With Employees, Timely Documentation Is Key

It is too often the case that an employment-related dispute could have been avoided if the parties had just put the agreed terms in writing. An ounce of prevention is worth a pound of cure. The basic details of every employment relationship should be put in writing. Relying on what the employee and employer “knew” to be true after the fact are oftentimes an exercise in “he said, she said,” with each party recalling very different versions of what was promised, said and done. Timely and well-considered documentation of the employment relationship at all stages is essential to effectively manage personnel and protect your practice in the event of a legal claim.

Below is a checklist of the key documentation that you should have in place for each of your employees.

Employment Application

Relying purely upon a resume to learn about an applicant may leave some important questions unanswered. While an employment application will not ensure that you have perfect information—there are legal limits on what you can ask, and applicants tend to embellish their credentials—a well-designed form is a useful tool to ensure a standard baseline of information from each candidate. The basics include educational background, work experience, compensation history, the employee’s availability in terms of work hours and the employee’s compensation expectations. Questions about criminal history and physical capabilities are a bit trickier, and a legal counsel should vet any application questions concerning these issues.

Post-Offer/Pre-Hire Documents

If you require a background check and drug testing as conditions of hire, appropriate waivers for such requirements need to be secured after you select the candidate but before you formally hire him or her. In the event the background check or drug test reveals information that precludes employment, paperwork documenting the accuracy of this information is required. It’s a good idea to confer with legal counsel to ensure that these forms comply with applicable federal and state requirements.

New-Hire Documents

Once an employee has been hired, the employee’s contact information, tax information, employment eligibility verification (i.e., the I-9 form) and benefits elections need to be gathered. These documents are the beginning of the personnel file. An indication as to the starting wage should also be included. Many employers choose to document the initial terms and conditions of employment in an offer letter. Good offer letters lay out the baseline initial terms of hire while making clear that these terms can change at the discretion of the employer. Many offer letters include no such reservation of rights as to changing terms and conditions of employment, giving fodder to claims that the employee has a contract with set terms.

Employee Handbook

An employee handbook is not a contract. In fact, your employee handbook should state in conspicuous terms that it is not a promise of employment for any set duration and that it is subject to amendment at any time, with or without notice. Rather, an employee handbook is an important tool in establishing the terms and conditions of employment, which you can amend from time to time.

The employee handbook establishes important procedures governing the keeping of work hours, tabulation of wages, administration of paid and unpaid leave, lines of reporting by which employees can make their concerns known—including complaints of harassment and discrimination—and the process by which the employer will investigate and resolve those concerns. The handbook sets standards regarding confidentiality, work rules and attendance requirements. More generally, the employee handbook lends a sense of predictability to the employer’s expectations and serves the strong interest of making employees feel as if they are being treated fairly. Depending on the state, established policies regarding disability accommodation, discrimination and harassment, wage and hour compliance and leave administration are often required by law.

Job Description

Job descriptions are frequently overlooked when new practices are focused on setting up shop. The job description is the employer’s outline of the qualifications and skills necessary for the position, the essential duties and the physical requirements of the job. A good job description is normative insofar as it makes expectations clear to the employee. It also spells out important information regarding wage and hour compliance (e.g., is this an exempt or non-exempt position?), disability accommodation and workers’ compensation (e.g., what job duties can we eliminate so that an employee with a physical limitation can remain at work?). In many employment-related lawsuits, the central dispute involves the job’s basic expectations. The job description is your opportunity to document the objective requirements of the position.

Evaluation Form

While it is best practice for job evaluations to be done in person, all that remains from those meetings years later is the written account of how the employee performed in the past. Think critically about how well your job evaluation form captures an employee’s job performance. From a basic standpoint, everyone appreciates tangible feedback of performance in the workplace. Ask yourself: Does the job evaluation form speak clearly to your employees? Does it provide a platform to point out examples of jobs well done as well as areas that require improvement? Does it provide an opportunity to outline tangible next steps by which the employee can reach an appropriate level of performance?

Oftentimes, job evaluations involve scoring performance by non-meaningful numbers, for example, 1 to 5, with 1 being poor performance and 5 being excellent work. While scoring is tangible, consider carefully whether it captures the nuances of an individual employee’s job performance, and supplement these scores with written narratives as necessary. In the event of termination, job evaluations should tell the story of how clearly you pointed out performance issues. A comparison of different employees’ job evaluations should show that your expectations have been consistent.

Employment Agreement

Most employers are operating in jurisdictions in which at-will employment is the rule. Form agreements often skew that default rule, however. While the employee handbook and job descriptions are, by their nature, living documents that can be amended at the employer’s discretion, employment agreements that are not written carefully bind employer and employee alike. Accordingly, consider carefully whether an employment agreement is necessary and, if it is, what commitments you make. In some instances, employers find it is in their best interest to secure certain post-employment commitments through form agreements, such as limitations on the employee’s ability to compete with the employer (i.e., covenant not to compete), solicit the employer’s patients or reveal confidential information. The extent to which such commitments—often called “restrictive covenants”—are enforceable depends on the state in which the practice is located, or possibly the state in which the employee resides, if they are different. If you feel that enforcement of post-employment continuing obligations is a priority, then you should outline those terms at the time of hiring.

Keep in mind that your practice’s needs and legal requirements are bound to change as time passes. As such, your employment-related documents should be reviewed on a regular basis.

Steven M. Harris, Esq., is a health care attorney and a member of the law firm McDonald Hopkins, LLC. Reach him at sharris@mcdonaldhopkins.com.

Reprinted with permission from the American College of Rheumatology.