Originally posted in Today’s Veterinary Business, February 2018
Sexual harassment in the workplace must be dealt with promptly, fairly and firmly.
The #MeToo movement started last fall with claims of sexual harassment and rape against movie producer Harvey Weinstein. Before long, dark shadows were cast over other powerful men — from entertainment personalities Matt Lauer, Kevin Spacey, Russell Simmons and James Franco to politicians Al Franken and Roy Moore.
Although any accusation typically gets more publicity when a celebrity is involved, sexual misconduct occurs in all walks of life. What will you do — and should you do — as a veterinary practice owner or manager if an employee lodges harassment claims? What if the employee joins the #MeToo movement and goes onto social media to name names at your hospital?
If your team has a sexual harasser, your practice may be one complaint away from a disaster. How should your practice respond to the multilayered issue of sexual harassment? Do you know how to respond to complaints and proactively protect your practice?
Knowledge Is Power
First, take a good, hard look at your hospital’s sexual harassment training program and be honest with yourself. What is the quality of the program and how much effort do you put into it? If the program isn’t as well thought out and implemented as it could be and should be, you’re not alone, but improving it must be a priority. The training must pay more than lip service to the issue and must not be only a way to limit your liability if or when a complaint occurs.
Your program and policies must make a stand for respect and equality in the workplace, and you must amplify that by how you train, by how you communicate and by how you serve as a role model in your practice.
If you don’t have an anti-harassment training program, you need to create one now. It must be a top priority. You need to carefully craft harassment and sexual misconduct policies and procedures and share them with all your employees. Consider role-playing sexual harassment scenarios to give your team the opportunity to demonstrate and discuss the true impact of sexual harassment. If you don’t know where to start, consider hiring a practice consultant or human resources expert to construct a plan and conduct in-clinic training.
Your policies and procedures should provide multiple ways for an employee to report acts of harassment. If the only official avenue is for someone to go to his or her direct supervisor, how does it help if the supervisor is the harasser? This scenario, unfortunately, does happen.
Also have a plan for how you will follow through on complaints, and don’t rule out hiring outside legal counsel if appropriate. Once the policies and procedures are finalized, add them to the employee manual and go over them with the entire team. Review the policies annually, or more often if changes are made. Specific policies and procedures may vary by practice, but the bottom line in any document must be that sexual harassment will not be tolerated. It will be investigated promptly and addressed decisively.
Responding to Complaints
The U.S. Equal Employment Opportunity Commission requires prompt and proportionate corrective action whenever harassment is found to have taken place, with workplaces having both a legal and ethical responsibility to appropriately address complaints.
However, this does not mean that managers should assume the accused is guilty before an investigation has even started. Nor should assumptions be made based on gender — for example, assuming that men are the harassers and women are the victims. These approaches, in fact, are among the worst ways to respond. In today’s emotionally heated environment of almost daily news reports of sexual harassment, you must be fair to all parties and never punish a person based solely on an accusation or because of preconceived gender roles.
Step one is to take every complaint seriously and not rush to judgment. After you receive a complaint, promptly follow up and investigate thoroughly. Remember that anyone doing the investigating must remain fair and objective. Listen carefully to the complainant and assure the employee that retaliation for the complaint will not be permitted. Tell the complainant that if retaliation occurs or if harassment continues, you need to know about it right away and will address the behavior.
Document all discussions carefully, including the dates, times and witnesses to relevant events. When you inform the accused of the complaint, assure him or her that a fair and impartial investigation will take place and that guilt is not assumed.
Also, communicate regularly with the parties so they don’t feel ignored and explain that a rushed investigation serves no one well.
Once you’ve collected as much information as possible, use discernment in making the best decision you can about the complaint. Consult with an attorney to make sure you are looking at the situation appropriately. If the attorney has concerns about the investigation or the conclusions, take a good second look. You can move forward once the attorney supports your decision and reasoning.
Document all follow-up steps — from training to discipline — and keep the case files separate from regular personnel files.
Always Be Aware
Managers would be well-served to routinely monitor interaction among co-workers rather than wait for a complaint to be filed. Doing this might prevent less serious behaviors from expanding into full-blown misconduct. Keep an open-door policy as well so an employee feels safe sharing problems. If these conversations alert you to a sexual harassment situation — or even if you hear workplace rumors — they must be investigated.
Here are three additional steps to take:
- Review your employment practices liability insurance policy to see if legal costs associated with harassment are included. Determine if you need more coverage.
- Remain alert to sexual harassment issues and related legal cases, including those happening in other professions.
- Each year, review your sexual harassment policies and procedures, adjust them as needed, and inform all employees about the changes.
Finally, what will your practice do if a team member joins the #MeToo movement and uses social media to out your practice or an employee? Don’t wait for this possibility to become a reality. Instead, be proactive and develop a plan to address the situation if someone connected with your practice goes public with a complaint. Address both the legal and public relations concerns and get input from your attorney and other relevant professionals.
Is your practice prepared? Even if your hospital never gets entangled in the #MeToo movement, ignoring it is a problem. Instead, acknowledge the campaign and explicitly tell your employees that you agree with the fight against sexism both in the workplace and away from it. Work with your managers so they are prepared to foster an environment in which everyone can be safe from harassment.
Train and support your managers so they know how to handle a situation in which they personally observe inappropriate behaviors. Empower your team to handle harassment claims by providing them with all the policies, procedures and resources they might need, and be prepared to back them up all the way.
Originally posted in Today’s Veterinary Business http://todaysveterinarybusiness.com/how-metoo-affects-you-too/
“You know when a veterinary practice is toxic. You can almost smell it, that tang of adrenaline from spiking anger. You feel it. Your stomach sinks when you walk in the door and you sense the tension hanging in the air. Worse yet? You’re fully aware that the toxicity can lead to bad medical decisions resulting from spite or exhaustion or vindictiveness. The fantasies run through your head when you think about quitting – or finally getting up the courage to fire the bad apple that’s ruining the bunch. It all feels like a sickly gas floating through every client interaction, every treatment area procedure and every breakroom conversation.”
The article “Toxic Teams,” published in dvm360.com in February 2017, bluntly lays out what a toxic veterinary practice can feel like. Written by Rachael Zimlich, a registered nurse and journalist, the article also shares the dire potential consequences that can occur if a toxic environment is not addressed: bad medical decisions arising from spite, exhaustion or vindictiveness.
The article is also chock-full of responses to questions about the effects of toxicity in the veterinary workplace. They include the following results:
- 93% of people surveyed agreed or strongly agreed that communication issues can affect patient care
- 95% of people surveyed agreed or strongly agreed that communication issues can affect client care
- 79% of people surveyed agreed or strongly agreed that team conflict can affect patient care
- 90% of people surveyed agreed or strongly agreed that team conflict can affect client care
- 78% of people surveyed agreed or strongly agreed that communication issues can change decisions about which doctors and team members see particular cases
- 78% of people agreed or strongly agreed that communication issues make it difficult to agree to medical protocols
- 76% of people agreed or strongly agreed that team conflict can change decisions about which doctors and team members see particular cases
- 68% of people agreed or strongly agreed that team conflicts make it difficult to agree to medical protocols
So, how can your practice fight back against a toxic team environment? Here are six steps to take.
#1 Sliding Scale of Toxicity: Where Are You?
Practices fall along an entire spectrum of toxicity. If you’re one of the lucky ones, your team isn’t toxic, but you realize how you need to proactively keep it that way. If that’s the case, create policies that clearly define how communication should take place, which behaviors are acceptable and which ones aren’t, and the like. Get input from the various teams in your practice and, when the policy is formalized, add it to your employee handbook, hold meetings to discuss the new policy and review it annually, especially noting any changes.
If you recognize that your team already has a level of toxicity, go on to step two.
#2 Define What Behaviors Are Toxic
No two practices are alike, but common signs of toxicity include gossiping and bullying; staff feeling as though expectations are unclear and/or workloads are unreasonable; a management team that dictates what everyone should do without considering team feedback; and many more. Any one of these is a reason for concern and, if you recognize multiple toxic behaviors, the need for a solution becomes even more urgent.
#3 Model Appropriate Behaviors
Do as I say, not as I do. Managers and owners seldom say that statement out loud, but that message can easily be conveyed without ever being specifically articulated – and it is a recipe for disaster. If you want your team to communicate clearly and professionally, then that’s exactly what the managers and owners must do. If it’s important that team members follow specific policies and procedures, these need to be clearly provided – verbally and in writing – and the actions of managers and owners should not run contrary to them.
If you laugh about difficult clients after they leave, what message is that sending to your team? If you aren’t accountable to your team, how likely is it that they will ultimately be accountable to you? The actions of owners and managers must set the bar with high standards.
#4 Listen Carefully and Ask for Solutions
To get to the bottom of what’s making your practice toxic, you’ll need to talk to team members about their experiences, both good and bad – and you’ll need to carefully listen to what they tell you. You can use multiple formats to listen, including team meetings, one-on-one conversations, surveys where people respond anonymously and the like.
Don’t be afraid to ask your team to come up with solutions to identified problems. You are not obligated to use them, but you will probably find that many of them are quite good – and, since they have come from team members, at least some members of your practice will automatically be invested in making them work. There is also nothing wrong with setting the expectation that employees are responsible for attempting to solve their own problems, but practice owners and managers must ensure that the workplace is free from discrimination, harassment and the like.
#5 Address Toxic People Directly
Although team meetings can be excellent vehicles to gather information, they aren’t the best forums to handle toxic behaviors of a select number of employees. Instead, you need to set up individual meetings with people you’ve identified as participating in undesirable behaviors and come up with customized behavioral modification plans. Begin by privately sharing what you have observed about inappropriate behaviors and get a response from the toxic employee. Ideally, that person wasn’t aware of the impact of his or her behaviors and will agree to modify them. Other times, the employee will need to go through the disciplinary procedures set up in your employee manual, up to and including termination.
It isn’t unusual for a practice owner or manager to be reluctant to fire someone, perhaps because this person is the best one in the practice for handling fearful animals, as just one example, or the one who understands your computer system inside and out. But, toxic is toxic and, if that person does not appropriately modify behaviors, your practice, your clients and your patients will continue to be harmed.
#6 Right Size Your Expectations
Sure, you’d like it if you could tell your team to stop being toxic – and then they did. In reality, though, progress is likely to be incremental. After you’ve identified toxic behaviors, and then created and shared policies about expected behaviors, be sure to reward improved behaviors. Focus on making the workplace a more positive and healthy one, and celebrate each step towards that important goal.
2018 – Is it really here in just the blink of an eye? We have updated our calendar with additional events that you should be addressing in 2018 regarding Human Resources related activities. Please take the time to at least scan the list and pencil in on your appointment book or mark on your outlook calendar or for you techies with the smart phones or tablets, maybe there’s an app for that – so that you are proactively prepared to administer or address each event in a timely manner. Our list is based on a calendar year and your Practice’s fiscal year running concurrently. But any listed activity below, can be scheduled in the month that you need to begin the activity, so that you have enough planned lead time to get the event executed successfully according to your own schedule. Not all activities may pertain to your Practice (some depend on the number of employees working for you) and the list is comprehensive but not all inclusive – it is meant to get you thinking about Human Resources related activities and functions for the upcoming year. And as a reminder, some of the new HR related activities that are listed due to their prescribed implementation dates may change as we get closer to the deadline dates because sometimes legislative acts may get challenged, postponed or shelved. As we hear of updates, we will post them in our newsletter.
||HUMAN RESOURCES ACTIVITIES
- Prepare OSHA form 300A from OSHA 300 log
- Finalize Performance Management Review discussions and inform employees of annual increases/bonuses and effective dates
- The NLRB requires employers to notify employees of their rights under the National Labor Relations Act with a posted notice by January 31, 2018 (to order the posting notice for free, use the following link http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf )
- Remind employees – IRS changes for 2018 to pension plans or 401(k) plans
- Remind employees to submit a new W-4 form if withholding changes are to be made for 2018
- Reset dates and accumulators associated with HRIS/Payroll systems for the new processing year
- Request Vacation Schedules from the staff for the year – not set in stone but helps you plan, especially on the dates that everyone wants off.
- Post a Holiday calendar of when the Practice will observe the holidays
- Commence Performance Management – setting mutually agreed upon goals for the year/creating career development plans and distributing a Performance Management Review calendar for 2018 with ‘Pay for Performance’ guidelines communicated
- Review Federal & State Law posters – ensure compliance and updated postings
- Issue 2017 W2’s and 1099’s for current and former employees
- If you travel for Hospital business, the IRS 2017 mileage rate is 57.5 cents. Check for new rate for 2018.
- Post complete OSHA form 300A for 3 months
- Implement Employee Engagement Survey – get feedback on your organizational culture
- Review current and create new job descriptions in anticipation of Talent Acquisition Process
- Employees must change the withholding exemption to “single, with zero allowances” for employees who claimed total exemption from withholding for last year, unless the individuals have completed a new Form W-4
- Structure a Training Schedule – to determine which classes (technical/developmental skills) should be conducted internally vs. externally
- Facilitate a quarterly HR meeting – review policies, procedures and ‘celebrate success’
- Conduct a market survey on Compensation pay ranges
- Review and communicate feedback from Employee Engagement Survey – determine what ‘hot issues’ will be addressed and implemented by when
- Recruit and Pipeline network of potential new hires aligned to Practice’s workforce planning model/budget
- All plan sponsors and health insurance issuers must provide Standardized Health Plan Summaries of Benefits and Coverage along with glossary of terms to enrollees/potential enrollees
- Review SDS’s to determine if any hazardous chemical inventory needs attention or submission to appropriate agencies.
- Conduct HR related seminars such as ‘How to Prevent Harassment and Discrimination in the Workplace’ (some states such as CT require this training if you have ≥ 50 employees)
- Investigate with your health insurance broker, carrier and attorney how the Health Care Reform Act affects the Practice for 2018 especially if the health care plan designs are changing or laws that affect FT/PT eligibility need to be declared
- Community Living Assistance and Services Support (CLASS) Act, (basic lifetime long term care benefit in the event of illness or disability) has been suspended from implementation
- Review if any new federal/state labor laws that go into effect in the upcoming months and how the laws will affect the Practice
- Review and update Employee Manual to ensure up-to-date and compliant
- Commence Half Year Performance Management Reviews – according to calendar distributed in January
- Facilitate a quarterly HR meeting – review policies, procedures, distribute updated Employee Manual and obtain annual acknowledgment receipt of Employee Manual including Confidentiality Agreement and ‘celebrate success’
- Finalize all Half Year Performance Management Review discussions
- Conduct a component of an HR audit (e.g. employee files or payroll or records retention, etc)
- Complete and submit 5500 forms for employee benefit plans
- Complete an HR budget aligned to the Practice’s 2019 strategic/financial business objectives
- Receive carrier bids on 2019 plans from health insurance broker to determine plan designs and costs
- Facilitate a quarterly HR meeting – review policies, procedures and ‘celebrate success’
- File EEO-1 form for employers with ≥100 employees
- Communicate Open Enrollment Benefits calendar for October
- Conduct Open Enrollment for Health Care and other insurance plans to include processing information to the respective carriers
- Finalize HR budget with Practice owner
- Discuss with Practice owner percentage of salary adjustments and bonus opportunities to set aside
- Commence Annual Performance Management Reviews – according to calendar distributed in January
- Facilitate a quarterly HR meeting – review policies, procedures and ‘celebrate success’
- Discuss and agree upon HR goals for the Practice in 2019
- Prepare OSHA form 300A from OSHA 300 log
- Finalize Performance Management Review discussions and inform employees of annual increases/bonuses and effective dates
- Remind employees – IRS changes for 2019 to pension plans or 401(k) plans
- Remind employees to submit a new W-4 form if withholding changes are to be made for 2019
- Remind employees about Flexible Spending Accounts’ limits ($2,500)
With the past year being so divisive in the world of politics, tensions are running high throughout the country – so it isn’t surprising that political beliefs are a hot subject in and around the workplace. You may therefore have found yourself thrown into conversations or debates that got just a little too heated or left you feeling uncomfortable or even disrespected. On the other side of the spectrum, you may have been overly zealous when discussing such topics with co-workers because of your own passion. It isn’t easy to navigate these types of situations, but here are a few practical tips to help make it easier.
In general, politics don’t make for good workplace conversations. So, don’t start them and, whenever possible, don’t engage in them. Having said that, you spend a significant amount of time with your colleagues each week, so it’s only natural to want to discuss something you feel very strongly about with the people you spend the most time with. If that resonates, then move on to the next tip.
Always weigh the potential consequences of inserting yourself into political conversation. If the subject at hand is highly divisive, you may risk damaging work relationships, and the chances of changing a colleague’s mind about political points of view are slim. So, if you decide to enter a political conversation, don’t do it with the idea that you’ll change someone else’s opinion. Instead, consider the discussion as an opportunity to learn about other points of view, as a way to gain more insight and improve your own diplomacy skills.
Handling conversations with tact means that you remain open-minded and you listen carefully to answers given. Ask questions and, when you don’t agree, don’t immediately pull away from the conversation. Don’t be disrespectful in your verbal responses or, as best you can, in your body language. When you try to understand differing opinions, your world view expands, even if just by a little bit. If you feel as though a conversation is going poorly, you can say, “This isn’t heading in a good direction. I respect your opinion, so let’s just agree to disagree” and then get back to work.
Recognize that learning how to talk about politics in a productive manner may help you to handle other work-related conversations requiring finesse, such as disagreements about policy or peer performance reviews. Conversations that are difficult – such as those centered on controversial political topics – can ultimately benefit your ability to handle challenging interpersonal situations as long as you handle them with tact and learn from them.
If you’ve owned, managed or worked at a particular veterinary practice for any length of time, you may be so used to the workplace culture of the practice that you can’t effectively define it, much less analyze its strengths and weaknesses. If that’s the case, that’s perfectly normal. Having said that, it makes good sense for your practice to conduct a culture audit where you examine the assumptions, values and beliefs shared by people in the practice. This allows you to develop the healthiest culture possible for your practice, where the veterinary practice and individual members of the team can thrive and grow, and where the best service possible is offered to clients and their companion animals.
Organizational culture is comprised of all the elements of the environment of your veterinary practice. This includes the life experiences of each of the employees, along with how these experiences blend together – as well as how they clash. Add to this mix the influence of the veterinarians’ belief systems and life experiences, and the result is the practice’s culture.
People sometimes believe that culture is created through the spoken messages provided, including the policies stated by the veterinarians and the conversations occurring among employees. This is partly true, but culture is largely formed by unspoken messages received about what is valued by the practice. So, to improve the workplace culture, you need to appropriately change messages received by your veterinary team via spoken word but also by observing the behavior of employees at the practice, and determining what is considered acceptable. To change the culture, you’ll need to change the behaviors that are determined to not be acceptable.
For example, your policy handbook may say that gossip about clients is not permitted. But if, in reality, employees roll their eyes about clients and then laugh – and if that is allowed to continue to happen – then your culture is pro-gossip, not anti-gossip, even if no words are spoken.
This example also highlights the importance of performing a culture audit. At its core, a culture audit identifies messages conveyed, and then assesses whether they are the ones you want to be imparting and how consistent/inconsistent they are. This information will help to provide you with the insight you need to develop a healthier workplace culture.
Before You Begin an Audit: Authenticity Matters
As you begin to read more about workplace cultures, you will find ones that you admire – and ones that you don’t. It’s good to be able to identify what you want as part of your own culture (and what you don’t!). But, as the CEO and co-founder of UrbanBound, Michael Krasman, points out in a 2015 article titled Successful Entrepreneurs Understand the Importance of Company Culture, “Be true to who you are. Don’t define your company’s culture by the catchphrase of the day.” He also warns against creating a “grandiose vision and mission” that isn’t true to what you’re actually doing.
Performing a Culture Audit
You can gather information for your culture audit in multiple ways, and it’s more effective if you use more than one information-gathering method. To begin, it makes sense to simply observe your practice. Now that you’ve got a watchful eye, what are you noticing about the messages that are shared among team members and between them and your clients? Are they ones you want to impart?
You can also interview employees of the practice, both individually and as part of small focus groups. You can provide employees with surveys where they can choose to stay anonymous; if someone wants to share information with you but isn’t sure how you’d respond, he or she will most likely feel more comfortable with an anonymous survey.
It often makes sense to hire a consultant to get an impartial observer’s impressions. You are so close to what’s happening in your practice that it may be hard to be objective. This is especially true if your culture needs improved upon, but it can also be true with a practice where the workplace culture is largely positive and effective.
Throughout this process, notice how people are behaving. Note what they do and try to determine why they are doing what they do. What belief systems are driving their behaviors? As just one example, are they not trying to improve processes in the practice because they’re convinced that others won’t change what they’re currently doing? If so, how objectively true is that?
Assess the current procedures. How well do they dovetail with the verbal messages you are giving relevant team members? Perhaps, for example, you are telling your receptionist staff that nothing is more important than the client who is in front of them at the moment. That’s a great message – but if, in reality, you expect the same person to answer the phones while checking in the new clients, how realistic is it for him or her to provide a client with his or her undivided attention?
Take a good hard look at how you are using your finite resources, including time and money, and compare that against your ideal scenario. How close are you to the ideal? Where do disparities exist? Look at how you reward employees, how you develop them as leaders and how you promote them. This is not a comprehensive list by any means, but it should get you started.
Additional Questions to Ask Yourself
Consider what your communication style is, and whether you’re happy with it. Do you simply make announcements and expect your employees to run with it? Or do you solicit feedback and empower employees? What is your risk tolerance? Does your customer service style match your practice’s stated vision and values? How do your customers talk about your practice? Are you happy with what you hear? What is your competition doing well? Not so well?
Where to Go from Here
Once the audit is complete, you can then compare your ideal culture to today’s actual culture, and identify where gaps exist. Once those gaps are identified, then you can begin to create a plan to improve your practice’s culture so that it’s a healthy one, and one that serves the practice itself, the members of the team, and the clients and their companion animals well.
If you’re looking for an experienced professional consultant to help you with your practice’s culture audit, contact us online, email firstname.lastname@example.org or call 908-823-4607.
Finding the right resident for your practice is a lot of time and work. Protect your investment and keep your resident from straying to other practices by including proper retention provisions in your residency agreements.
The basic bargain you make with your resident is simple: you agree to pay all or part of your resident’s training and residency living expenses; and your resident agrees to work at your practice for a minimum period—the “retention period”– after she is board certified.
To implement this bargain, residency provisions typically use a stick and/or carrot approach. The stick requires your resident to pay back the residency expenses you fronted if she fails to timely pass her residency or if she leaves your practice before the agreed upon retention period expires. The carrot, which is optional, pays your resident a bonus at the end of the retention period.
Here’s a list of the principal issues your residency provisions should address, bearing in mind that the main variable affecting their structure and content is whether or not the residency will be in-house.
- Residency Rules. If you are sponsoring the residency, both you and the resident should agree to respectively follow the residency rules and guidelines set by the applicable veterinary college (“Residency Rules”). Accordingly, you would be prudent to ensure that compliance with Residency Rules will not unduly burden your practice before you commit to sponsoring the residency. The residency provisions should also: (a) require the resident to keep track and inform you of any rule changes; and (b) allow you to terminate the residency without penalty in the unlikely event a rule change makes compliance too burdensome for your practice.
- In-House Residencies. With in-house residencies, your resident will invariably be your employee during the residency period, so all the usual employee issues relating to compensation and benefits apply. However, you will need to adjust your standard employment agreement to give your resident time to: (a) complete whatever externships are required by the Residency Rules; and (b) study for her boards. (In this regard, you may consider reducing her compensation accordingly.) Do not forget to check that your insurance and benefit plans will cover your resident during this period.
- Off-Site Residencies. If a veterinary school or other hospital is going to sponsor the residency, you need to consider whether you want your resident to be your employee during this time. If the resident will be attending a veterinary school or other hospital far from your practice, you may not want her to be your employee, since an employer is generally liable for their employees while they are acting within the scope of their employment. Since you have deeper pockets than your (normally) impecunious resident, plaintiffs will be motivated to sue you if your resident gets into trouble.
If this liability worries you, then you will need to loan your resident the amounts she needs, with the understanding that you will employ her as soon as she is permitted to take the boards (and then forgive the loan at the end of the retention period).
Loaning residency expenses to your resident with an employment agreement to follow will be more complicated to structure, negotiate and document, than simply employing your resident from the outset. This will take more time and cost more in legal fees. You will need to balance this increased cost against the risk of incurring liability for your employee’s acts and omissions while a resident. Such balancing will require weighing various factors, including the extent to which the veterinary school or other institution is liable for their residents and to which your resident employee will be deemed to be acting within the scope of her employment. Common sense would indicate that the school or institution should be primarily liable for all resident activities and that the risk of your incurring such liability is remote. But all bets are off in our sue-happy society. It may also be possible to cost-effectively insure against any residual liability. As a precaution, your resident should agree to seek your permission before engaging in any remunerative activity while a resident, (e.g., working at a shelter or temping at an emergency clinic), so that you can evaluate the risk thereof.
Finally, depending upon the residency program’s schedule and how far away it is from your practice, consider whether you want your resident to work for you during week-ends, holidays and/or residency program breaks.
- Ensuring Diligence. Whether or not your resident will be completing her residency at your practice, she should agree to diligently pursue her residency to completion, which will include studying and sitting for the boards as soon as she is permitted to do so. Your resident should commit to become board-certified by a certain deadline (which can be extended for a limited time if your resident becomes disabled). If the residency program is held off-site, your resident should agree to provide you with adequate documentation to monitor her progress.
- Residency Expense Tracking. Your residency provisions will also need to specify the residency expenses for which you will be responsible and how they will be documented and paid. Consult with your tax advisor to ensure that this is done in a tax efficient manner.
- Residency Expense Repayment. Now for the stick. The residency provisions typically will provide that the resident will repay the residency expenses you have advanced, unless she works at the practice through the end of the agreed upon retention period. In essence, your resident is “working off” her “debt” to you. (The “debt” being your advance of residency expenses to her.) Thus, during the retention period, your former resident’s compensation should be less than market to reflect this “repayment.”
This loan analogy cuts both ways however, because a savvy resident will demand that the repayment obligation be suitably pro-rated, so that if she leaves, say, in the middle of the retention period, she need reimburse only half of the residency expenses.
The provisions should provide for a repayment schedule and an interest rate (or specify that the resident will owe no interest). In attempting to reduce interest as much as possible or eliminate it all together, a savvy resident will argue that the practice is benefiting from the services of a “captive” specialist, who cannot leave without incurring a substantial reimbursement obligation. This benefit is above and beyond what an un-affiliated lender would receive, and in consideration for this benefit your practice should not charge interest. (Be advised, however, that charging below market interest or no interest may subject you to tax liability.)
- Disability and Early Termination. Proper residency provisions must also cover life’s more foreseeable contingencies. The two principal intervening events that should be addressed are disability, and employee termination before the expiration of the retention period.
7.1. Resident disability generally will extend the deadline for obtaining board certification and also length of the retention period. If your resident’s disability lasts longer than this extension, she normally would be terminated, just like any other employee subject to long-term disability. But what about her repayment obligation? Should she still owe you for the residency expenses you advanced? If you’re tough you might say yes. If you’re nicer you might want to forgive your disabled resident’s repayment obligation in whole or in part. (Note that you might be able to insure against this risk.)
7.2. What happens if you terminate your resident before the end of the retention period? If you terminate for the usual “for good cause” reasons, then the resident should still repay you for the residency expenses you advanced. In this regard, the residency provisions should allow you to terminate your resident “for good cause” if she fails to become board-certified by a specified date.
But if you terminate your resident at your discretion, i.e., for any reason other than “for good cause”, then the provisions should extinguish your resident’s obligation to repay you for the residency expenses.
If your resident leaves before the end of the retention period she will owe you the residency expenses you advanced. That is after all the whole point of having retention provisions in the first place. But heads up: a savvy resident will require the provisions to address what happens if she terminates her residency agreement because of your breach of that agreement.
- Retention Bonus. If you wish to motivate your resident with a carrot in addition to the stick, the residency provisions can provide that you will pay your resident a specified bonus if she stays through a specified date (which need not coincide with the end of the retention period, and could even be paid periodically in installments). As with your resident’s obligation to repay residency expenses, the bonus provisions will need to deal with disability and early termination (either implicitly or explicitly).
- Residencies as CLE. Residency programs at veterinary schools or other institutions can constitute a valuable educational resource for your practice. Accordingly, do not forget to require your resident to provide copies of all interesting residency documents and give your practice periodic presentations of residency activities.
Like many things in life, residency provisions are simple in concept but complex in implementation. You will need to invest some time and effort, and incur some expense in preparing a proper residency agreement. Accordingly, it makes sense to temporarily employ your future resident at your practice before committing to any residency obligation—just to make sure that she is worth the investment.