5 HR mistakes that lead to legal exposure

You do not want to lose everything you've worked hard for to own your own dental practice because of a human resources infraction. Here are some important tips to keep you out of legal trouble as an employer.

Sep 22nd, 2016
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With all of the work you've put into your education and starting your practice, the last thing you want to hear is that you can lose it all over something as (deceptively) simple as a human resources gaffe. But the truth is that human resource mistakes can sabotage much of the time and effort that you've spent toward creating a successful practice. While you cannot protect yourself 100% from all claims at all times, you can take steps to avoid certain practices that can put your business at risk.

Here are five HR Mistakes that lead to legal exposure.

1.Improper or missing new hire documentation—When you hire a new employee, there are a number of documents that must be completed and retained, as well as documents that should be provided to new staff members. These include I-9 documents, arbitration of disputes agreement, W-4s, direct deposit forms, background check authorizations (if applicable), and employee handbooks, which are highly advisable for any-size practice. Failure to provide or maintain any of these forms can put you at risk of an audit, or can leave you open to legal claims in the future.

2.Failure to provide lunch breaks—Are you aware of the lunch break requirements set forth by applicable federal and state laws? If not, then you need to be. Providing lunch breaks is not as simple as allowing your staff to consume their lunch at an allotted time. You need to know the rules as to whether your employees are allowed to leave the office for lunch, as well as what happens if an employee “works through” lunch or chooses to eat at their desk while completing paperwork, for example. Generally speaking, an employee who works five or more hours per day is entitled to a 30-minute meal break, while an employee who works 10 hours or more is entitled to a second 30-minute meal break. Employees must be permitted to leave the premises and cannot be forced to work during their breaks. Specific regulations vary from state to state, so you should consult an attorney or HR specialist to ensure that your meal break regulations are in compliance with all applicable laws.

3.Failure to pay overtime/improper employee classification—This is one of the most dangerous components of the human resources equation for any practice. If you improperly classify your workers and do not pay overtime when you are required to do so under the Fair Labor Standards Act (FLSA), you could be subject to fines and back payment orders, not to mention legal fees if you're forced to defend your practice legally. The best approach is to classify your workers properly from the beginning. Be very cautious about your classifications until you're certain that a worker is, in fact, exempt from overtime requirements. As of December 1, 2016, salaried workers who make $47,476 or less annually (up from the previous salary of $23,660) will be subject to overtime payments. While exemptions exist, the safest route is to presume that employees at or below this salary level will be entitled to overtime. (Also be aware that even those who earn higher salaries may also qualify.) You should consult an HR specialist or your attorney to ensure that your employees have been properly classified so as to avoid future disputes.

4.Failure to document infractions and performance evaluations—This is a mistake made by many medical professionals, and often with the best of intentions. Practitioners value their employees (as they should) and are therefore hesitant to make what they see as “a big deal” out of a simple or unintentional mistake. This is especially true when an employee who has violated a policy is one who is usually dependable and well-performing. But the best approach is to make note of all violations by all employees, regardless of how inconsequential the error or how highly valued the offending staff member. An accurate record of infractions helps maintain a consistent recordkeeping policy across the board, minimizing any arguments of favoritism among your staff. Plus, maintaining records will be essential should the need to terminate someone arise.

One of the biggest mistakes employers make is to seek to terminate an employee who has a history of policy violations, but no recorded annotations of infractions, warnings, etc. The termination process is immensely simplified when coupled with a strong record of violations. The same can be said of performance evaluations—the stronger your records, the more options you will have when it comes to termination, or for that matter, promotions. A good example is when an employee makes a discrimination claim based upon a termination or a failure to promote. If you have maintained records of that employee’s past violations or poor performance evaluations, you will be in a very good position to defend yourself against false discrimination allegations.

5.Improper termination—Termination is always an unpleasant process for all involved. However, separating from an employee can result in future complications for your practice if you terminate under improper circumstances. Terminating based upon policy violations or a history of poor performances is much simpler with supporting documentation (as discussed in more detail above). But any termination, even if well-reasoned from your perspective, can lead to potential discrimination claims by the departing employee, meaning that it is in your best interest to only terminate under the proper circumstances. Improper terminations can wreak havoc on your practice’s legal position, therefore, they must always be avoided.

Terminations are always improper if based on any of the following criteria: pregnancy, age, or disability.This does not mean that you cannot terminate employees who happen to fall under these categories. However, you cannot terminate them because of these designations. Terminating any employee who is pregnant, disabled, or of an advanced age is dangerous territory, and taking steps toward termination should only be done under extreme caution.

Double-checking your current HR strategies to prevent issues is always a good idea. Implementing an HR management system that both maximizes team performance and ensures compliance with employment laws is cheap insurance when building and maintaining your practice, and can help provide you with a healthy, lifelong income.


Ali Oromchian, JD, LLM, is the founding attorney of the Dental & Medical Counsel, PC law firm. He is also cofounder of HR for Health, which provides a cloud-based human resource management solution for dental practices. Mr. Oromchian is well known for his expertise in legal matters pertaining to dentists. He has served as a key opinion leader and legal authority in the dental industry with dental CPAs, consultants, banks, insurance brokers, and dental supply and equipment companies. He serves as a legal consultant for numerous dental practice management firms that rely on his expertise for their clients' businesses.

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