these policies seem like sensible attempts to maintain morale and productivity, the NLRA sees them as overly broad or overly restrictive to your employees’ rights to improve their working conditions.

In addition, each of the above has also acted as a “gateway policy” for NLRB investigators in past cases, giving them carte blanche to scour the rest of your handbook for any other problem policies they can find.

If any of these look eerily familiar, stop using them immediately and get expert help before some major HR dustup brings them to anyone’s attention!

#3 – Outdated Policies in Your Employee Handbook

When Benjamin Franklin wrote the phrase “In this world, nothing can be said to be certain except death and taxes,” he forgot to include one last thing: employment law changes.

New employment laws are created each year at federal, state, and even local levels, and existing laws are sometimes updated, or have new guidance released. The net effect is that, unless you’re religious about updating your office policy with regular frequency, every out-of-date policy is a problem waiting to happen.

In fact, here are just a few policy areas (out of over 150) that have seen updates across multiple states and municipal areas over the past few years:

• Paid sick leave – a state law trend sweeping the nation
• Pregnancy discrimination protections, and parental/MLOA leave
• Social media best practices, confidentiality policies
• What cell phone policies should & should NOT include
• Medical marijuana / drug policies
• State / local minimum wage increases
• Pay equity & anti-discrimination policies
• Pay reporting (anti-wage-theft) policies

This is a big deal because any time you are involved in any dispute with an employee—or their legal representative—each out-of-date policy in your handbook is a weakness waiting to be exploited. This can even cause you to settle or lose a claim you might otherwise win.

In addition to any updates that may be required, you always want your employee handbook to include as many protections as possible, including legal safe harbors, statements that it is your intention to abide by the law, and “burden shifting” areas where some responsibility is transferred to employees to report issues.

HR Doesn’t Have to Be (Overly) Complicated

Hopefully this article gave you a good idea of the areas (if any!) in your employee handbook that are either in trouble, or have the potential to cause trouble for you. The key is to address them NOW before they become a problem, rather than once a government agency or plaintiff’s attorney forces your hand.

There are two ways to stay in compliance. The first is by hiring a professional company like CEDR to take on the responsibility. A professional company will track all law changes on your behalf, and create or update your office policies as needed to comply with changes or additions. This makes compliance simple for you.

The other option is to DIY. This is definitely the more difficult of the two, and one we don’t recommend. That is because there is no such thing as “Well, I tried my best to follow the law.” It’s either right, or it’s wrong—there is no space for gray areas. Staying in compliance means you or an office manager spending multiple hours a week researching and staying on top of any law or regulation changes that may apply to you, including court decisions that affect the interpretation of the law. It’s almost impossible to get everything right, or to write perfect legally compliant policies on your own, and that’s just one reason why we don’t recommend it.

As a special offer, I’d be happy to have CEDR check your policies for you, for free. If interested, email eval@cedrsolutions.com and include your name, state, number of employees, and a good phone number to reach you at.

Good luck with your compliance! One way or another, please make sure you fix these issues sooner rather than later. It’s your own profits and peace of mind that you’re protecting.

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace counsel about a specific issue with an attorney or HR expert. This material is meant to provide information that is believed to be current as of the date of this post.