9 Steps to Minimize Employee Risk
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From Dental Insights, Fall 2019
By Wasif Khan J.D., L.L.M., Lance Jones J.D., and Julieta Kosiba J.D.
For many dentists, their role as employers is often overlooked, taking a backseat to their role as healthcare providers. The two roles should not be viewed, however, as separate. Although employees can be your greatest asset, they can expose you to liability as well.
Hiring the right employees and hiring them properly will assist you in regulatory compliance and mitigating risk, whether that be with regard to potential malpractice claims, workplace violence or harassment, or HIPAA violations. This article addresses some specific areas of concern for practice owners to consider as they try to balance business ownership with patient care.
What to Ask and How to Ask
Before going through the due diligence process and/or making an offer, there may be several questions you want to ask, outside of the interview itself. For example, employers have historically asked prospective employees about their salary history before making an offer. However, there is a trend for jurisdictions to enact laws that ban employers from doing so. Thus, avoid questions about current or past salaries. Instead, focus on setting salaries relative to the market and inquiring about applicants’ expectations or what they would be willing to accept.
And, even before you determine what salary you are willing to offer, you will need to make certain that the prospective employee can actually perform the job that you are seeking to fill. In thinking about whether the prospective employee will meet your expectations, you may be tempted to inquire about limitations or disabilities, children or sick family members that are being cared for, or pregnancy. However, you should not ask questions about any of those topics or you run the risk of being sued for discrimination.
Rather, focus on inquiring about whether the individual can, with or without accommodation, perform the essential functions and hour requirements of the job.* The job-related requirements should be in writing and part of the job description.
In general, background checks are an important tool that can help an entity ensure that it is hiring individuals that will not damage its reputation or expose it to liability. Background checks are particularly crucial in the dental industry given concerns for patient safety, unauthorized use/disclosure of information/records, access to controlled substances (especially true for OMFS practices) and regulatory compliance. They must be handled correctly though.
Prior to conducting background checks, you should have a policy that spells out:
- When and/or for whom background checks will be conducted.1
- What information will be sought as part of the check.
- Who will conduct the check and the process that should be followed.
- Which guidelines should be followed for handling background check records.
Any policy that is adopted should comply with applicable federal, state and local laws and should be applied consistently. All steps, including proper disposal or secured retention of records, should be documented.
To avoid potential discrimination claims, as well as potential negligent hiring claims, conduct background checks on all prospective employees. However, you may, and in some cases, should, consider requesting only particular classes of information relative to certain classes of jobs. If you are a small(er) practice, or a larger practice where job roles are strictly adhered to, you may be okay with only requiring background checks on certain employees as a way to minimize costs and avoid unnecessary procedural steps.
It is recommended that you include Social Security number validation, screening for aliases, a criminal records search, social media investigation, education and work history verification, and registry (sex offender, child abuse, elder abuse, etc.) searches.2 Additionally, the following checks may be necessary:
- Motor vehicle records for individuals who will be operating company vehicles or driving during company business.
- Credit report for positions that involve the handling of money or authority for transactions involving large sums—unless otherwise prohibited by your state’s law.
- For any position requiring a license, the prospective employee’s licenses should be verified and you should check for any adverse action in any state.
Moreover, if you participate in federal healthcare programs, such as Medicaid, a condition of participation requires ensuring that no employees or vendors have been excluded from participation in such programs. Accordingly, you should conduct a Fraud and Abuse Control Information System check (which should include a search on the Department of Health and Human Services Office of Inspector General exclusion list). Similarly, if you are extending ownership or partnership interests to dentists, a more comprehensive review of tax filings may be warranted. Analyzing financial information seeks to deter potential for financial crimes (embezzlement/fraudulent billing).§
As for the timing of background checks, you must check state and local law. Many jurisdictions have adopted fair-chance laws, which seek to delay inquiries about conviction records until later in the hiring process. These laws include but are not limited to “ban-the-box laws” (laws that prohibit asking about criminal convictions on initial employment applications), which are becoming increasingly common.
Many organizations elect to use third parties to conduct their search; oftentimes, this is the more efficient route for obtaining accurate information. It may also decrease the chance that you will encounter information about a prospective employee’s protected characteristics. If you do not use a third party, it is recommended that the hiring manager not be the one to conduct the background investigation, particularly as to any social media investigation which may reveal any protected characteristics.
When using such third parties, be mindful of the Fair Credit Reporting Act (FCRA), which aside from certain exceptions, applies to any communication from “a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” for, among other things, employment purposes.+ The FCRA imposes requirements on what you must do before obtaining a background check and disclosures that you must make before denying any employment on the basis of background check results.
When analyzing background check results, it is recommended that you use a panel of employees (if possible) to mitigate potential scrutiny. You should provide them with written guidelines that focus on job-related criteria that are consistent with business necessity, and, obviously, exclude consideration of any protected characteristic. Consult the EEOC’s Enforcement Guidance and legal counsel in developing these guidelines/policies. In smaller practices, it is likely that the panel will consist of the owner/dentist and another trusted employee.
Background checks are a critical component of due diligence measures to ensure that you are hiring the right employees. A checklist should be used to keep track of your prehire due diligence process. A checklist does not supplant the need to document the activities performed for each individual step, which will be useful, and even critical, in the event that any employment dispute arises in the future. Proper documentation includes retaining copies of initial, completed job applications and any prehire questionnaires.
Reference checks from other employers will often times get you the critical information by asking two simple questions: Why did this employee leave? Would you hire her/him again? You should also be aware of those employers who take offense when good employees decide to move on to further their careers, and try to reconcile what the employee told you with what his/her past employers tell you.
In addition to background checks, you should consider reference checks and drug testing, at least for those positions that involve access to controlled substances or entail responsibility over patient safety. Given the recent trend for states to legalize medical, and in some places even recreational, marijuana, you must carefully assess exceptions to any drug testing policy.
As of now, marijuana is still deemed an illegal drug under federal law, and, thus, its use (medical or otherwise) is not afforded protection by the Americans with Disabilities Act (ADA).3 However, certain individuals may qualify for ADA protection for past drug use.4 State law varies. An exception to a drug policy for an individual’s medical marijuana use for the treatment of a disability may be required as a reasonable accommodation5 or a medical marijuana statute may prohibit discrimination against medical marijuana users.
You should consult counsel on the status of your state’s law. Any drug testing policy that is adopted should be applied uniformly and indiscriminately. Additionally, consider waiting until after a conditional offer is made before testing as to avoid legal issues in the event that the testing raises disability-related issues.
Due diligence requires you to additionally verify the prospective employee’s eligibility to work in the United States. The Immigration Reform and Control Act of 1986 (IRCA) prohibits you from knowingly hiring any undocumented immigrants and requires you to properly and timely complete Form I-9 for all new employees. You may also be required by state law or federal contract to verify the employee’s status through E-Verify.
The loss of key employees can be destabilizing to a dental practice for three primary reasons:
- Productivity loss.
- Financial loss (industry experts suggest the financial loss associated with an employee can cost up to two times their annual salary).
- Potential patient dissatisfaction.
Modern dentistry, while it has focused on metrics and statistics, still revolves around the relationship between a patient and his/her dentist, which can be damaged by the loss of key employees. You have to routinely check on the pulse of the practice and responsibly maintain and empower staff.
Generally speaking, in the dental industry, staff turnover should not exceed 15% per year. This may vary a bit by staff size—for example, losing one staff member will have a greater impact on a staff of five than a staff of 100. This is especially true for dental practices; in our experience, good dental practices tend to have employees with service time exceeding five years.
Conduct an assessment of your staff turnover for the past three years, noting how many left, why they left and the new position they took. Get into the habit of conducting exit interviews with departing employees so that you can maintain a list of this information.
Exit interviews allow for a confidential, honest assessment of an employee’s experience at the practice, their reason for leaving, and an invaluable critique about the work environment; and, most importantly, they help put staff turnover in perspective.
Your practice is and should be viewed as a constant work in progress. You should actively try to improve any identifiable areas of concern. Moreover, one of the best things you can do is to cross-train staff members in order to avoid a practice slowdown in the event of a loss.
This will also help your staff get familiar with different aspects of the practice and appreciate the work of others. You can do this by periodically rotating staff, without forcing them into permanent roles (especially if they don’t like the new role).
Additionally, cross-training may help you identify any performance issues. For example, it will enable you to evaluate how different employees perform the same job, providing insight as to whether the person typically assigned to the position is best suited for that position or whether he or she could use additional training or be assigned to a different position. Likewise, by bringing in employees from other areas of the practice to a new position, you will create an opportunity for those employees to assess the work of the employee that is traditionally assigned to this role. This can be beneficial in catching employee misconduct, such as embezzlement discussed below.
Preventing Staff Turnover
Staff turnover tends to be a result of one or any combination of the following four factors:
- Better pay
- Professional growth
- Team member conflict
- Respect and appreciation from employer
There are a number of industry pay scales you can check to ascertain the industry average. Merit-based pay increases tend to be better than seniority-based pay increases in keeping staff incentivized.
Pay raises are not the only way to reward staff and keep them happy. Consider other tokens of appreciation, particularly when tied to length of service, such as extra days off. Similarly, invest in training and work on developing positive relationships and camaraderie, such as through office retreats where staff can work on developing professional skills and have fun.
Most importantly, don’t hire someone just to fill the position. Find the right person! An ounce of prevention is worth a pound of cure. If you spend time in finding the right employee, show them some appreciation and help them grow professionally, you will see improvement in staff turnover rates.
Rogue employees, defined (very loosely) as employees who don’t follow rules or try to do more than what they have been asked to do, can create significant problems for your practice, especially if there are no consequences. When employees don’t listen to you or follow practice procedures, a lack of consequences serves as a tacit approval of their behavior or shows that you, as a practice owner or office manager, don’t pay attention or care about the practice.
Instead of avoiding the situation, talk to the rogue employee. Your first approach should be to assess if there are other external factors that may be impacting their behavior. If a good employee all of a sudden starts disregarding rules or doing things beyond their role, it could indicate outside issues are distracting them from work. By talking to the employee, you can help them find solutions for the external factors. Likewise, if they long to find their role more fulfilling, you can honestly discuss with them the changes that would help them stay at your practice.
If the issue relates to serious matters, such as patient care or theft, or involves a pattern of violating policies/procedures, immediate consequences (termination) are warranted. Some dentists have been slow to implement electronic prescriptions into their practice. In one instance, a dentist was forced to report an employee (a family member no less) to the FBI due to the employee writing fraudulent prescriptions for herself and her husband. The dentist had to file a police report and change her DEA number. Another dentist employed a dental assistant who was subsequently arrested for dealing drugs—while the assistant’s actions did not specifically impact the practice, there are enough concerns relating to public relations, employee/patient safety and insurance company oversight that termination was warranted.
Owners can’t expect to benefit from the “rogue employee” defense if the practice/owner knew and did nothing. The need to curtail rogue conduct provides yet another reason for why it is important for you to stay alert to employee issues and activities in your practice. Lastly, if your rogue employee is a member of a “protected class” or you feel the situation is a bit more involved and complicated—contact legal counsel first; you may create a much larger issue by improperly terminating an employee.
Reporting Criminal Activity
In the event you identify criminal activity, whether it be embezzlement or some form of fraud and abuse, what do you do? Talk to your malpractice/business insurance provider and your lawyer! You should absolutely report financial crimes to the police, and you must walk through any possible fraud reporting obligations with your lawyer.
By reporting such activities, you help to:
- Remove bad actors from seeking employment elsewhere (since criminal charges show up on background checks).
- Limit the financial impact of fraud on the larger marketplace.
- Set yourself up for possible recovery of embezzled funds through insurance claims.
It is crucial for every employer, particularly a dental provider, to thoroughly vet its employees. Consider performing background checks and conducting drug tests to make sure you are hiring the right people. Conduct routine staff audits to identify how to keep the right people while staying alert to employee behavior so that you can appropriately address any rogue conduct. Your employees and your employment practices have a direct impact on the health of your practice.
1 15 U.S.C. § 1681a(d)(1)
2 James v. City of Costa Mesa, 700 F.3d 394 (9th Cir. 2012)
3 42 U.S.C. § 12114(b)
4 See Barbuto v. Advantage Sales & Mktg., LLC, 477 Mass.456 (Mass. 2017)
* As further explained, it is recommended that you conduct a background check on all prospective employees. If, however, you choose to conduct a background check only on certain (non-discriminatory) categories of prospective employees, this should be outlined. Even if you choose to conduct a background check on all prospective employees, though, this should be documented in the policy.
+ Many employers also find verification of references to be beneficial. A reference check can be a good way to confirm education or work history while getting another professional’s opinion of the prospective employee. For example, you can gain insight into the prospective employees’ character, his/her strengths and weaknesses and/or whether the prospective employee gets along with others in the workplace. If, however, you do a reference check, remember that questions about protected characteristics are still impermissible. Moreover, before conducting any reference check, you should obtain permission from the prospective employee to generally conduct a reference check. If the prospective employee explicitly asks that you not contact a person, you should not reach out to that individual. Likewise, you should not contact the prospective employee’s current employer unless expressly permitted by the prospective employee.
§ If you are a Medicaid heavy dental practice, you must ensure that your associate dentist(s) go through a thorough background check. Fraud and abuse initiated by associate dentists can have significant impact on your practice’s ability to participate in federal healthcare programs. At a minimum all associate dentist employment agreements should have a provision allowing you to recover any compensation paid to them based on collections received for fraudulently provided or billed services.