Sterilization Issues, AI in Healthcare, and Multiple Layoffs

Welcome back to another edition of HR Basecamp Roundup! This week, we tackle some interesting and common issues that come up in workplaces more often than you think. If you haven’t joined our HR Basecamp Facebook group yet, be sure to join so you can participate in these discussions in real time!

FREE Resources in this Roundup:

• AI in Heathcare Podcast
• Layoff vs. Termination Blog

1. My employees aren’t sterilizing instruments properly. 

Question: On multiple occasions, I have found instruments that weren’t properly sterilized. Three employees are in charge of this, so I’m not sure if they are all making this mistake or just one person. Either way, this is a major problem. How can I address this if I don’t know exactly who is responsible?

The Legal Side:
You’re right to take this seriously. Failure to sterilize instruments properly can violate OSHA’s Bloodborne Pathogens Standard and trigger inspections, fines, and required corrections.

State health departments and licensing boards also have infection control rules. If an incident occurs—or an inspection reveals sterilization issues or a lack of documented corrective action—you’re operating with built-in liability.

And, of course, unsterilized instruments pose a direct threat of harm to your patients. 

In each of these scenarios, the practice is accountable even if the responsible person isn’t clear. Our best advice is to act quickly: reinforce protocols, document your response, and implement preventive measures.

The Human Side:
When it’s unclear who’s at fault, treat it as a team accountability issue until you can pin point the individual(s). Start with a memo or team meeting that does three things:

• Reaffirm your commitment to patient safety and explain why sterilization is critical to both trust and compliance.

• Outline the risks—both health-related and disciplinary—for failing to follow protocols.

• Set clear expectations moving forward: this is non-negotiable. Include remedial training, with everyone signing off that they’ve been retrained.

If the problem continues, shift from team-wide reminders to targeted coaching and retraining. Once you make that shift, it’s essential to identify the individual responsible. Nothing undermines morale faster than good employees being blamed for others’ mistakes. Investigate first, and if you can’t’ identify who the individual is from that, then do a team-wide retraining or reminder.

This protects your patients, your license, and your culture and clarifies that safety is not optional.

2. Is it okay to use AI in a healthcare setting?

Question: I was recently introduced to AI software that could really streamline note taking for my entire staff. The friend who recommended it said there is no privacy risk, but I’m in healthcare and they’re not. What about HIPAA? Are certain AI tools off limits?

The Legal Side: This is a smart question, and one that more and more healthcare employers are asking as AI tools become a daily part of doing business.

Let’s start with HIPAA. While current HIPAA regulations don’t mention AI specifically, the Department of Health and Human Services (HHS) has made it clear that if a tool handles electronic protected health information (ePHI), you’re still on the hook to keep that data safe, AI or not. If there’s a breach, you can’t point to the software and say, “Well, it said it was HIPAA compliant.” The burden is shared, and you as the provider, can still be held responsible.

That means you need to:

• Verify the tool’s security infrastructure.
• Be skeptical of “HIPAA-compliant” claims. Ask questions and read the fine print.
• Consider where and how the data is stored. If it’s in the cloud, you need to know who owns it and who has access.
• Make sure you have Business Associate Agreements signed with third-parties, including AI software, that is granted access to PHI. (CEDR Members can reach out to us for a sample agreement). 
• Stay up to date. HHS has said more AI-specific rules and guidance are likely on the way.

Also, don’t forget state laws. If the tool records conversations with employees or patients, you may need verbal or written consent from one or all parties, depending on where you’re located. For example, some states require two-party consent for recordings, which is a big deal if the software automatically captures audio.

We are beginning to see chat agents isolated from all other learning models, claiming to be HIPAA compliant. Make sure that you use an AI tool that meets that standard.

The Human Side: AI note-takers can backfire if your staff isn’t trained on using them, or worse, if someone starts using one without your knowledge. We’ve already seen cases where employees dropped patient information into public tools like ChatGPT without realizing the risks.

So what should you do?

• Train first, launch second. Don’t roll this out on a whim or assume your team will just figure it out.
• Implement an internal approval process. Make it crystal clear that staff must get permission before using any AI tools, no matter how useful or “safe” they seem.
• Get it in writing. Add a policy to your employee handbook that covers AI usage, approvals, and restrictions. (CEDR members can contact the Solution Center for custom policy language.)

Extra Credit Listening: AI is a Revolution for Medical Offices-As Long as You’re Careful! 

3. How do I handle multiple layoffs?

Question: Unfortunately, I am going to have to layoff 2-3 employees due to slower business levels. Do I handle it the same way that I would handle a standard termination? How do I pick which employees to let go?

The legal side: We’re glad you have an inkling that a layoff is not the same as a standard termination. A layoff is based on a business need, not the employee’s performance or conduct. That distinction matters. When you lay someone off, you eliminate the position without replacing the employee. 

Some employers try to disguise a termination as a layoff in order to avoid conflict and drama in letting an employee go. If that employer rehires for that same role within a short time frame (typically 3 to 6 months), they risk opening themselves up to a legal claim from the “laid off” former employee. The role being refilled so quickly is an obvious sign that there wasn’t a true business need for a layoff, and instead their former employer was seemingly trying to cover up for a discriminatory or retaliatory termination.

To avoid this, it’s essential to:

• Document the business reasons for the layoff (e.g., financial reports, scheduling changes, restructuring plans).

• Use a clear, consistent, and objective selection process, considering factors like seniority, job function, and business need. Performance can also be considered, but be cautious—if that’s the primary basis, it begins to look more like a performance-based termination.

• Assess the demographic impact of your decisions to make sure the layoff doesn’t disproportionately affect a protected class.

Regardless of how the employee separates, you’re still legally obligated to follow your state’s laws regarding final paychecks and vacation/PTO payout. If your state doesn’t regulate PTO payout, defer to your handbook policy.

The human side: Laying off employees is one of the hardest things a business owner has to do, and it’s important to approach the process with empathy and clarity. 

When delivering the news, do it in person. The setting should be private, respectful, and away from distractions. It’s best to get to the point early in the conversation: Let the employee know their position is being eliminated due to changes in the business. Be clear and honest but also compassionate. Acknowledge that this is difficult news, thank them for their contributions, and explain that the decision did not reflect their performance.

While you don’t necessarily need them to sign anything, providing a written layoff letter can help smooth the transition and prevent confusion. This letter should outline the effective date of the layoff, what they can expect in terms of final pay and any PTO payout, and what will happen with their benefits. You can also include a note about your company’s rehire policy.

Even if you can’t offer severance or job placement assistance, small gestures of support, like offering to be a reference or helping them with resume language, can help the employee leave with dignity and goodwill. It also sends a strong message to the rest of your team that your business treats people with respect even in hard times.