Health Care Employers Can Reap Big Benefits From Employment Reviews

Updated on April 11, 2014

Patricia FarrellBy Patricia E. Farrell

All it takes is one medical assistant who doesn’t report the time she spends finishing her charting after hours.  Or a receptionist who takes phone calls while she eats lunch at her desk.  Or a nurse supervisor who fails to report that one of the nurses is being harassed by another staff member.

All of these situations can lead to employment lawsuits, and each case can cost a health care employer $50,000 to $250,000 or more.

One way that hospitals, physician’s practices and other health care employers can protect themselves is to conduct regular employment reviews.  During an employment review, someone with thorough knowledge labor and employment laws and regulations, typically an attorney or team of attorneys, will analyze the company’s current employment practices and office environment to identify potential liabilities that may lead to a lawsuit.

Depending on the needs of the business, an employment review will typically cover all or some of the following areas:

Wage and hour issues

The Department of Labor estimates that approximately 70% of companies don’t fully comply with the Fair Labor Standards Act, which sets wage and hour requirements that employers must follow.  Wage and hour lawsuits have skyrocketed in the last 20 years, and health care employers have been one of the top targeted industries.

Some common mistakes that violate wage and hour laws include:

  • Incorrectly classifying workers as exempt from overtime wages.
  • Failing to keep proper time records.
  • Allowing hourly employees to answer emails or do other work tasks “off the clock.”
  • Failing to pay hourly workers for staff meetings or training programs that take place before or after their normally scheduled hours.

Employee policies and documents

During an employment review, reviewers will review all written materials given to employees, such as employee handbooks, hiring agreements, confidentiality agreements, employee termination documents and other similar documents.  The reviewers examine the documents to ensure that the content and exact wording of the documents don’t leave the employer vulnerable to a lawsuit

Some examples of common issues that may be addressed include:

  • Does the employee handbook have a clear policy for reporting harassment?
  • Does the company’s social media policy appropriately protect the company’s reputation without infringing on employee’s individual rights to discuss their workplace conditions?
  • Does the handbook make promises about employee benefits or perks that the employer may not be able to keep in the future?

The review will also make sure that any required documents related to employee safety and employee rights are displayed in the office, as required by law.

Personnel files

Reviewers will review the company’s personnel files to ensure that the employer is collecting all necessary documentation, such as employment applications, resumes, immigration documentation, disciplinary notices, attendance records and other similar information.

In addition, the reviewers will analyze personnel files for patterns of discrimination, including unintentional discrimination.  The reviewers will look for consistency in giving promotions and raises and disciplining employees to ensure that the company is not showing signs of discrimination based on gender, race, religion, age, ethnicity or any other category prohibited by law.

Employee interviews

Interviews with the employees are often the most valuable part of an employment review.  Because outside attorneys conduct the interviews instead of a boss, employee interviews may reveal huge liabilities of which the employer may be unaware.

For example, employees might report that they feel pressured not to report overtime hours.  Female employees may reveal that they think men in the office get paid more and promoted more often, or vice versa. Or hourly employees may reveal that they often check email from home without overtime pay.

Employment reviews generally are not expensive, but they could save a health care employer tens of thousands of dollars in litigation costs and payoffs to employees. Regular reviews, for example once every three years, may also lower insurance costs, because companies with up-to-date employment policies and practices are less risky for the insurance carrier.

Patricia E. Farrell is a partner at Pittsburgh-based law firm Meyer, Unkovic & Scott.  She focuses her practice on a broad range of legal matters related to corporate and business law, and also has substantial experience practicing real estate law.  She can be reached at [email protected].

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