Your practice could be at risk without a legally compliant employee handbook

Physicians take great care, and significant effort, to build their practices. Many practices, however, are exposed to potential liability and financial disaster concerning employment law issues.

There are easy steps that practices can take to avoid this exposure (the proverbial “ounce of prevention”), and yet many do not. This is the first in a series of articles regarding employment law issues affecting medical practices. This article focuses on employee handbooks.

Workplace rules: Put them in writing

Workplaces have rules, and employees are expected to abide by them. If those rules are unwritten, any employee discipline is subject to challenge, and the burden will be on the employer to prove the rule was, in fact, clearly articulated and consistently applied.

David Lichtenberg

With the steady increase in employment regulations, at the federal, state, and even local levels, and attendant employment litigation, it is imperative for employers to implement legally compliant employee handbooks. Handbooks set forth company expectations, educate employees on what to expect from the company, and memorialize policies that shield a practice from liability.

What regulations cover your practice?

The first step in implementing a compliant employee handbook is having a clear understanding of the federal, state and local employment laws that apply to a specific practice. This determination will depend on a host of variables such as the complexity and nature of the practice, size and location. Regardless, every practice should address the nature of the employer-employee relationship and whether the relationship is at-will (meaning the employer has the right to terminate an employee with or without cause at any time for any reason, and the employee has the same right to resign). Handbooks must also state that there is no intent to create a contract. The language of these policies must be drafted in a clear, concise and prominent manner in order to ensure its enforceability.

Amanda K. Caldwell

In addition, certain federal and state employment laws, as well as the federal Fair Labor Standards Act (federal wage/hour law; “FLSA”), Uniform Services Employment and Re-employment Rights Act, and Fair Credit Reporting Act (which governs, among other issues, background checks; “FCRA”) will apply to every medical practice regardless of its size. Every handbook should contain a legally compliant equal employment opportunity policy prohibiting all forms of discrimination, harassment and retaliation and providing employees with a structured complaint procedure to bring concerns to management and a promise that such concerns will be immediately and thoroughly investigated and, where necessary, remediated. These policies should also address the practice’s compliance with federal/state disability laws applicable to qualified individuals.

Fairness begins with a framework

In order to comply with the FLSA and various state wage and hour laws, handbooks should set forth policies pertaining to employee classifications, time keeping, payment, rate of overtime pay (if applicable), bonus policies, work schedules, breaks, time off and attendance. Medical practices have been targeted recently by attorneys who file lawsuits based on improper employee classifications on the wage/hour front. Handbooks should also contain policies pertaining to drug testing and background checks in order to ensure compliance with the FCRA. Medical practices are sensitive in this area, given the access to prescription pads and medications. Larger medical practices will also need to include policies that are compliant with applicable leave laws, including the federal Family and Medical Leave Act and the federal Americans with Disabilities Act. When doctors are sued for allegedly failing to provide accommodations to individuals with medical issues, juries have very little sympathy for the health care professional on trial, if a situation was mishandled.

Don’t leave behavior expectations to chance

There are other key policies that a handbook should include. For example, every employee handbook should outline standards of conduct, setting forth clear expectations as to how employees of the practice are expected to conduct themselves and perform. Where applicable, employees of the medical practice should also be reminded of their legal obligations when certain activities are regulated by a government agency. Disciplinary policies explaining how violations will be handled are also recommended. Such policies place every employee on notice of an employer’s legitimate expectations and provide clear guidance as to how disciplinary and/or performance issues will be managed and documented by the practice.

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Don’t overlook health, safety and social media

Medical practices in particular should also include policies pertaining to occupational safety and health compliance, social media and computer technology. Failure to have such policies in writing makes it difficult for a practice to defend against wrongful termination actions. It also makes it difficult to justify to a reviewing board or governmental agency that the practice took the proper steps to ensure compliance with applicable regulations.

A carefully drafted handbook will not only assist a medical practice in ensuring compliance with the increasingly complex intricacies of these various federal and state laws, but it will deliver protection from lawsuits, assist in effectively managing employees and facilitate the overall successful of the practice. It is far too risky in this day and age to be without one.

Amanda K. Caldwell, JD, and David Lichtenberg, JD, can be reached at Fisher & Phillips, LLP, 430 Mountain Ave., Murray Hill, NJ 07974; 908-516-1050; email: acaldwell@laborlawyers.com or dlichtenberg@laborlawyers.com