Episode 606 : Employee Wants the Money, Not the Benefit – Just Say No!

Voice Over: You’re about to listen to an episode of What the Hell Just Happened?! Join Paul Edwards and his guests as they discuss interesting HR topics and solve some of our listeners’ submitted questions.

 

Paul: And occasionally I’ll go off HR topic and talk about whatever I want to talk about. Think barbecue. Space exploration. Technology. Money. Managing. Business. Things that interest all of us.

 

Voice Over: We get a lot of emails with questions. Stay tuned for details on how you can submit yours to the show. And now let’s get started.

 

Paul: Hi, everybody. Welcome to What the Hell Just Happened?! On this week’s episode, Ally and I are going to hang out and we’re going to answer a couple of questions. One of the questions that comes in all the time has to do with health insurance stipends and employees negotiating for a raise and saying they’re not going to take health insurance. So we go through that scenario pretty thoroughly, cover it top to bottom, and kind of explain to you what you can and can’t do and why. Then we got a great listener question that came in about an employee wanting to claim unemployment insurance every time the practice was closed, and we again go over that nuts and bolts and we give you guys a good scenario and kind of go over some things that you can do to mitigate that from happening inside your practice. So with no further ado, let’s get to our questions. Hey, Ally. So today we’ve got two good questions. One of these is a question that comes in all the time from all different directions at CEDR talking about health insurance and I’m really happy we’re going to talk about this first question and pointing out that we definitely are not experts in health insurance, but it’s something that we have to cover and understand here. Then the other question came in from a listener. So you guys who are listening, we are always asking for you to send in your questions, so in the second half of this podcast, we’re going to ask the listener’s question directly to the What the Hell Just Happened?! podcast. Ally, what is…Now I wonder if I need to call you Ally D anymore? If I can just call you Ally? Does anybody else in your life call you Ally D?

 

Ally: It’s just you and Jennie, because you’re the only ones who were there, and Grace, I think. But yeah, and that’s funny. We talked about this the other day. People are like, “Why do they say that? Like, they don’t put anyone else’s initial at the end of the line.” Whatever you prefer.

 

Paul: Okay. Yeah. Well, we had more than one Ally at one point, so we needed to differentiate.

 

Ally: Yeah.

 

Paul: Yeah. So. All right, so Ally, it’s going to take me a while –

 

Ally: It sounds unnatural. [laughing]

 

Paul: It doesn’t feel right. What’s the first question?

 

Ally: So the first question we’re talking about today is health benefit stipends or providing a health benefit in –

 

Paul: As a benefit.

 

Ally: In an unconventional way.

 

Paul: Yeah.

 

Ally: So you’re not actually signing up for a health benefit plan and this is a question that we see come in a couple of different ways.

 

Paul: So first of all, there’s often a health benefit plan being offered to everybody. So that’s where this question comes from.

 

Ally: Yeah. So the first thing is we’ll get employers who ask, “My manager doesn’t need health insurance.” For whatever reason, somebody, someone in the business doesn’t need it. They either are covered through their partner or they have some other way that they’re getting it. So she negotiated a higher pay rate. This specific question that brought this to our attention, kind of sparked our interest to talk about this today, was an employee who was getting a divorce. So she was losing health benefit coverage. Now she wants to get –

 

Paul: Into the plan.

 

Ally: Into the office’s plan. So this employer is now wondering, “Well, now she is getting that health benefit and I’m paying her more. It only makes sense to -”

 

Paul: Take it away.

 

Ally: Cut down her pay. Well, the employee thinks that’s unfair.

 

Paul: Yeah. Employee doesn’t like it and that’s kind of the crux of what we’re going to kind of chip away at today, which is this typically shows up as one or more employees say, “Hey, I see we offer health insurance. That’s got to be a certain amount of money that you’re contributing to our plan and I have my own plan. I don’t think it’s fair that I don’t get that benefit, too. It’s not fair to me.” So they then negotiate for that money and oftentimes it’s a very reasonable argument. It really is. It’s got good reasoning, but I think after you listen today, you’re going to find that our guidance (spoiler alert) is don’t do that.

 

Ally: Yeah, I think at the surface it seems like the perfect solution: It’s easy, it’s direct, what could go wrong? But yeah, there’s a couple issues with that and I think starting with the fact that you need to realize that this is not…You can’t allocate this as a health care benefit. You’re literally just paying them more.

 

Paul: Yeah. You are not able to…Well, we’ll kind of get into it, okay?

 

Ally: And then, I just did want to mention another way that we see this and I saw this a lot in the last couple of years when there were people were having a lot of trouble hiring, were offices who were maybe a little bit smaller and didn’t offer a health insurance benefit, but found a really great candidate, and they were like, hey, well, instead –

 

Paul: Could you get a little extra?

 

Ally: Get paid a little more? Further down the line, that office is now in the position to offer health care benefits.

 

Paul: Right.

 

Ally: And they’re like, “Wait. I still want to get paid more.” So it appears in a couple of different ways, but our guidance kind of stays the same regardless of what situation you’re in.

 

Paul: I think the question you always have to ask is what happens when and if they lose their health insurance for any given reason, right? That’s it.

 

Ally: Yeah.

 

Paul: Maybe their health insurance was with their spouse, as we said, and for some reason during this process of the marriage breaking up and divorce or whatever, they lose their health insurance and they’ve got to figure it out. Oftentimes that happens and one of them has to go and cover and then they have to find their own insurance is just part of the settlements. But the fact is, it’s simple. I don’t care about all those details. They’re about to lose their health insurance or maybe their health insurance plan isn’t great and yours is getting better and better, like you said and things are getting better and they’re like, “Well, I’d like to get in the plan.” And then they find out that, you know, because they have to have their kids in the plan, it’s even cheaper to come over into the company plan and they can save a couple of hundred dollars a month, which is a lot of money in the long run, and they want to come back over. But again, we’re just going on that foundation that we have given this employee something extra. They’ve negotiated because it wasn’t (and I’m air quoting for everybody who’s listening) it wasn’t “fair” to them that they didn’t get a piece of this benefit and I do just want to pose this kind of snarky reply. Well, if you offer all kinds of benefits, let’s use CEDR for example, okay? I can’t remember them all, but I mean, we have a few, though, so there’s health insurance. You know, we contribute to that. There’s the gym. You can bring your dogs in.

 

Ally: Yeah.

 

Paul: What else is there?

 

Ally: We’ve got our 401K.

 

Paul: Oh! We have our 401K. Then we probably have like five other things, like with the use of the Lyft –

 

Ally: The company Lyft account.

 

Paul: Outside of business you can use it to get yourself home if you need to get yourself home, your car breaks down or you’re out and have a couple glasses of wine you don’t expect and you don’t want to drive home and you can use it to get back to your car in the next morning, you know. Anyway, at what point does this thing where we equate something that you’re not using as an employee, where we give it some value, at what point do we say, “Yes, you didn’t use any of those services. Now we’re going to award you even more money because you don’t, you know,  my husband and I have two cars. I’m never going to use Lyft. I don’t contribute to the 401k, but I see you make a contribution to it. Can I get my matching contribution some other way?” And the answer to all of those is no.

 

Ally: Yeah.

 

Paul: No, they are called benefits for a reason. They are something that stands here, and quite frankly, I’m talking to managers and owners out there. I like giving all the benefits that I give over at CEDR, but I do count on some people not going to participate, you know.

 

Ally: Yeah, not everyone is going to use every benefit that you offer.

 

Paul: No. Just because I offer the gym and three people go, I’m not paying for 40 people.

 

Ally: Right.

 

Paul: Right? I mean, they’re not going, I’m not going to pay for it. So why? I don’t understand why I would then give that money to someone else as an add on because maybe, you know, they’re saying it’s not fair to them. But let’s go back to the health insurance.

 

Ally: Yeah. Back to the health insurance. This could honestly apply to any of the benefits that you just listed, but the biggest problem with this is that an employee is just going to start to see that as part of their average.

 

Paul: We all do and I don’t blame them.

 

Ally: It’s no longer going to be a benefit. So down the line, for whatever reason, they want to come onto your health insurance, you know, whatever it is –

 

Paul: And you have to let them, by the way. You can’t say, “I gave you a raise. Remember when I gave you a raise, when you negotiated for more? You don’t get to get in our health insurance.” That’s not legal.

 

Ally: That’s going to be required.

 

Paul: Yeah.

 

Ally: What’s going to be way harder is trying to claw back that extra payment that you’ve been giving them, because, again, they’ve come to see that as part of their average income. They’re going to say this isn’t fair and that’s hard to do. You can do it. Certainly you could cut their pay for this reason. How well is the employee going to take that?

 

Paul: They’re not going to take it at all.

 

Ally: Probably not great.

 

Paul: No, they’re not going to be happy with it at all. It’s going to be the same thing. It’s not fair because it’s how it feels to you at the time. Because I do the same thing, like I’ll create a couple of different savings accounts in my bank, you know, so I can pull the money over here for this and nobody over here for that. It’s just my way of doing it. In the end, it’s just the amount of money that I have. It doesn’t really, you know, putting them in different accounts doesn’t mean anything.

 

Ally: I wanted to touch on this just because of what you said about not all employees using benefits. That’s another risk of doing this here, because if you do this for the one employee who kind of made this agreement with you on the side and your other employees find out about this and they say, “Hey, I’m okay with going off the company health insurance plan if it means I’m going to get this much more on my monthly paycheck.” You now have to answer those questions. You’ve got to explain your reasoning on why this person is getting it, and it is possible that all of your employees or a lot of your employees are going to be like, “Wait, I like that method way better.”

 

Paul: Or, “I need the money right now because of…” And I, you know, I’ve lived that way myself often. I need that money and you’re going to get that money any way you can.

 

Ally: And I think that’s particularly relevant with health insurance benefits. Especially for any of our offices out there that may have dental assistance or receptionists that are on the younger side, I know plenty of people in my even late twenties that were like, “Oh yeah, I just don’t have health insurance because I -”

 

Paul: Yeah, I didn’t either.

 

Ally: And that’s very common.

 

Paul: So I want to kind of drill down into that a little bit, make this other kind of human point. It’s, look, health…Medical bills are difficult, okay? And we all know that they’re out of control and you can go in, I think I saw Bill for a snake bite the other day was $256,000. And you know, with a caption, “We have to do something about that.” By the way, when I was married and we had just moved to Tucson, I have seen rattlesnakes before, not that many rattlesnakes and then I saw the biggest rattlesnake I’ve ever seen in my life right outside my door, curled up in a corner. Gosh he was big and he was loud and we got the dogs inside and everything and all the adrenaline’s going. And I’m like, “How can I get this snake out of here?” And I’m outside and I’m looking at the snake and I’m thinking, “I don’t know. What am I going to do? I’m going to talk him into leaving? I don’t know.” I don’t even know how he got in the yard, in the fence and then underneath the porch and my wife yells out from inside the house, “It’s $65,000 if you get bit!” I think she said, “I think it’s $35 and I can get a guy to come over.”

 

Ally: [laughing] Yeah.

 

Paul: And I’m like, “Okay, that seems to make sense.” But nonetheless, I took a little left there. Health insurance covers that sort of thing, which I guess the point I wanted to get to is no matter how much money an employee makes or you make, as you’re listening, we all know health bills, medical bills are out of control and so it doesn’t matter what your age is. If you get sick and go to the hospital without health insurance right now, you’re going to end up with some pretty nasty bills.

 

Ally: Yeah, for even the smallest thing, you don’t even have to get sick. I mean, you could sprain your ankle, you know, and that’s going to be –

 

Paul: And it’s going to be very expensive and then the next thing you know, that employee, your employee – So here’s the human thing – The next thing you know, your employee has the weight of that extra collections and bills and everything on them and if, you know, we have to realize out here that it is that kind of weight that rent went up, electricity’s not getting any cheaper. My grocery stores on my side of town have increased by about 45% since before the pandemic. They’re grabbing every dollar they can, so point being that nothing’s getting cheaper and the more a person struggles, I truly believe this, the less smart they become. If that’s the right way to put it. When you’re so involved with your bills and trying to make it day to day, you make a decision like, “I’m going to drop my health insurance because I need that extra $125 a month.”

 

Ally: Oh yeah, I see what you’re saying.

 

Paul: You might make –

 

Ally: More rash decisions based on the immediate need.

 

Paul: But now do that and then end up three months later breaking your leg, you know, stepping off a curb or something, and now going in the hospital and getting this other bill and then they just stay on you. That stuff doesn’t go away, even though they’re not supposed to report it on your credit anymore. They can come after you for it. They didn’t change the laws. They can’t come after and sue you for that sort of thing. I want things to be the best for all of us that they can. I’m not responsible for everybody that works for me, but I can be conscious of what’s going on out in the world and try to make the best decisions that I can make. Now, I can refuse to let you have the extra money and you can refuse to get health insurance. That’s your choice. I mean, I get that. It’s possible, but I just want to point out, I mean, we’re in a society right now where the more you have piled on top of you, the harder it is for you to be smart. I don’t mean intelligence. I mean, when you come to work, I’d like for you to have less on you, not more. I want your life to be good.

 

Ally: I like that you bring that up from, like, a humanity standpoint. Because relating that back to this question, I think that’s a perfect example of when you as an employer might want to step back and look at different options that will work for your office or your business or whatever it is. You know, this specific example, you already offer health benefits. This employee didn’t want it. But if you’re having multiple employees ask this or if you are someone who doesn’t offer health benefits –

 

Paul: And you want to put your big toe in it.

 

Ally: Yeah and people are asking for more money since you don’t offer that. As an employer, you know, that’s hard to bring someone in when you don’t offer something like health benefits. That’s a big thing that employees are looking for.

 

Paul: Wait a minute. I want to restate what you just said because you are moving to the next thing. As an employer, as a small employer, even as a medium employer, the work that it takes to get health insurance for your team is a lot.

 

Ally: Yes!

 

Paul: You don’t just pick up the phone and do it. It’s a lot of work. For many practices that have, you know, 3 to 5, eight, nine in employees, they don’t have any extra room in their head. That practice has no extra room in its head to have someone spend the 47 hours it takes to spend to get health insurance in place, keep it in place, administer it and renew it every year.

 

Ally: Yeah. I think that sometimes employers think that their only options are health insurance or no health insurance. There are a few other options and CEDR has a really great health benefits guide that we’ll link with this podcast that kind of breaks everything down for you. It actually talks about health care stipends and they’re a little bit kind of a brief overview of what we’re talking about on here, but it also gives a couple of other options outside of just a standard health insurance plan, which I think before…If you’re considering something like a stipend or increasing an employee’s pay before you do any of that, go review that guide. Go review that option. If you’re a CEDR member, call us because this is something that our advisors are really good with giving, you know, we’re not health benefit experts, so we can’t tell you the exact thing to do or the kind of logistics of how to do it. But our advisors are really good at kind of laying out the options and helping talk through what the employer is looking for, what they are struggling with and how they can address that.

 

Paul: Yeah, and health insurance is no exception. So I wrote down these points. Ally, it’s going to stun you that I actually prepared for this. I wrote down these points. I’m going to roll through them real quick so that we can get to our listener question. So point one, you don’t have to offer an alternative to everyone who chooses not to participate. You just don’t have to do it. At CEDR, I can just tell you we highly recommend that you don’t just give us the alternative as some kind of a stipend, and we’ll get into why that’s a problem. Well, that’s the next point. How brilliant –

 

Ally: Got into that perfectly!

 

Paul: That was really quick. Technically, if you just simply give someone a stipend for health insurance, it’s a violation of the ACA, and the rule says that it’s $100 per employee.

 

Ally: Per day.

 

Paul: Per day for violating the ACA and basically what they were trying to say is, is that if anybody has health insurance, we want it accounted for in plans. We need to understand at the federal level and so that we can relay this information down to the state level and even, you know, look at how successful or not successful the ACA may have been. We need to know who’s covered and how they’re covered. So just giving people an extra $150 on the side and say, “You do with that what you want,” does not really meet that criteria at all. So that’s why they want the penalties in there. You don’t want your whole team trying to go without insurance to get more money out of their paycheck. I mean, we already kind of covered that. The net effect of a pay raise…A stipend, right?

 

Ally: Yeah.

 

Paul: The net effect of that is that it’s no longer tax deductible as a business expense and they have to pay taxes on it. You have to pay your matching taxes on it.Then ultimately, if you’ve got a small team and you guys have been working some extra overtime, you’re actually adding to your overtime because you’re raising the base rate of pay for that employee. Again, I would submit that after I think it’s three months, nobody remembers that extra $150 or $200 are getting in their paycheck, which frankly is going to be quite a bit less, right? It’s going to have a lot less impact on them because it’s being taxed so they can’t do as much with it. You know, it can look like someone’s being penalized for actually needing health insurance. It’s kind of a twist on this. It’s kind of the other side. The conversation here isn’t, “I make less money because I can’t negotiate for more because I actually need health insurance, and so I’m being discriminated against by not getting the same amount of money that they have. Because they’re getting more money and they have health insurance through their spouse. That’s not fair to me. So I should get more money and I should get health insurance coverage,” and if you’re listening, shaking your head, you can trust me that this argument has been made many, many times.

 

Ally: Oh yeah.

 

Paul: An employee is like, “This isn’t fair,” and you have to kind of talk them down and go through the process with them. So, you know, we’ll end this with a couple of little questions. Maybe the employer should have done a separate line item stipend. I mean, we’ve seen it. This is why this has come up. I’ve seen this come in from an accountant. A CPA won’t do this because they know the rules, but I’ve seen this coming from the accountants saying, “I got you covered. I’ll do this extra line item thing.” And that’s the same thing that we just talked about before. The stipend isn’t a stipend. It’s just more income as it comes in.

 

Ally: It doesn’t matter what you call it.

 

Paul: No, and if you put in there a stipend for health insurance, you actually are violating the ACA. You’re actually providing evidence if somebody were to drill down and start looking at pay stubs and say, “Hey, what’s the stipend for?” You’re immediately in trouble over this stuff. You know, I want to address this: Is the Health and Human Services police out there auditing all of our practices and looking at everybody’s pay stubs to see who’s doing stipends here and who’s doing stipends there and who’s violating anything? No. That is not what is occurring. So sometimes the logic is, “Well, if nobody’s looking, why can’t I just do this? Because what are the chances that I’m going to get caught?” Well, I don’t know what the chances are you’re going to get caught, but how about we just go with, you know you’re going to put a seatbelt on? If you put a seatbelt on, it’ll keep you in the car when you have an accident and you won’t be spinning around on the inside of it, killing other people while the car is spinning around. You don’t say to yourself, “Well, I wonder if…How about if I go with an alternative to that? I don’t wear my seatbelt.” Because that’s the alternative that we’re looking at. Either you have coverage or you don’t. Right? So there is a way we kind of touched on a little bit where people can put a plan together that is not going to health insurance. You don’t go to Blue Cross Blue Shield or whoever or I was going to say something bad about a former health insurance company. I don’t think I can do that. We have too many listeners. It rhymes with midnighted self.

 

Ally: [laughing]

 

Paul: You don’t have to go to one of those, you can create what is known as a bona fide QSERA plan. You guys will have it in the link to this podcast. So we’ll have some links. So basically what you’re able to do is, is this is one of the last things that President Obama did on his way out the door is he put this plan in place, because he recognized that there were a lot of really small businesses who want to contribute all or something towards their plan, but they don’t have the capacity to do that 50 hour a year dedicated person who understands health insurance. So they want to put something in place where employers who wanted to could help to the degree that they can help at that point and, you know, I think of startups, I think of all kinds of businesses out there. CEDR for the first nine years, we had to use a state plan to get anybody into it because at the time the ACA wasn’t passed and we had someone on our team who had cancer in her past – By the way, under the old rules before the ACA, that was a death sentence for her, and not because she had cancer. She had cancer and she recovered underneath her health insurance plan. But then the health insurers said, “No, you never get covered by anything. You don’t get covered if you break your ankle. You don’t get covered in preventative care. You don’t get anything from us anymore and if you do, we’re going to charge you more than you could possibly spend.” And then inside of a company, all the companies would get hit with this stuff, even though they weren’t supposed to literally use that information, it was really tough. So in the QSERA plan, you go to a third party, they set it up for you. You make the contribution into that plan and then your employees are required to use that money in order to buy their own health insurance and administer their own health insurance. There are some really good third party people out there who interact with your employees. You don’t even have to do it. Once you’re in the plan, they get their little piece of the action and then your employees go to them if they have any trouble with their coverage or their prescriptions and stuff like that.

 

Ally: Yeah. We’ve seen a lot of employers have success with that, who have reached out for options.

 

Paul: I think you can fix your costs. That’s one of the difficult problems with putting a bona fide health insurance plan in place is that as you renew, you have no idea what’s about to happen. Because I can remember we had years when the  current company who was covering us, they wanted to go up 35% on their cost. So we needed to go up on our contribution to help everybody out and then everybody still had to pay more. Then the next thing you know, you’re spending all of that 47 hours just trying to get three more alternatives so maybe you can get your health insurance cost down. So, yeah, this whole thing’s a mess. I didn’t realize that I was going to get to say this, and I think I’ve said it to you before, maybe on a podcast a long time ago. I wish I wasn’t in this at all as ya’ll’s employer. I don’t understand why health insurance comes through the employer. I’m fine finding a way to get me to pay for it like taxing me for it or I’ve got a payroll tax or something that I have to. I’m not trying to get out of the cost of doing it. That’s not what I’m saying. I just don’t think I should be involved in it. I ought not be able to go to the Supreme Court and exclude someone’s health care based off of my religious views and you know why? Because I shouldn’t even know what you’re doing. It has nothing to do with work. So I hope in the future we can get this stuff out of the purview of work and get it out there where people can just get into health insurance when they get it.

 

Ally: It’s such a, like you said, it’s such a personal –

 

Paul: It’s weird.

 

Ally: It’s a personal thing.

 

Paul: You guys have to kind of tell one of somebody on my team what’s going on with you or raise your hand and say, “You know, I don’t know if you know this or not, but I’ve got X, Y, Z, and the plan you’re proposing doesn’t cover Rx. Can you look at something else?” And that’s not what I want either. I mean, I just don’t need to know those things. Okay. Did we cover everything?

 

Ally: Yeah, I think we did.

 

Paul: We did pretty good on that. Okay, so everybody, don’t just give someone a raise. Let someone negotiate for it. If you have, you have, and that’s just where you are. Just know you’re not going to be able to claw it back. So if you just gave somebody a raise, not a stipend towards health insurance, because you cannot by law require them to prove to you that they are using it for that unless you’re inside a bona fide QSERA plan, alright? Ally, we’ve been getting a bunch of listener questions.

 

Ally: We have.

 

Paul: So you guys are finally doing that. So in the end, when we tell you where to send your questions, please send your questions because it really is helpful. What was this week’s listener question?

 

Ally: Today’s listener question had to do with unemployment. So we had someone reach out and they said, “Whenever I close down my office, I have one employee that is always filing for unemployment. Is there anything I can do about this?”

 

Paul: Anybody can apply for unemployment. Everybody can apply, whether they get it or not is a different story.

 

Ally: I could leave here right now and just go apply for unemployment. I probably won’t get approved because there’s pretty solid evidence that I’m working.

 

Paul: That you’re continuing to work and everything else.

 

Ally: Yeah, but I can go apply.

 

Paul: Yeah, you can.

 

Ally: Anyone can.

 

Paul: Yeah. You can go apply. The conditions around unemployment are basically that the employee is ready to work and there is no work available from you. Now that can manifest in a lot of different ways including in terminations and stuff like that comes into play. We’re not going to go down that rabbit hole. If an office just closes out of nowhere, an employee can go and make a claim. Now, many states have waiting periods. So if that closure was for five days or even as many as ten or 12 days, you may still not qualify because there’s not been enough closure there.

 

Ally: Right. Missed days of work for the employee.

 

Paul: Missed days of work for it. You know the way to completely kill this? It’s called advanced planning and communication. So if you give two weeks of paid vacation but you close for four weeks or maybe even six weeks for any given reason, we see a lot of very legitimate reasons. Hunters, I’m talking to you. I got plenty of doctors out there who take extended time off, close the practice in their community and they go hunting. Still occurs to this day. There are people who go on missions. We have quite a few people who go to other countries and communities and they give their time and even some employees go and do just this incredible volunteerism. That can be another reason why the office may close.

 

Ally: Yeah, or some people just have like, I remember seeing a Louisiana handbook one time and they closed for like two weeks during Mardi Gras.

 

Paul: Exactly. We can’t close for it, but we have what’s it called?

 

Ally: Rodeo.

 

Paul: Yeah. We have rodeo days here where the schools actually close. I think we’ve talked about it before, but we don’t close CEDR for that, but we do end up with children in here all of those weeks. An exception to the don’t bring your snotty kids to work rule. So the way to get around this is to…The best offices do it the following way: Coming in the beginning of January, you communicate to everybody that it’s, “Hey everybody, it’s time for us to talk about what weeks we’re going to be closed. Don’t forget, you might want to save your two weeks up because we’re going to take four consecutive weeks off this summer and this is what I’m going to be doing. You can either use, save up your two weeks and take your vacation during that time or not. That’s up to you, but this time will be unpaid unless you have something to go for it.” Also, in the offer letter to the employee, when you bring them on, (being careful about how you write offer your letters everybody), but you tell this is part of the job, this is part of job description. This is what we do. We have this much benefit. This is how many days we take off. This is, you know, you can even communicate why because that might be important to you and that just kills this claim, because you already know you took the job under the conditions that this business will be closed for two weeks out of it.

 

Ally: And you, like you said, you’ve prepared so you’ve given them enough notice that the employee can figure out whether they’re using vacation or whatever logistics they have to take care of.

 

Paul: And then I’ve seen a hybrid whereby the practice has been doing this for so long, and again, these practices that get this right are usually smaller practices because they kind of know the fixed cost of doing this. They put together a second kind of scheme which continues to pay the employees through that closure period. It may be a lesser amount of money, but they have vacation and they do get paid for the two weeks that the business is closed. What I like about that is that sometimes there’s conditions placed around that, which is the only way we can do this, guys, is if we are super efficient. Our numbers hit these things. We have to be, you know, X, Y and Z has got to happen, and the team just works towards that common goal, which is I’m going to still get paid. I’m actually going to get paid for the time that I’m off, you know? The business has it figured out. None of them are that hard when all of them take a little bit of extra effort. Anything else on the unemployment thing that we have here?

 

Ally: No, I mean, I think the direct answer to the question is, is there anything that I can do about this? Is what you just said. You can plan ahead. Otherwise, no. The employee has a right to file for unemployment, whenever they want. Again, there’s a whole separate board that’s going to make that decision. You don’t have any real say in whether they are going to be granted unemployment or not.

 

Paul: Well, this question seems to indicate that this keeps happening kind of over and over and over again, which if you are the listener who asked this question, what you need to do is just recognize that you were going to be taking this time off, make it part of a bona fide program and go ahead and communicate it and I’m not saying you have to pay the days. You just need to let somebody know that this is what’s going to occur. You can do it, believe it or not, with your current workforce going forward. This is one of the cool things about policy. This is a policy. It’s perfectly legal. You can put it in place in writing and it’s basically saying, “This coming year or, you know, this is our new policy on when we’re going to be closed and what you can do with it.” It’s just a memo and a policy that goes out to everybody and explains this to them and that can put a stop to the unemployment claims as well. On the other side of this, let them have it. You’re paying into it anyway. If it’s just one employee claiming unemployment every now and then because you needed to close for some extra time or whatever it looks like, maybe for personal reasons. I mean, we’ve had doctors get sick and they need to close the practice to go to finish up treatment. We’ve just had situations where the practice really needs to close for a period of time. They just let them go collect it. It’s not going to be that brutal on you. It’s not going to make your unemployment insurance go up. Alright. Thank you for sending in your questions and Ally, always a pleasure. I hope everybody listened. Today was a learning day.

 

Ally: It was a learning day.

 

Paul: Today was a learning day on the What the Hell Just Happened in HR?! podcast.

 

Ally: Thanks, Paul.

 

Paul: Thanks.

 

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