Episode 99: Why Every Practice Needs A Good Employee Handbook

Paul: What happens, particularly in dental, is people borrow a handbook from another practice, which they say, ‘My lawyer looked at this’ or whatever, and the next thing you know, they borrowed something really bad. It’s kinda like borrowing a toothbrush. You don’t know where it’s been. You know whose mouth it’s been in. You don’t know anything about that toothbrush.

And it could be carrying something with it, like a misclassification of hygienist that makes you think you don’t have to track their hours and pay them overtime, and you borrow that misunderstanding from someone else. Now it’s your misunderstanding. And this is something that can get you sued, can get you penalized, can make you have to pay back pay and penalties, and I could go on and on and on.

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 topic to talk about whatever I want. Think Barbecue. Space exploration. Growing your business. The things that interest all of us.

Paul: All right, before we start the podcast today, I want to welcome you all to my 100th episode. I’m going to do something kind of self-serving today. I’m going to tell the story about how CEDR was formed and why we started doing HR and employee handbooks. I’m also going to kind of highlight how important employee policies and handbooks can be to a small to medium, to even a large business. There’s value there. There’s legal protection there. But I think more than anything, it puts everybody on the same page so everybody knows what is expected of them. The difficult part here is, is that there are so many laws in so many areas, like from state to state, even from city to city. In some states, the laws change. That would impact your employee handbook. And so it’s very difficult to self make an employee handbook, but we find that a lot of businesses try to do that. And I’ll talk about that a little bit more in the episode.

Kim: So Paul, what I was curious to know is that, you know, I’ve been here for a while now and I’ve learned a lot while I’ve been here. But one thing I’m not sure of is, what brought you into making sure that everybody needed or wanted handbooks that helped protect them?

Paul: That’s a good question. I mean, the way I got into this was sort of what’s the word I’m looking for? Happenstance, serendipitous maybe. Maybe that’s a better term for why we do what we do now here at CEDR. I want to preface this, I guess the story I’m about to tell everybody with I used to own a couple of live music venues and manage touring bands. What that eventually led to was I started with three or four or five employees and the next thing you know, I had 12, and in the end I had like 60 of them. And so I have a lot of experience with employees and managing people and managing situations that I shared or I currently share with a lot of the people who are listening right now. Meaning that we all have employees and we have problems come up and we try to use, try to use our common sense and create good policies and solutions to the problems that come up. And that’s where an employee handbook comes into place. I was actually working with a law firm who were tasked to start creating associate agreements. And the reason why I was brought in to do this was one, I was available, but two, I had a lot of experience negotiating contracts and I understood business in a way that really most attorneys and folks don’t understand. And so when you put together an agreement with an associate, it’s kind of a mini version of an HR agreement. You have to address all sorts of things. Like are they eligible for benefits? If they are eligible for benefits, what are they? And then we have to get into their compensation and then we have to get into what is their authority.

And there’s just a lot that goes into an associate agreement. So while I was working on an associate agreement with a dentist, he asked me a question. The first question was, ‘What do you know about HR?’ And I said, ‘Well, I know a little bit about HR, do you have a question?’ And he said, ‘Yes. You know, you’ve been great working with me on all this stuff. I just assumed that you probably do employee handbooks and policies and stuff like that.’ And I said ‘Mhmm.’ He told me that he had an employee who’d been out on maternity leave. And after being out for, I think eight or nine weeks, she was letting him know that she was wanting to come back, but that there was a problem. So I asked him what the problem was, and doctor told me that the problem is is that after she had been out for a while, a bunch of things had come to light. They weren’t great and folks weren’t happy with this particular employee. He was wondering if he could not bring her back. You know, he would just say, ‘Hey, never mind, don’t come back.’

But I think somewhere in his mind he understood that that could be a problem for him, because he had someone on maternity leave and she’s pregnant and she’s probably protected by some kinds of laws. So as a result of that, I said, ‘Okay, let me take some time and get you an answer.’ Asked him if he had an employee handbook and what the employee handbook said about maternity leave and when someone had to return. I also asked them where the employee handbook came from, you know, for a few details about what the problems were with the employee. First things first he was working with a large, one of the largest payroll companies out there, and if I told you who it was, you would recognize the name. And they were the ones that gave him an employee handbook as part of his payroll services and stuff. And they said, you know, ‘Don’t worry about that. We got you covered’. And they included it as part of the package. He sent the employee handbook over to me. And when I looked in the employee handbook, what I found was was there was literally no maternity leave policy in it whatsoever. So there was no communication to an employee. So lesson number one, one of the good things about having a properly written policy in an employee handbook is you can set expectations for people. They can be you set expectations around being late and what could happen if you got in trouble. You set expectations for things like this, which is you have a certain amount of time for maternity leave and upon return you have to go through some steps to get verified that you can come back to work. That’s just how it works. Everybody knows before anybody goes on maternity leave what needs to happen. I asked him, ‘Also, did you get in touch with your HR people over at the payroll company?’ And he said, ‘I don’t even know how that works. I mean, they told me I could call if I had a problem. I did ask a couple of questions. The salesman gave me the answers’. The payroll company had not established any kind of a hotline or a group of experts or anybody to answer the questions. So I grab his employee handbook, I get their phone number, the payroll company, and I start calling and I leave about 14 messages. And it takes me about two weeks but I finally get somebody to call me back. But they don’t talk to me. They just leave a message on my answering machine and they answer my questions sort of. They say, ‘Well, the doctor has less than 15 employees, and so he is not required by state law to give maternity leave. So we don’t put maternity leave in the employee handbook.’ And for everybody listening that is just, that assumes that nobody in a small business is ever going to have a pregnant employee who needs to go on maternity leave. It’s just, it’s just as tone deaf. And tone deaf is what we find a lot out there in policies that come from some of these major payroll companies, because they don’t really understand how small businesses work. Anyway. We make a determination that he doesn’t have the policy in place. He has not been able to set any kind of an expectation. And now we have this employee coming back in. But I do want to tell everybody that there was some protections there for that employee and that not bringing her back and firing her while she was trying to come back from maternity leave may cause some legal issues. And I’m not going to go into the details. He’s less than 15 employees, so it’s less legal issues. However, the optics of doing that with the other women that work in the practice and everything else that comes with it, probably not very good. I reached out, got some more guidance, went to the law firm that I was working for with the associate agreements, and I asked them for help, a whole batch of lawyers. And they just looked at me and said, ‘We’re not employment law attorneys’. So one thing led to another. They helped me out. We located an employment law attorney and he gave me a bunch of good guidance and explained a bunch of stuff about policies. And that kind of really opened up my understanding of why policies and laws are important and the reason why I could relate so well. Again, having a handbook and setting some rules and expectations was that when I had 60 employees, by the time I closed and sold those businesses, you know, this is over 20 years ago, everybody. I hated it. I hated having that many employees. I hated all the problems. I didn’t understand why the business and everybody would be perfectly good one day and not the next. It was just a very frustrating experience for me. I endured that as I grew those businesses for like 15, 16 years. And so I have a real connection to the need for small business to tamp down the craziness, try to get everybody on the same page. And I understand how difficult it is to focus on the things that really matter to you, to you as an owner or manager, when you are being distracted by all of these other things that are these human interactions with the employees and the folks that work for you. And so I think a big part of leadership is establishing how you want the business to run culture. You know, all this stuff that we could talk about today, which I’m not going to go into, but it all needs to be built on a foundation. That foundation is your employee handbook. And then the thing that I want you to take away from this as I go in further into the episode is, this is not a do-it-yourself project. There’s some legal protections out there if you don’t understand what they are and how to access them, you’re going to mess it up. And so as I go into the episode here, little self-serving hundredth episode, I hope you enjoy.

Paul: And so that’s how we were kind of born, as I recognize that there was something missing and that the more that I looked into this, I began to understand that the laws are different in every state. They’re different for the number of employees you have. And the reason that no one really like us existed before in the way, in the manner that we exist today was because it’s hard.

Kim: Sure, a lot of things to track.

Paul: Yeah, because, you know, the original lawyers that I were talking to, that I was working with, they said, That’s impossible. ‘There’s no way anybody can put something together where you would know all the rules everywhere and be able to answer the question’. And that’s actually not true. But I will confess that it takes time. And that’s what we have under our belt here at CEDR. So it takes time to figure out all those things.

Kim: Build that up, definitely. How do businesses figure out all those different rules for themselves?

Paul: Well, they really have tried. Somehow it got out into the entrepreneurial world because everybody who’s listening, if you’re a doctor out there or manager of a practice, you’re in an entrepreneurial world. You really are. You’re a small business. And there is this do-it-yourself mentality, and it’s a really good idea. I think it’s a lesson I learned from somebody really smart. I don’t remember who it was, which was don’t pay someone else to do something until you’ve done it yourself and learned a little bit about it so that you can see if your, you know, your money is being used wisely. So you can understand what your strengths and weaknesses are.

Kim: It’s hard to make sure things are running right if you don’t know how they’re supposed to run, right?

Paul: A little bit like, you know, we’ve seen that over and over again out there in the world. Somebody gets given you know, from venture capitalists like millions of dollars, and then they just run the company. You know, they run the idea right into the ground and don’t execute on it. And I contend that, I think most people understand this, because they have too much money. They’re delegating things out that they aren’t keeping control over and understanding of making adjustments on.

Kim: Sure. That’s an interesting thought.

Paul: It’s kind of, it’s kind of an interesting thing. It’s you’d bet you’d be better off if you had no money to advertise scraping out, let’s say, $50,000 over the year as opposed to someone giving you enough money that you could hire someone else to do it for you initially, and you learned nothing from.

Kim: I mean, definitely. I managed a small business for 15 years and I had to learn how to be a plumber. I had to learn how to do all kinds of things because it just sometimes things needed to get done and there wasn’t always somebody to call to help.

Paul: And so I’m going to imagine, Kim, at some point you realize ‘I shouldn’t be doing this’. Like you spend the day trying to fix something and you’re like, ‘I’m not a freaking plumber. This is beyond my ability to plunge.’

Kim: And it’s taking me ten times as long as it would take a normal plumber. And I have 10,000 other things to do, definitely.

Paul: And if nothing else, may not save you any money to hire someone else, but you would at least be doing the things you need to be doing and not focused on that. Which leads me back to the employee handbook thing, and everybody wanting to do that kind of do-it-yourself thing. So that’s what I found out in the industry. You know, big companies trying to use the same handbook for everybody. So a dental practice would get a handbook from a major payroll company, and it would not mention HIPAA. And it, and because they were small, the big company wouldn’t put anything in there about maternity leave because they’d say, ‘You don’t have to give maternity leave.’

Kim: But employees still get pregnant. Even when you have five of them.

Paul: You can’t just say, ‘Hey, we’ll just let you go because we don’t have to keep you when you get pregnant.’ That’s not the way that you know, it’s not a good way to do business. Nonetheless, it’s not a good way to retain good people.

Kim: That’s not how we build a culture, for sure.

Paul: Yeah. So they were leaving out everything that they could leave out. So all they were doing is stripping things out and not caring. So the cat grooming company, the people who groom cats, were getting the same handbook as the practice. And unfortunately the practice was getting the same handbook as that. And I want to make this point to everybody’s listening out there, I swear you’re special. Because here’s the thing: when we look at a lot of companies out there, their goal like, let’s just use, I don’t know, retail, for example. I’m not saying they don’t want to keep people, but they kind of see them a little bit as disposable.

Kim: More disposable, sure.

Paul: And it’s you just need to teach them a certain set of skills. Like if you have someone who’s working the cash registers at McDonald’s, you just have to teach them a certain set of skills. I’m not saying they don’t cross-train to run the fryers and fill in other places, but still it’s a limited number of skills. When you run a medical or a dental practice, your employees are learning skills constantly. There’s constant change. There’s all sorts of things that are coming into play. And you end up with a lot of different people holding specialized knowledge in different places because it takes a Herculean effort to communicate with insurance companies and get your money back out of them by example. And so I think, you know, we’re playing a bigger game in health care. We’re playing a much bigger game. That’s kind of the story. We realized that they were not being given a good product when they were sold something. We realized they weren’t getting any training. We realized that they were doing a lot of self work on it. So they had gotten this idea that this do-it-yourself model was something they could do with an employee handbook, because quite frankly, it’s kind of entertaining to get into an employee handbook and start making rules for everybody.

Kim: Oh, sure.

Paul: Because you get to get into it. You get to put your outrage hat on and be like, ‘I want to make a rule up about this and a rule about this. And gossiping, and this and this’, and you just get in there and you really try to address all the problems that occur in your business, in your employee handbook. And by the way, good thinking. So this is, again, back to the title of why are employee handbooks good? It’s so that you can get everybody on the same page.

Kim: Really gives you a solid foundation to stand on.

Paul: Exactly that. So I say this all the time in courses when I’m teaching at universities and stuff. I tell these young soon to be graduating doctors, ‘You can’t hold people accountable and build a practice and lead people if you’re not going to build it on a foundation of your own accountability’.

Kim: Definitely.

Paul: And so in the do-it-yourself model, the problem there is, is that we’re dealing with laws and regulations that are constantly changing. They’re different from place to place. What happens, particularly in dental, is people borrow a handbook from another practice, which they say, ‘My lawyer looked at this’ or whatever, and the next thing you know, they’ve borrowed something really bad. It’s kind of like, it’s kind of like borrowing a toothbrush. You don’t know where it’s been. You know whose mouth it’s been in. You don’t know anything about that toothbrush and it could be carrying something with it like a misclassification of hygienist that makes you think you don’t have to track their hours and pay them overtime. And you borrow that misunderstanding from someone else. Now it’s your misunderstanding. And this is something that could get you sued, can get you penalized, can make you have to pay back pay and penalties. And I could go on and on and on.

Kim: Sure. So what you’re saying, Paul, is that there’s going to be… there could be some legal ramifications here if somebody doesn’t get it quite right.

Paul: Yes. When you put it in your own words and make your own employee handbook, you get asked that in front of a judge. Where did this policy come from and who made it? And if you say if you raise your hand, say, ‘I did it’. There’s no hiding from that. No hiding from making that kind of mistake.

Kim: No screen to hide behind when you’re the front man.

Paul: Not when you’re the front man, you know, to go to that even more, another good reason to have a well-written employee handbook is that there are actual legal protections in there for you. We talk about this burden shifting idea which starts with you want to help them help you. The they/them in this particular instance are the Department of Labor Wage and Hour, EEOC and different government organizations whereby which complaints get filed through before an attorney can sue you over it. And so if a complaint comes about pay, helping them help you, them being the Department of Labor Wage and Hour, is being able to show them that: A. your handbook properly states who’s an exempt and nonexempt employee, your employee handbook and your practices within your business. And this is very, very important, your practices show that you understand what your overtime rules are at the federal and if there are different rules about pay and overtime in your state that you understand what those are. And Kim guess where you could make that declaration at?

Kim: Where Paul?

Paul: In an employee handbook, in the policy!

Kim: Oh of course, of course.

Paul: So when you are able, with the way you’re helping them is one, you’re going to have records, you’re going to have good time keeping records that reflect your understanding and your book reflects that you have an understanding and the shift happens is when that enables them to kind of come in and look at the, look at the… look at the bookkeeping and stuff and say, ‘Well, these records look good. We don’t see that there wasn’t time paid’ and turn back to the people filing the complaint and say, ‘You’re going to have to do more here. You got to provide what specifically, what specific accusation are you making against this practice?’ So it’s kind of pushes it back over on their side, which, by the way, their side, the other side wants to do as little bit of work as they possibly can, even though we have, I have lots of lawyers for friends of lawyers in my family. I was married to a lawyer for a while, lovely woman. Just out in the real world, folks that lawyers don’t want to do a lot of work. They’re not in it for the justice or anything else. They’re in it for the billable hours and they love to be able to send a demand letter and have a lawyer on the other side respond to the demand letter and offer some kind of settlement or all of the money to make it go away and finish it off in the background. Nobody wants to do a bunch of research. Nobody wants to show up at the courthouse. Nobody wants to spend days arguing over a case and doing depositions and doing those things. I’m not saying, maybe that was too general. I shouldn’t say nobody. It would be better if you were a lawyer if you didn’t have to go through all of those things.

Kim: Maybe we could say nobody in Paul’s circle wanted to do that.

Paul: They’re good people but I know I wouldn’t want to do those things. And so having good policies in place that are well written helps you help them. I’m going to just take us back to that.

Kim: So to really just show that you A. understand the laws that you have to abide by and shows that you’re doing all the, checking all the boxes you need to check, doing the things during the day.

Paul: And you don’t have something like the following… because you’re frustrated, because you have been frustrated in the past, Kim. And you’ve talked til you’re blue in the face and you’ve warned people about working overtime without prior authorization.

Kim: 100%.

Paul: And you keep finding people working overtime. And at the end of the year, your accountant pulls you in and says, ‘You know, you could have made an extra $52,000 a year last year if you would just cut out all this overtime’.

Kim: Which is painful to hear, isn’t it?

Paul: It is very very painful to hear, especially when you’ve been complaining about it over the years and it still keeps reoccurring. Now look everybody, not everybody who works overtime for you and gets things done is doing something nefarious. That’s not, you know, that’s not what we’re saying. But when you’ve been telling people that they can’t work overtime and you get frustrated and you go into your employee handbook and you change the policy and say ‘If you work unauthorized overtime, I will not pay you’, you just gave a gift. That’s not legal. That’s not true. You can fire someone. Well, it is true. You could not pay them. You can fire someone for working unauthorized overtime in a heartbeat, but you can’t not pay them for the hours that they work. And so that’s not helping them help you because if they come in, Wage and Hour, and see that in your employee handbook, and if the attorney on the other side sees that in your employee handbook now you have a giant chink in the armor that is your, that is your policy.

Kim: Sure, you put it in black and white that you’re, you’re going against the law. So that, that’s a troublesome place to be in for sure.

Paul: Hey, everybody. I really like to be transparent when I do these kind of breaks. This is literally a promotion for the other company that I own’s employee handbooks and their policies. I’ve got Britt with me. Britt, give me the, give me the challenge and I’m going to try to help solve this real quick.

Britt: Yeah. So we got a question come through and it was about how office managers are not feeling too confident about enforcing their policies. They’re scared of their employees.

Paul: So the first thing I want to say about this is that they should be scared. And the person who should be scared is the person who has either through their payroll company or through borrowing a handbook and policies, has created their own employee handbook. The reason why I say you should be scared in that instance is because invariably, if I go through your employee handbook and give it a thorough evaluation and I will find all kinds of missing and incorrect things. For example, you tell everybody no gossiping, that’s not legal. You tell everybody that if they work overtime, they won’t be paid. That’s not legal. I could go on and on and on about the common sense policies that people create in their head and give to their employees that are not legal, that do not comply with the law. And so it is important that you have really good policies. And so that’s the first thing. Make sure that you have really well written for your state, number of employees. You have everything figured out, Britt. That’s the first thing. From there comes confidence. So now once we know that we’re within our legal rights and that we’re reasonable and that we’re communicating clearly and that we’re not, you know, that we’re not putting anything in there that could get us into trouble at that point now it’s time to use the policies not just to help because they’re great. They can, they can answer questions if they’re written well, like they can tell someone how much maternity leave they’re entitled to based off of a certain set of circumstances. And they can tell employees what they have to do when they come back from maternity leave and they can explain to employees what you’re sick time and your paid sick time policies are. And I can go on and on and on in those areas as well. On the other side of that, they also create what I call the bumpers. If you guys know where the bumpers are, that’s when you go to a bowling alley and you put the bumpers up and, you know, you’re just trying to keep the thing in the center. It’s kind of a wide swath, but at least you’re putting up a set of parameters, which is how you speak to one another, being on time, professionalism. How many days can you take off before it’s actually going to start impacting the entire team? Why do you have to be thorough and accurate in your recordkeeping and all of the other things that can come up each day. So the pitch here is, is we recognize how hard it is and we recognize it’s not always fun. And so not only can we provide you the basis, which is that platform and all those policies are properly written that reflect your culture, reflect who you are, reflect how you want things to go. But on the other side of it, when push comes to shove, we can stand there quietly behind you and we’re kind of like that bouncer. You know, when you’ve got that person at the front, at the door or in the club and they’re being a butthead and they’re acting like they want to push back and they don’t want to. They don’t want to, you know, kind of get with the program. And then all of a sudden you see them kind of calm down. Well, we’re that bouncer in the background now. They don’t see us. They see you. And we educate you, we empower you, we give you the right conversations to have with people so that you can get good results. So there’s no reason to be fearful in the end. And in order to be effective, you have to not have fear. That’s my pitch for CEDR Solutions and a good employee handbook.

Kim: All right Paul, so that brings me to my next question. It’s got me wondering, are there things that have to be in an employee handbook?

Paul: Everybody Kim’s just being nice because Kim already knows the answer to this. She’s loading this one up for me. Yes Kim. There are things some states require that you notice employees about certain aspects of their job, their rights, and what they’re entitled to. California comes to mind, everybody likes to beat up on California. They are not standing out there alone. Several states require you to provide things to your employees in writing. As far as again, what I said, you know what their rights are. So, yes. Yeah, there’s absolutely things that have to be in an employee handbook or you got to give them 27 addendums that state all those things. And I mean, so I mean, at that point, what’s the what’s the use?

Kim: So Paul, the other day, as we were kind of prepping for this podcast, you had brought up, maybe we should try to get a hold of some reasons as to why employees don’t like handbooks. And I’ve talked to a few of the advisors around the Solution Center, and I did get some feedback regarding reasons they’ve seen.

Paul: Oh do tell. Well, look, I get it. I see all kinds of things. I see we- look, everybody, we monitor all kinds of social media threads out there to see what’s going on, not to catch anybody or anything. But we want to know what the what’s going on out in the world, in the world of employees.

Kim: What people are talking about.

Paul: Well, we’re trying. Yeah, we’re trying to help. Our members are good people. You want to know what they’re thinking, what their concerns are. And so what did you find Kim, why do employees typically get frustrated by employee handbooks?

Kim: So one of the big things that I heard when I asked this question to our advisors is employees find it incredibly frustrating when either management has policies in the handbook but they don’t follow those policies, or management has no idea what policies are even in their handbook and they’re not abiding by them. So that can be incredibly frustrating. We hear that a lot.

Paul: Well, and I’m going to take it down on another level and maybe spoiler alert for something else you’re about to say. But I think it’s even more so they apply the policy to one person and not to another. So they’re just not consistent. And so they’ll let someone be late all the time.

Walk down on somebody else for being late. Lack of consistency.

Kim: And it’s hard to be consistent when you don’t have policies to follow.

Paul: When you don’t have a policy at all, you won’t be consistent.

Kim: Sure, definitely leaves it up to interpretation. Another point that I thought was funny that we hear a lot is that employees, the feedback that we’ll get from employees is that they don’t like handbooks or they don’t they don’t like to read the policies. They don’t want to take the time to read and digest what-

Paul: It’s like a waste of time.

Kim: Sure, they see it as a big waste of time

Paul: And they feel like they’re being treated like kids

Kim: 100%.

Paul: It’s like a rule book that’s been shoved in front of them.

Kim: Definitely something they have to follow, they have to read. Most handbooks that we’ve seen, you know, usually aren’t a couple pages long. So it takes some time for sure.

Paul: It does take some time to read it.

Kim: And then probably the biggest complaint that I heard was that employees either don’t like the policies or they don’t agree with them.

Paul: Right. These are good things to bring up. And I think that’s particularly the case when you’ve been operating in a business and you’re an employee and then someone drops an employee handbook on you and says ‘This is the way it’s going to be going forward’. But I have to say this to everybody out there, as much as I feel for the employees, have been one myself and reading an employee handbook and having to sign it, and probably, if I’m honest, not liking a few of the things the way they were worded or what they said in it, you have to follow the laws.

We’re in a society and a legal society where by which there there’s some structure out there that employers have to fit into in order to one: protect themselves and two: follow the letter of the law. So I’m going to give an example. I’m trying to think of a really good example here where employees say, here’s the one that they hate the most. If you, the consequence. So consistently throughout the book you have to say ‘If you continue to do something, if you violate this policy, it could result in something, some kind of corrective action or even termination’.

Kim: Sure, I’m familiar with that language, I think.

Paul: And you know, it doesn’t feel good. It really doesn’t feel like a good thing. It feels threatening. But the problem that we have as people who do this, this sort of thing, is that if you don’t have that language in there, you will be asked by either a judge or an unemployment adjudicator: ‘Did you inform them that they have to be on time every day?’ and you would say, ‘Yes, we have a policy’. And the next question will be, ‘Did you inform them of the consequences?’

Kim: Sure, okay.

Paul: And if you can’t say yes to both of those things, you’re you’re in trouble. And then the third thing that you need to have in these instances is did you inform them of the issue and can you show me they knew that they were in trouble? So it’s here’s the policy what you have to follow here are the consequences, acknowledgment and kind of a reinforcement of it saying, ‘Hey, you’ve been late a lot. If you continue to be late a lot, you’re going to probably get fired for it’. You have to put those three things in place and it all starts in the employee handbook.

Kim: Laying out to make sure there’s no surprises.

Paul: And this follows everywhere. So this is, again, some of the protectionist portions of your handbook, like ‘if you’re not being paid properly, you must inform us. If a manager asks you to work and tells you not to clock in, you must inform us. If you are being sexually harassed or harassed in any way around these parameters. In this employee handbook, you have an obligation to tell us so that we can address it’. So imagine what happens if you have that policy in place and someone’s worked for you for three years and a lawyer asks in a deposition, ‘How long have you been harassed?’ And the person under deposition says, ‘This has been going on for two years.’ And then the lawyer says, ‘When did you first inform the practice that there was a problem with this associate doctor?’ And as an employee, you answer ‘I never told them’, they have a problem because they were under an obligation to let somebody know. And I’m simplifying this, but they were under no obligation to let somebody know that there was a problem and that there is something going on.

Kim: So in a sense, maybe we’re kind of shifting the liability here in a sense.

Paul: We’re really trying to shift the liability in a very fair way. I also want to say that over this 20 years, we’ve probably helped billions. Billions is the new million. That’s what I’m saying. Okay Kim?

Kim: I’m here for it.

Paul: You’re here for it. So but look, lots of money has gotten into employee’s pockets because doctors or managers didn’t understand the overtime rules and weren’t quite doing it right. And if you look at overtime, and we’ve got 3000 members and there’s 40,000 employees out there, when we make a correction and get somebody to understand what their obligations are and it results in more pay, it’s good for it’s good for the employees. There’s a lot of protection in a well-written employee handbook but if you do it yourself, the risk that you have is that you’re going to put something in there that’s going to actually get you in trouble in your own words. And you just need to know if you’ve got five employees, you’re not subject to some of the rules that if you have you have 15 or more employees. If you have 50 employees, you’ve got more obligations that don’t apply to anything below you. And if you’re in California, the damn city that you’re in could have different rules that the county that surrounds it.

Kim: It’s making me wonder, you know, you shared earlier that those larger companies in the beginning who you had seen were helping with handbooks and kind of-

Paul: And not doing a great job.

Kim: Not doing a great job, what would happen if if I’m an employer in Texas and I borrowed a book from California? And I have, you know, all the California language in there. Would that cause me problems?

Paul: Yeah. Yeah, it would cause you problems because inevitably you’re going to subject yourself to some rule and agree to a rule that doesn’t apply to you, and it’s going to be quite onerous. So we’ll give a good example. And we’ve seen this, Kim. We used to see it a lot more, but I still see it. They borrowed a handbook out from out of state. We’ll just use California as an example and subjected themselves to the daily overtime rule, which does not apply in Texas. The overtime is all ours. Over 40 and during a workweek go down that rabbit hole right now, but it’s a completely different rule. The other thing is, is that typically California requires some notifications. We used them as an example earlier. And if you borrow those notifications, you’re also going to borrow the acronyms for the state agencies that are in California, because you don’t understand what the acronyms mean. You don’t even understand the purpose of the policy. And you didn’t need to, frankly, because you brought it over from another state. And now what you’ve just basically said to to a lawyer who’s looking to see you is ‘I’m an idiot when it comes to HR. And that’s reflected because my handbook is so bad’. And by the way, Kim, you know this because you do evaluations of handbooks that come from the outside. This happens all the time. Somebody will be working in four states and they’ll fold it into their product and say, ‘We’ll provide you an employee handbook’ because they don’t have this understanding of the employee handbook that we do. And the next thing you know, you can see they have three different states tucked inside the handbook because they just haven’t gone through and done the corrections they’ve done. Most importantly, they didn’t understand that Texas employer at all. They really didn’t understand what their obligations were. They’re not, you know, kind of connected to that part of the process. It’s like a handbook is a handbook. And that’s just not true. It’s just not true.

Kim: Definitely. I see FMLA policies come through when I do handbook evaluations and a lot of times the employer..Exactly. And it’s not there. They don’t have a state FMLA policy or regulations. It’s just they’re making something applicable to them that shouldn’t be.

Paul: No, and it’s quite onerous to give somebody 12 weeks off, if you’re a small practice. We all know you can’t go three months without somebody in your practice when you have six employees and one of them goes missing, you got to support that. And if it’s a medical reason, you want to help them out. But still.

Kim: But if you’re missing your insurance coordinator and that’s the only person who does that, that really causes some problems.

Paul: Yeah, it really does. So you don’t want to give extra time unless you make that decision and decide like we have here. We give extra time. But you know, the other side of that, I’ll just jump on my soapbox for a moment is when you get pregnant, when a woman gets pregnant and goes on leave, her pay typically stops even though even under the FMLA. Now there are some states have put some kind of cool insurance programs in. And there’s something that Aflac can do for you, if you’re if you have it, if you have that insurance in place a year before you get pregnant. And there’s some ways to offset all of this. But I just want to say to everybody out there, typically most employees need to get back within eight weeks because they’ve got all the bills, diapers and rent.

Kim: Everything’s stacking up

Paul: And it’s stacking up while they’re out, which I hate. I wish that we had some way nationally that we could support people to be out longer.

Kim: Oh most definitely. I took two weeks with both of my kids, so I get that.

Paul: Oh Kim, I’m sorry. So, Kim, the only thing I think that’s left to talk about here is support. Like, you know, when I called those folks with a big payroll company and I couldn’t get through. So the other thing that we designed into this, into CEDR, into this, which is where all this started, and then we’ll let everybody kind of get off the podcast with us was we designed in both training and support. So there’s something that I figured out along the way, which was it was very important, the last stages of the employee handbook that we train them on what it is that we’re given. It’s like giving somebody a 15 year old car and not explaining to them, ‘This is the shift, these are the breaks, this makes it go. This is we all ride on the right side of the road’. That kind of basic understanding can be very, very helpful when you first start and put in an employee handbook and you own a business because it’s also the area where we begin to examine how your, what you pay practices are. Are you paying people properly and really a myriad of other things. There’s just a lot of training that can go on there. And so we do training as we go through the final phase and it can last for a good amount of time. But no one gets an employee handbook out of CEDR without the training.

Kim: It’s really important you have to know how to use it or if you’re really useless, you know?

Paul: And that leads me to another thing I want to make sure I don’t forget these two things that are important. So if somebody gives you an employee handbook and they don’t go through the training with you and through and like you need to spend a couple of hours with them asking questions as the owner of the manager of the practice so that they can explain to you why you can’t have what you want exactly that you heard that you wanted in a particular policy, but maybe how you can get the outcome that you’re looking for.

Kim: Some version of it.

Paul: Has to be some version of it. So you need that kind of thing so that again, with someone looks in from the outside and read your book, it’s in support of you. Isn’t doing any damage. Then the next thing is, is how do you handle these very human issues? So we’ve been talking a lot about compliance. But on the other side of this are these high value employees that we invest a lot of time and effort to find, hire, train, hold on to. They’re getting some of the best pay in the country. They’re you know, they’re very, very valuable. And the next thing is, is how do you work with these humans? Because one person really appreciate you being really direct with them and telling them and the next person, that’s not the best way to communicate with them.

Kim: Sure.

Paul: And so you still need to get a good outcome. That’s the kind of thing that we put in place so that managers and owners have somebody to talk to who isn’t focused on anything else. This is an expert that understands the compliance issues, knows this, who this practice is, knows where they are, knows which laws do and don’t apply to them. And now we’re trying to get a human outcome. We’re trying to get a really good the best human outcome that we can get. And, you know, sometimes that human outcome is is this isn’t going to work out. And we probably need to let this person go, which takes us farther into the sport and back towards the legal side, which is we’re helping document. We’re making sure that we’re being fair. I hate letting anybody go. I hate it. I hate it. I hate the whole process.

Kim: It’s uncomfortable.

Paul: It’s uncomfortable. It’s you’re affecting people’s lives. But I feel better when I know that I’ve been communicating clearly to them in saying, this is what we mean, this is what we’re shooting for. This is the skill that we’re looking for you to improve upon. This is the thing that we need you to do. And we’ve been clear. And then it’s not so much a surprise.

Kim: Yeah. Ensuring you know, that everybody’s on the same page leading up to it so that if a termination does have to take place the employee’s probably not going to be surprised about it. No, probably more like a ‘Yeah I understand. I’m sorry’.

Paul: Yeah. And then, you know, the last thing is, is that a well-written employee handbook that’s made available to the employees? It’s self-service. They don’t need to ask how many weeks they have off for maternity leave. They can go to the book and find out. They don’t need to ask if they’re going to be paid for a holiday. If they don’t normally work on that holiday, it’s in the employee handbook. They don’t need to ask what the consequences of being late 74 times during the year is. They know, they find out in the employee handbook that their birthday is not a national holiday to the practice. Or maybe it is. You know, it’s up to you, Doctor.

Kim: Sure, we’ve seen handbooks go both ways.

Paul: They really go both ways. So there’s a lot of self-service. I love it when people are like, ‘Do we get paid for the Friday after Thanksgiving?’ And I answer, ‘I don’t know. I know it’s in the employee handbook. Why don’t you go look at it and tell me what’s going on there?’ Kim, it’s been a pleasure. I hope everybody out there kind of understands now the importance of employee handbooks and why it’s not great for them to be self made. They really are an important part of running a small business. And I’m, obviously I’m a big fan because that’s what we do and that’s how we feed our families around here. But you know, we’ll take over 12,000 calls. Our HR experts will take over 12,000 calls this year and answer questions that are really centered around things that are almost always directly related to the employee handbook.

Kim: I mean, not to pull this in at the end, but I think that’s probably a really important reason why all of our members need to have one of our handbooks, because it’s hard for us to help support you without a solid foundation.

Paul: That’s another good point. A lot of them come to us and like, ‘Can’t you use my employee handbook that I already have?’ and the answer is, no, we can’t. We can’t give you a quick answer. We’d have to charge you by the hour. And now you’re talking about, you know, hundreds of dollars every time you want an answer to a question. So that’s that’s a big part of our our secret sauce here is we know what’s in your employee handbook and we know how to help you out. And that’s what you should, that’s how it should for you and your manager. You know, you guys have to know what’s in it. Got to, you want to follow it. You want to know that it’s legal and compliant. You got to keep up with all the laws are changing. We just had huge changes in laws across the federal system right now. And when I say the federal system, I mean federal law change that impacts every single employer in the United States. This just happened a couple of days ago. So all of these things are a lot to keep up with when what you’re really you’re as a listener, you’re managing a medical or a dental practice. You’re not an HR expert. And that’s something that’s just another matter.

Kim: Those laws are ever changing. We have a whole department dedicated to those laws. And how can a practice manager expect to do it themselves? Yeah, definitely.

Paul: Okay, Kim, hopefully we gave everybody food for thought out there. I appreciate you and I know you’re doing the one doing the evaluations right now on all the books that come in. And I know you’re seeing all kinds of crazy cool stuff. I hope you’re enjoying it. It’s a great, it’s a great way to learn employment law.

Kim: There are a lot of fun. It’s probably one of my favorite things.

Paul: You’re the only person who’s ever said that in the history of the world. Thank you, bye.

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