Negotiating Lease Agreements

Imagine you’re a practice owner, and your practice currently has a 12-year history of consistently grossing $1.5 million—and is actually on track to earn upwards of $2 million this year! You have three exam rooms and three certified veterinary technicians, and you’ve just hired an ambitious associate veterinarian to bring your total up to three full-time associates, with plenty of support staff. Your practice’s operations are clearly excellent and the camaraderie is there but, you’re ready. You’ve decided that enough of your life has been dedicated to the prosperity of your practice and you want to enjoy the remainder of your life with your family. You have made the decision to sell your practice.

You meet with an attorney, create your practice’s profile, and garner the attention of many corporate consolidators (CC) and private contractors (PC). Prior to entertaining any offers, your attorney asks you about your plans, including whether you’d like to remain involved in the practice, post-sale. You respond, “I think I want to retire altogether. I love my practice and my staff, and I’ll visit from time to time, but I’m pretty sure I want to spend the rest of my time with my family.” Your attorney then asks about the property and you are at a loss; you thought that once you sold the practice, the property would be sold, too. Your attorney informs you that this is not the case and sends you home with homework to complete, something you haven’t had to do in quite some time. Now you have to ponder about what you want to do with your real estate if you sell your practice.  

Do you want to relinquish or retain ownership of the real estate?

This is the first question that any facility owner who also owns the property needs to answer because this will dictate what language will be used in letters of intent (LOI). You’ll need to determine whether you want to retain the ownership of the property and lease it to the future buyer or sell the property.

If you’re looking to relinquish ownership of the real estate, then you’ll need to determine how and when this will change hands—and if this is your plan, then the remainder of this article will be purely informational. On the other hand, if you want to continue to retain ownership of the property and become a landlord, then    you should continue reading.

As a third scenario, if you currently lease your property from a third-party landlord, then your responsibility is to inform the buyer about your current lease’s terms and help to facilitate the transfer of the contract from your name to theirs.

What’s the composition of the lease?

Assuming, from this point on, that you’re the owner of your property and you want to lease it to the buyer, here’s what might happen next. Typically, the buyer will present you with a drafted lease with their terms—which likely represents their interests—and you will have to negotiate from there. Since this will be a steady stream of income for you, we’ve provided you with information to maximize the revenue you’ll receive.

For clarification purposes:

“Buyer”/“Tenant” = Buyer of your practice; “Seller”/”You” = Practice Seller & Property Owner/Landlord

Lease Terms & Renewals

When discussing the value of a lease to buyers, you’ll have to think long term, literally. Most buyers, especially the CCs, express interest in having an initial 10- to 15-year lease to retain a firm grasp on the practice’s property and to ensure longevity. This may differ for PCs. You could add more value to the lease by giving the buyer options to renew at five or ten-year increments. This assures continued operations for the practice, allows for early renewal negotiations, and makes it easier for you to refinance the property, if need be. Now, depending upon your terms, you should determine how much you will charge the buyer for rent. Typically, rent is calculated as the sum of the base rent and additional rent, but you should also consider the valuation of your property. That’s because the fair market value (FMV) of your property may help to drive the base rent that you set for the buyer.

Fair Market Value

Agreeing to a base rent can represent a risk for both you and the buyer. Here’s why. Your initial lease term would be dictated by the FMV or, rather, the price your property would sell for on the open market; however, the FMV excludes the value your practice adds to the property. Zach Goldman, owner of the real estate investment trust (REIT) company, Handin Holdings, states that the valuation of a piece of real estate is therefore equal parts of art and science. It involves noting the global picture along with (1) the structure of the specific building, (2) the real estate market of the area, (3) the quality of the practice’s operations, and (4) the economic reliability of the tenants (i.e., will they be able to pay rent).

Plus, how you value your property isn’t necessarily how others will perceive its value. As a practicing veterinarian and owner of the practice, you’ve undoubtedly worked tirelessly to ensure the prosperity of your clinic. The sacrifices you’ve made and the time you’ve spent developing the practice to bring it where it is today, though, doesn’t necessarily add much value to the property itself. Daniel Feinberg, vice president of finance at the REIT company, TerraVet Solutions, notes that a common misconception they face when speaking to veterinary practice owners is that they are often infusing their personal experiences into the property value. He advises all future practice sellers to work with REITs, like TerraVet, to help determine the value of their properties from an objective lens; this way, as a seller, you can work on adding value to your property prior to entertaining offers.

Once you’ve appropriately valued your property, you can then determine how much you should charge for your initial term of the buyer’s lease. We advise that you read the terms of the lease provided by the buyer very carefully; CCs will typically request a “reset to FMV” once it’s time for them to renew their lease. This can effectively eliminate cash flow certainty during the renewal periods and, clearly, this does not always work in your favor. Whether or not this will be advantageous to you is highly dependent upon a number of factors, including your geographic location. Typically, if an FMV reset is included, then an appraisal will be needed. If you aren’t sure whether this would negatively or positively impact you, you could create appraisal rules and limitations to include within your lease. You’ll want to answer questions that add clarity to and substantiates the FMV reset; these are questions such as:

  • What appraisal method will be used and who will be conducting the appraisal? Your choice or buyer’s choice?
  • How will the future rent be determined? Will it be based on the property’s best or highest value?
  • Will the FMV-based rent take into consideration the practice’s value?

These are only a few questions that will need to be answered and you can find more information by contacting your real estate attorney or a REIT company.

Base Rent

Base rent is the amount charged to the buyer to simply occupy the premises. It can be calculated in a variety of ways, with the two most common methods being the following:

  1. Based upon a percentage of a tenant’s gross revenues: This will complicate the lease because the lease parties need to agree on (a) the method used to calculate the practice’s gross revenues; and (b) a process to resolve disagreements.
  2. Based on dollars per square feet, with “square feet” able to be defined in a number of ways: Most commonly, leases charge a dollar per foot of either the “rentable space” or the “rented space.” The former results in a higher rent, but will likely be refuted—and, therefore, the latter will be more easily accepted. No matter what standard is used, you will need to clearly define square footage.

Whether you choose the first or second option to calculate base rent, you will likely need to negotiate specific.

“Additional rent,” meanwhile, comprises all other costs, usually related to the facility’s operations, that your buyer is required to pay you in addition to the base rent. Such costs could be a security deposit (often one to three months’ rent) and reimbursing the landlord for property taxes (monthly or quarterly).  In most cases, the buyer doesn’t pay the property taxes directly; this would typically be handled by you and then you would be reimbursed by the buyer. You could, however, require the buyer to pay you an estimate of property taxes monthly or quarterly in advance, subject to an annual reconciliation mechanism. This would consolidate the buyer’s payments while concurrently allowing you to receive a portion of the property tax amount in advance.

Types of Net Leases

Briefly, net leases help to define the relationship and responsibilities between the buyer and seller. The type of net lease—single, double, or triple—determines whether the buyer will pay, in addition to the rent, any of the following three expenses: property taxes, property insurance premiums or maintenance costs. You can equate the type of lease with the amount of responsibility, in addition to the rent, that the buyer will have. Single net lease requires the buyer to be responsible for property taxes, a double net lease will require the buyer to pay for taxes and insurance premiums, and a triple net lease will require the buyer to pay for all three additional expenses.

The goal is to minimize your responsibilities as a landlord as much as possible. Therefore, most leases are triple net leases. Reducing your responsibilities increases the likelihood that the buyer will negotiate with you on topics like rent during the initial term of the lease, liability insurance requirements, and a host of other things. Your best option would be to require a triple net expenses lease while only being required to cover the maintenance and replacement costs of the property’s structural components, such as a roof replacement or maintenance of the property’s foundation.

Annual Rent Escalations

Rent increases can be considered the norm in most veterinary practice leases today. These escalations are usually based on the Consumer Price Index (CPI), produced by the Bureau of Labor Statistics (BLS), which is essentially an average price measured over a time range. The CPI allows for you to adjust the buyer’s rent to accommodate the price change of the current real estate market. Most commonly, the escalation is represented by a percentage increase over a specified period of time. Although you are able to determine a percentage and offer it within the lease, we typically see a two to three percent increase annually. You can think of this as a compounding scheme whereas you will establish the base rent for the initial year of the lease, and each year after the buyer will pay an additional percentage. To illustrate, here is an example:

You’ll have the buyer pay a base rate of $25,000 annually during your initial ten-year lease. However, you will add the caveat that states how there will be a two percent escalation that will be applied to the base rate annually. This type of increase would result in the tenant paying nearly an additional $41,000 at the conclusion of their ten-year lease term.

This provides a better, more stable and predictable method of forecasting what income you will receive from the buyer. Ideally, you’ll consider their rent in conjunction with the buyer’s responsibilities as a tenant, so you need to also consider what kind of net lease you’d prefer for the buyer to have.

Financial Reports

In addition to your lease, you can also request an annual financial report of the practice. While most landlords don’t request this information, there are many reasons why you should. Annual financial reports allow for you to gauge the operations of the practice and determine whether the buyer will be financially self-sustaining. When requesting the financial reports from the buyer, they should typically provide you with a balance sheet, profit and loss statement, and a statement that acknowledges any changes in the financial position as well as any supplemental details to explain the change. These combined reports will provide an overall view of the financial well-being of the buyer, as well as assure you of their financial stability throughout the lease term(s).

The Guaranty

This seems like a very clear and straightforward issue, right? We generally assume that the buyer will provide the guaranty, but who exactly is the buyer? In this day and age when most of the CCs are owned by a larger corporate parent, you have to ensure that the buyer who is purchasing your practice can provide a guaranty for your lease. The company backing your lease could range from, say, Midwestern Pet Hospital, a single hospital with a limited, regional reach, to Animal Hospital Operations, a generally well-known company with multiple hospital ownerships. If you did your due diligence, you would discover that Animal Hospital Operations is owned by Krispy Kreme, a company with the financial assets to assure you they are committed.

In order for Krispy Kreme to provide you with stability, using that example, you would need to confirm that their name is listed in the lease agreement. In comparison, a review of financial statements shows that Midwestern Pet Hospital has had a fluctuating history of financial stability and only within the past three years has begun producing competitive revenue. Which buyer would you choose to back your lease? You’d likely selected Krispy Kreme and rightfully so. The point here is that you should always ensure that the buyer can either provide a corporate guaranty from their parent company or can provide enough evidence to convince you that they can uphold tenant responsibilities and, essentially, foot the bill.

Assignments

An assignment clause in a lease essentially allows for the tenant to transfer the lease, and all associated tenant responsibilities, to a different entity. However, this is typically an area that you as the landlord will want to specify and limit. Commonly, CCs like to freely transfer their leases to any affiliated entities, which would almost certainly diminish the value of your property for multiple reasons. First, if the buyer was allowed to sublet or freely assign the lease, then they would receive the revenue generated from the sublet, not you. Second, if the tenant isn’t up to par, then the value of the property itself could be driven downward. Therefore, it’s in your best interest to add provisions to prevent this free assignment. For example, you can negotiate by stating that the buyer can only assign their lease to a guarantor with a net worth that is equal to or greater than the existing guarantor. This ensures that your property’s value does not decrease and that the tenant responsibilities are financially accounted for.

Are there any outstanding rights of first refusal or offer (ROFR/ROFO) with your real estate?

The ROFR and ROFO concept can be off-putting for many buyers and could severely diminish the quantity of offers you may receive. To explain, there are many variations on a theme when discussing ROFRs and ROFOs, but they all center on the fact that, as the seller, if you receive an offer to purchase the property, you are legally bound and required to send notice of the full offer to whomever holds the ROFR/ROFO. If the offer is incomplete or if you don’t give the holder sufficient notice of the offer, you have now made yourself, as the seller, vulnerable to one of two scenarios:

  • being sued for failing to protect the rights of the ROFR holder
  • losing the interest of the buyer because the ROFR holder didn’t respond or didn’t receive the notice of the full offer with enough time to respond

In some instances, there’s the ROFO, which is currently defined as “an offer made in good-faith” by the seller. This means that the seller will inform the holder of a reasonable offer before any official listing of the property or entertaining of such offer. The holder can either refuse or accept the offer. With a right of first refusal, the ROFR holder can opt to match or counter the buyer’s offer. This leaves you vulnerable to losing your initial buyer’s interest because the buyer won’t, or can’t, raise their offer to purchase the estate. Your practice facility’s future is subject to the demands of the holder. You can choose to accept their offer or remain the landlord. As you can see, the impact of the ROFO/ROFR can be quite significant; therefore, you should carefully review any and all documents for such a clause.

What are your expectations of the buyer?

As a practice owner preparing for the next step, it is important that you think about your lease, your practice, and your future, post-sale. You have to determine what responsibilities you are expecting the buyer to take on and be willing to negotiate those from the very beginning. Knowing what terms of your lease are non-negotiable from your perspective before you begin the bidding process could prove to be advantageous because you can provide them with your terms and negotiate from there. With respect to the lease obligations, the buyers can’t change the terms of the deal or alter the purchase price later in the process because you’ve already informed them of your lease terms and have negotiated the obligations at the start. Informing your buyers of what the lease terms are in the beginning and having that full transparency gives you the most leverage to guide the conversation how you see fit.

So, what does all of this mean?

There are numerous points to consider prior to the sale of your practice to prepare you for negotiations.  The process of selling your practice can be long, and it can easily be extended if you have not addressed your personal, practice and/or property needs. Many sellers are not prepared to deal with a facility lease when they sell their practice, but doing your homework now can give you the knowledge and confidence to negotiate a lease with your buyer that will benefit you for years to come.

WORKS CITED:

  1. Lacroix, Charlotte. “Property Lease Dangers, Part I” | Real Estate, 2012, Veterinary Business Advisors, Inc. http://veterinarybusinessadvisors.com/wp-content/uploads/2016/07/Property_Lease_Dangers_Part-1_2012.pdf
  2. Lacroix, Charlotte. “Property Lease Dangers, Part II” | Real Estate, 2012, Veterinary Business Advisors, Inc. http://veterinarybusinessadvisors.com/wp-content/uploads/2016/07/Property_Lease_Dangers_Part-2_2012.pdf
  3. Lacroix, Charlotte. “Negotiating a Commercial Lease” | Real Estate, 2018, Veterinary Business Advisors, Inc. https://veterinarybusinessadvisors.com/negotiating-a-commercial-lease/
  4. Gosfield, Gregory G. “A primer on real estate options.” Real Property, Probate and Trust Journal (2000): 129-195.
  5. Ackerman, Lowell, ed. Blackwell’s five-minute veterinary practice management consult. John Wiley & Sons, 2013.
  6. Bank, LiveOak. “Veterinary Acquisition Due Diligence.” Veterinary Practice Acquisitions | Due Diligence Services | Mergers, 2017, www.veterinariancpas.com/acquisition-due-diligence.htm
  7. Stein, Joshua “The Most Important Issue in Every Ground Lease: Rent Resets and Redeterminations, Fair Market and Otherwise” New York State Bar Association | Real Estate, 2018, http://www.nysba.org/WorkArea/DownloadAsset.aspx?id=86403
  8. McCormick, David; Mamalis, Leslie. “Monitoring Practice Profitability” Veterinary Hospital Managers Association 2013 Annual Conference, https://cdn.ymaws.com/www.vhma.org/resource/resmgr/imported/MonitoringPracticeProfitablityfinal.pdf
  9. Bank, Live Oak. “Veterinary Practice Acquisitions Guide 2018” Veterinary Practice Acquisitions | Acquisitions, 2018, https://www.liveoakbank.com/wp-content/themes/LOB2017/assets/downloads/Live-Oak-Bank_Vet-Acquisition-Guide.pdf
  10.  US Bureau of Labor Statistics. “Writing an Escalation Contract Using the Consumer Price Index”. Real Estate. November 2012. Beyond the Numbers, Volume 1, Number 19. https://www.bls.gov/opub/btn/volume-1/pdf/writing-an-escalation-contract-using-the-consumer-price-index.pdf

Legal Risk Management in Responding to Negative Online Reviews

Most people today have social media accounts that they use to keep in touch with friends, to read the news, to scroll through pages of cute animal pictures and more. We also use online resources to make everyday decisions, including choosing doctors, restaurants and movies. Today, virtually every service, from hair dressers to plumbers and beyond, is chosen in part based upon their online ratings and reviews. In fact, 72% of customers say they rely heavily upon online reviews when choosing services.

As a consumer, this can seem like a great way to weed out poor choices and find the best service. In fact, 87% of consumers say that a business needs a rating of at least three stars for them to even consider using them.

From the business owner’s point of view, though, these reviews can cause frustration, especially the negative ones which even have the potential to impact self-esteem. As veterinarians, for example, most of us feel that we have provided reasonable levels of service to our clients. Therefore, we can be shocked to see how our service has been construed by a client in a negative review.

For example:

Mrs. Smith calls Corner Veterinary Hospital, asking for a refill of Fluffy’s metronidazole. The receptionist informs Mrs. Smith that Fluffy hasn’t been seen by a veterinarian for two years and, if Fluffy is not feeling well, she should be examined by a veterinarian. Mrs. Smith becomes angry and refuses the appointment. Later that day, Mrs. Smith posts a Yelp review that Corner Veterinary Hospital refused to give Fluffy her medications and is run by money-grubbing veterinarians who just want an excuse to get more money from her.

Or:

Susie works for Dr. Johnson at Corner Veterinary Hospital. Susie is eventually terminated for excessive absenteeism. A few days later, Suzie posts a Facebook review that Corner Veterinary Hospital is filthy, Dr. Johnson doesn’t actually know what he’s doing, and he orders unnecessary treatments to make more money.

Naturally, Dr. Johnson and Corner Veterinary Hospital become indignant with such representations of their character and services. What options does the practice have for combatting such reviews?

In general, online reviews can either be ignored, responded to, or alternatively, the client can be sued for defamation. When deciding how to respond, it’s important to consider that the practice’s current clients have already formed their own opinions from their own personal experiences, and are less likely to be significantly swayed by a single negative review. Any recourse should therefore be taken with the potential client’s viewpoint in mind.

Choosing Among Options

The first option is to not respond at all. In general, if a practice has numerous positive reviews and only a few negative ones, potential clients who are deciding whether or not to use the practice will be less likely to be swayed by the negative reviews. In that case, most potential clients will accept the fact that some people will never be satisfied. A few politely-worded negative reviews can actually make the reviews of the business seem more authentic overall and, fortunately, potential clients can typically recognize highly unreasonable people.

It can be tempting to want to remove negative online reviews from a website, especially those that are more extreme. In many situations, this attempt may be unsuccessful, but there are some steps that can be taken. If the review appears on the veterinary practice’s Facebook page, for example, then the offending party can be blocked from the page so that any comments will not be viewable. Also, the Facebook review feature can be turned off entirely, although this will also remove all positive reviews, too. If the review appears on websites outside the control of the practice, and it is grossly inaccurate, some websites can be contacted to have the post removed, but this is often not successful.

Some practices ask acquaintances to post positive reviews to skew their ratings. Sites such as Yelp have mechanisms in place to identify and filter out reviews from friends and family and, on general principle, this should be avoided altogether. A better method is to encourage current clients to leave online reviews; although it is not ethical to ask them to write positive ones, it is acceptable to request reviews from clients who had quality experiences at the practice.

Under certain circumstances, veterinarians who feel they have been wronged will want to defend their names and reputations. After all, it’s hard to sit back and watch yourself be misrepresented online. Many people therefore feel the urge to respond to these reviews and clarify facts of the situation. Veterinarians, however, need to be aware that responding to such posts with the specifics of the situation may violate patient privacy laws. So, what can you do? Some practices try to proactively protect themselves by having new clients sign a statement saying that they waive the right to patient privacy in the case that the client posts a negative review.

Unfortunately, such a waiver would not be protective in court. Since the waiver is signed before any incident would occur, that client would not have had all the facts needed to waive his or her rights to privacy.

According to the AVMA, “veterinarians and their associates must protect the personal privacy of clients, and veterinarians must not reveal confidences unless required to by law or unless it becomes necessary to protect the health and welfare of other individuals or animals”. In other words, providing information in response to a negative review that could identify the client or patient could be a breach of privacy. At best, the practice could use the occasion to clarify their standard policies.

In addition to legal concerns, any reply to such a review could be perceived as inflammatory and defensive in tone by potential clients. Again, it’s important to remember that the Google-search audience is comprised of potential clients who are trying to decide which veterinarian would be best for Spot. A negative review may be considered more interesting, and is more likely to be read by a potential client when it has a reply from the practice.

If read, then the tone and impact of the reply is the potential client’s first insight into the personality of the clinic. If the practice seems defensive and unwilling to take responsibility, then the potential client may perceive the clinic as being hard to work with and one that’s not looking out for the client’s best interest. Any attempt to set the story straight can sound like arguing and create an unpleasant impression to the client.

That doesn’t mean that the review must be ignored entirely. Perhaps the practice doesn’t have many reviews and this one long and negative review thereby seems glaringly obvious. If the practice feels the need to respond, a generic but specific reply can be posted, such as the following:

Hi Mrs. Smith. We’re sorry to hear about your experience at Corner Veterinary Hospital. Please call Barb, our office manager, at (xxx)-xxx-xxxx so we can address your concerns.

This style of reply doesn’t break any patient confidentiality, can make the client feel as though he or she has been heard and, perhaps more importantly, provides an empathetic tone for potential clients to see. A good reply includes some expression of empathy, the specific name and phone number of the contact person, and an invitation to a private conversation.

The possible outcomes of this are three-fold. The best-case situation would be that Mrs. Smith does call Barb, hears an explanation and is satisfied with the conversation. In that case, she might remove the review or edit it to a positive. The next best situation is where Mrs. Smith calls and is reasonably satisfied but makes no changes to the review. The worst situation is where Mrs. Smith calls, but is still unhappy with the outcome, and makes further negative posts.

To help prevent this last situation from occurring, make sure the contact person is reasonably available and has the knowledge and authority to address the concerns. If Barb is only available every other Tuesday from 10:00am-12:00pm, Mrs. Smith will likely become even more annoyed. If Barb doesn’t understand the policy enough to defend it or doesn’t have the authority to make any reasonable accommodations, Mrs. Smith will likely be just as frustrated in the end, or even more so.

Ultimately, you can do your best to resolve these types of situations, but keep in mind that there are some clients who will never accept that things cannot be done their way. Since, by law, Fluffy’s metronidazole cannot be refilled without an exam in the past year and Barb cannot change that regardless of how much she wants to help Mrs. Smith, this particular situation may never be satisfactorily resolved for all parties.

Reviews from Disgruntled People  

Let’s say you receive a negative review from a client whom you’ve banned from the practice. Can that client be sued for libel? For a statement to be considered libel, it must be presented as fact, or be reasonably construed as fact by the average person. As long as the general gist of the story is true, even if some of the pieces are false, it may not be enough to constitute libel. Most reviews have some basis of truth to them, even if not every single detail is true, and these circumstances can make it very difficult for any practice to successfully fight a court case against a client. Plus, since almost all reviews are expressions of opinion, the practice will rarely have a solid enough case to make in court.

Moreover, pursuing a libel case can be quite expensive with a likelihood of success typically being slim. Besides, at the first hint of legal recourse, the client could immediately post that information to social media and create a publicity nightmare. Hence, any attempt at suing for libel is, in most cases, not worthwhile.

Another possible scenario involves unhappy employees or ex-employees. What recourse does the practice have against a disgruntled employee who has a bone to pick? Some websites, such as Yelp and Google, will block reviews from disgruntled employees if asked to do so. Plus, new hires could be asked to sign both a non-disclosure agreement as well as a non-disparagement agreement. Non-disclosure agreements prohibit employees from sharing information that is not publicly available, while non-disparagement agreements prohibit employees from making disparaging statements about their employer. Since most employers don’t (and shouldn’t) publicly disparage their employees, it is reasonable for them to request the same of their employees.

These need to be carefully worded documents, though, because the National Labor Relations Act gives employees the right to discuss wages, benefits, and other terms and work conditions with other employees.

As far as the non-disparagement agreement in connection with negative postings, this document can create leverage for an employer in court, but the employer will likely incur significant legal fees and probably receive negative publicity while pursuing charges. Unfortunately, the other fallout of such a clause is that, in the case of a harassment suit, an employer who has a non-disparagement agreement in place will likely have to pay higher settlement fees. In general, non-disparagement agreements are best avoided.

What If the Negative Client Review is True?

Sometimes, unfortunately, the hospital’s staff does perform poorly. For example, let’s say that Mr. Jones dropped Buddy off at Corner Veterinary Hospital for a routine castration. During the course of Buddy’s stay, a veterinary assistant walked Buddy outside. Buddy slipped his collar and disappeared into the woods. Mr. Jones is contacted, and the assistants make every effort to find Buddy, but to no avail. Mr. Jones is irate and posts an angry Google Review saying that Corner Veterinary Hospital is clearly not responsible and shouldn’t be trusted with anyone’s pet.

In this situation, Corner Veterinary Hospital stands to lose a lot, as this is clearly an egregious offense and is entirely true. The review can be ignored, and perhaps the practice will make that decision if there are sufficient positive reviews to outweigh it. A polite response asking the client to call the office is also a valid option, but the practice may want to make the response more apologetic. The response can also include an acknowledgment of what went wrong, with a description of what has been done to fix the problem, such as the following:

We’re very sorry that you’ve had this experience at Corner Veterinary Hospital. All our staff is very upset about this situation and continues to search for Buddy. Since we never want an incident like this to happen again, we are having all of our hospitalized patients walked with two leashes, including a slip lead that is more secure. We are also working on fencing in a section of our property for even more security. If you would like to discuss this further with us, please call Barb, our office manager, at (xxx)-xxx-xxxx.

While this is not an ideal situation by any means, showing concern, an acknowledgement of what went wrong, and a plan to prevent future issues may be the best method of preserving the practice’s reputation.

What’s Best

Ideally, practices should focus on performing in a way that will help to prevent negative reviews from being posted. While there are some clients who will never be satisfied, most reasonable clients will be happy when you have a friendly staff that provides them with good service, and the practice enforces transparent, reasonable policies. It is important to have a plan in place, though, so that you know how to respond, in general, when you do get a negative review.

You can use negative reviews to discover where your practice has the opportunity to improve its client service. Was Mrs. Smith unhappy, for example, because the receptionist offered her an appointment three days out when Mrs. Smith was already sick of cleaning up her cat’s diarrhea? Or was the receptionist unempathetic and hard to work with? While neither of these may be the case, every negative review is an opportunity to evaluate and potentially improve the practice’s policies.

Auditing Your Company’s Mission Statement

Although no two mission statements are alike (nor should they be), it’s important to regularly audit yours—perhaps when you do your annual policy review, overall—to determine whether or not the statement is still relevant and actually being put into practice. Here is a helpful checklist.

  • Is your mission statement still relevant? If not, why not? What needs changed?
    • Is your purpose still the same?
    • What about your core values?
    • Do you offer different products and/or services, ones that have caused your mission statement to need to evolve?
    • What makes your business unique? Is that clearly indicated?
  • Can your entire team recite your mission statement?
  • When you ask each member of the team (or, if at a large company, a sample of them) what the mission statement means, how consistent are the answers?
    • How closely do they match what key staff believe the statement to mean?
    • If there are gaps, where do they exist? How significant are they?
    • In your policy manual, have you included concrete examples of how the mission statement could be put into practice? If not, would that be helpful?
  • How do you explicitly communicate your mission statement to your customers or clients?
    • Through signs that state it?
    • In your website and printed materials?
    • In your advertising?
  • In company meetings, how often do you discuss the mission statement?
  • When your company faces challenges and/or difficult choices, do you consult your mission statement when reviewing possible solutions? How is it your benchmark?
  • When you create new policies, do you ensure that they mesh with your mission?
  • How often do you review your policy manual to make sure that what’s included dovetails with your mission? As just one gut-check example, how well does your disciplinary policy match your mission statement?
  • You can also review the following for matches and mismatches:
    • Your organizational chart
    • Job descriptions
    • Forms
    • Any other employee handbooks or manuals
  • Take a look at how you reward employees. Are you rewarding them for phrases contained in your mission statement? If, for example, your statement includes “providing compassionate care,” do you actually reward and promote based on that value, or are your rewards based on how well a person increases revenues or reduces expenses?
  • What processes do you have in place for employees to report when they feel that procedures conflict with the mission statement? How are those reports handled?
  • What procedures do you have in place to update the mission statement, when needed?
  • As you read through this checklist, what items would be important to add or edit to match your business’s unique needs? Who will spearhead that initiative? What is the deadline?

Rules of Engagement: The Leading Role of Women

To be successful in the workforce today, and throughout your life, you must successfully engage with people from the beginning to the end of each day. Often, it’s with people whose viewpoints don’t always match your own. And when viewpoints don’t match but you need to resolve the differences, it’s crucial to be able to effectively negotiate with the other parties to create a mutually-agreeable solution.

Quality negotiation skills are vital in situations such as accepting a job offer, asking your boss for a raise or to boost your workplace benefits, or when an organization to which you belong is making decisions that will impact people’s lives.

Traditionally, women have been more reluctant to negotiate than men, which means they have disproportionately suffered from the costs associated with not negotiating. Even today, there is a frequently-noted “confidence gap” between the genders, with one study showing that only 7 percent of women attempted to negotiate their salaries, whereas 57 percent of the men did.

Women are as competent as men in the workforce, with global studies by Goldman Sachs and Columbia University demonstrating that companies employing women actually outperform their competitors on every measure of profitability. So, the issue is confidence, not competency – but, because confidence is a critical component of success, this article will share information about how women can successfully engage and negotiate with others to receive what they deserve.

First, here is a definition of negotiation and why it’s necessary.

Nuts and Bolts of Negotiations

A negotiation is a process in which two or more parties attempt to resolve differing needs and interests through a series of communications. An employer, for example, may want to offer someone higher wages, but needs to consider the overall profitability of a company. Meanwhile, an employee may understand and support the need for a thriving business, but also needs to earn a certain wage to support his or her family.

Employers and employees negotiate because they each have what the other one needs, and they believe they can obtain a better outcome through the process than if they simply accept what the other party is offering. Sometimes, negotiations occur because the status quo is no longer acceptable for one or both parties. Negotiations take finesse because, besides dealing with specific tangible points (wages, insurance benefits and perks, as just three workplace examples), emotions play a part and ongoing relationships are involved. The parties are choosing to try to resolve their different positions through discussions, rather than arguing, or ending the relationship, having one person dominate the relationship or taking the dispute to another party with more authority.

So, here are helpful tips to help you to effectively negotiate for what you deserve.

Six Negotiating Tips for Women

Tip #1 Be Prepared

First, you must clearly define the issues involved and prepare for the negotiations. Be crystal clear about what you want to accomplish, your opening offer, your resistance point (the point at which you would be willing to walk away from the bargaining), and what alternatives you have if the negotiations don’t culminate in a solution that is acceptable to you.

Also, as much as possible, know relevant information about the other party to the negotiation. What is he or she likely to want? Understanding where this person is coming from and what he or she wants to accomplish will help you to manage the negotiation process more effectively.

Tip #2 Be Aware of Fears and Address Them Appropriately

Common negotiating fears include:

  • that your position will not be solidly presented
  • looking incompetent
  • liking people and wanting to make them happy (but perhaps not being able to give them what they want!)/not wanting to affect someone else in a negative way
  • worrying about failure
  • feeling uncomfortable about talking about money
  • aversion to conflict, overall

Sometimes simply recognizing your fears can be enough to put them into context and allow you to move forward. Other times, they point out weaknesses in your preparation – and, in that case, your fears can help you to solidify your research and negotiation approach. Overall, it can help to reframe your wants, focusing on the value they will bring to the other party, and to be prepared to share how your approach can solve the underlying problem of the other party.

Some women must also work on silencing their inner critic, a critic that might be saying how only “bitchy” women negotiate or that you somehow don’t deserve the full benefits of your hard work. Again, you can use these fears to identify places you need to bolster up your attitude and solidify your approach.

Tip #3 Recognize and Optimize Your Negotiation Style

Multiple negotiation styles exist, each on the spectrum of assertiveness and cooperativeness. Here are summaries of common styles:

  • Competing (high in assertiveness, low in cooperativeness): these negotiators are self-confident and assertive, focusing on results and the bottom line; they tend to impose their views on others
  • Avoiding (low in assertiveness and cooperativeness): these negotiators are passive and avoid conflict whenever possible; they try to remove themselves from negotiations or pass the responsibility to someone else without an honest attempt to resolve the situation
  • Collaborating (high in assertiveness and cooperativeness): these negotiators use open and honest communication, searching for creative solutions that work well for both parties, even if the solution is new; this negotiator often offers multiple recommendations for the other party to consider
  • Accommodating (low in assertiveness, high in cooperativeness): these negotiators focus on downplaying conflicts and smoothing over differences to maintain relationships; they are most concerned with satisfying the other party
  • Compromising (moderate in assertiveness and cooperativeness): these negotiators search for common ground and are willing to meet the other party in the middle; they are usually willing to give and take and find moderate satisfaction acceptable

Simply by recognizing your style, you can highlight your strengths and know where to work on weaknesses. This isn’t to suggest that the process will be quick and easy, but it can be a vital step of the process in helping you get what you deserve on an ongoing basis.

Tip #4 Practice!

Becoming effective at negotiating seldom occurs overnight and it can be helpful to first practice your negotiation skills in areas where the process may not feel as intimidating. These can include negotiations:

  • for resources, whether it’s asking for more equipment or to hire more people
  • about how to use resources; with a common purpose, solutions can be reverse engineered fairly easily
  • where you have expertise
  • with big companies where nothing is personal
  • where you have evidence to support your position, including facts, data and logical reasoning

Consider practicing what you’ll say in front of a trustworthy friend or colleague, or practice in the mirror. Imagine different scenarios for the upcoming negotiation and prepare how you might answer, doing so by answering out loud (which is quite different from simply running ideas through your head).

As you become more experienced with the process and as you experience some successes, even relatively small ones, this will help you to gain confidence and become better at negotiating, overall. This will then help to prepare you for more challenging or complex bargaining processes.

Tip #5 Fairness is Important

As long as both parties are committed to the relationship and believe there is value in coming to an agreement, negotiations can typically proceed. If one or both parties, though, are unreasonable, uninformed or stubborn – or listening to advisors with those characteristics – negotiations can fall through.

Or, if one party doesn’t necessarily need the deal and/or isn’t in a hurry – or knows that the other party is without other options and/or in a time crunch – then negotiations may not end up being fair in the long run.

You can’t change how fair the other party will be, but you can determine if your own position truly is fair. Don’t use the “gender card” to get your way, as just one example, because fairness and equality should be at the heart of every negotiation. Conversely, don’t accept an unfair agreement just because, for example, you’re tired of negotiating or you don’t think the situation can ultimately be fairly resolved.

Tip #6 Calmly Ask for What You Want

Be calm, be professional. Unfair as it may be, women who are negotiating can be watched especially closely to see if they show signs of emotion, whether anger or excitement. Ask for what you want, be willing to pause to let the other party consider what you said (rather than quickly filling in the silence) and then respond appropriately.

Always keep your pre-established resistance point front of mind. But, having said that, if a granted concession is unexpectedly greater in one area of more complex negotiations, consider if and how you might be willing to adjust your resistance point in another area as part of the overall negotiations.

Understanding Negotiation Terminology

Another way to close the confidence gap is to ensure you understand what negotiation terms mean and can use them – confidently. We’ll use the example of an employer-employee wage negotiation as our example.

Each person will have a target point, which are the wages he or she would like the other party to agree to. The difference between what an employee wants to be paid and the employer wants to pay is the bargaining range. Meanwhile, the resistance point is where a party would walk away from negotiations; if too low of a wage or raise is proposed, an employee may begin job searching or a job candidate may decline an offer; the employer also has a point at which he or she will reject a wage request and end negotiations.

When the buyer (employer) has a resistance point that’s above the seller’s (employee), this situation has a positive bargaining range. The employer, in this case, is willing to pay more than the employee’s minimum requirements, so this situation has a good chance of being satisfactorily resolved. With a negative bargaining range, though, one or both of the parties must change their resistance point(s) for there to be a possibility of resolution.

In a wage negotiation scenario, either the employer will offer a starting wage or raise, or an employee or job candidate will request a certain dollar amount; the first person to name a dollar amount is making the opening offer. If at least one of the parties has a BATNA – best alternative to negotiation agreements – then he or she will probably approach the discussions with more confidence, having another alternative. So, if an employer offers someone a job, but has another excellent candidate waiting in the wings, the employer has another alternative and can set a higher and/or firmer resistance point. Conversely, if an employee or job candidate has a unique set of skills that are especially needed today, that person probably has more options in the job market – perhaps even other pending offers. The quality of a negotiator’s alternatives drives his or her value by providing the power to walk away and/or set a higher and/or firmer resistance point.

Bargaining Styles

Plus, there is more than one type of bargaining style. One way to differentiate them is to divide them into distributive bargaining and integrative bargaining.

In distributive bargaining, parties’ needs and desires are in direct conflict with one another’s, with each party wanting a bigger piece of a fixed tangible such as money or time, so these negotiations are typically competitive. Parties are not concerned with a future relationship with the other person. A slang term for this type of negotiation is “playing hardball” or “one upping” someone. Strategies often include making extreme offers, such as an employer offering a very low wage or a job candidate asking for an exceptionally high one. Tactics include trying to persuade the other party to reconsider his or her resistance point because of the value being offered – in this example, the job candidate might say that a high salary was required because of his or her abilities or an employer could say that lower wages would be compensated by a great work environment.

With integrative bargaining, though, the goal is win-win collaborations that will provide a good opportunity for both parties. The employer would acknowledge the employee’s value and need for a decent wage, and negotiate accordingly, while the employee or job candidate would recognize the value of working at a particular company as well as the fact that the employer has numerous other financial commitments to fulfill. They recognize that they need one another to maximize their respective opportunities and negotiate from a place of trust and integrity, with a positive outlook that recognizes and validates the other party’s interest in the transaction.

Here’s an interesting psychological truth. Negotiators are more satisfied with final outcomes if there is a series of concessions rather than if their first offer is accepted, because they feel they could have done better.

Salary and Benefits Negotiation Tips

When negotiating at a workplace, don’t focus solely on wage or salary. Also discuss benefits offered and workplace perks – meaning the entire package. This can include, but is not limited to, health care coverage, life insurance, retirement programs, vacation time and flextime. If you’re job hunting, investigate what companies are offering. Where do you think the place you’re interviewing falls on that spectrum? What is the minimum pay level that you’re willing to accept? What is your preferred wage? What benefits are important to you?

If you want to work at a particular company, but the pay rate isn’t quite what you want, ask if you can have a salary review in, say, six months. This doesn’t mean accepting a salary that is clearly sub-par, nor does it mean that you should try to put more pressure on a potential employer who is already offering you a good deal. It is simply something to consider in relevant circumstances.

What workplace perks might be desired? Would a company cell phone help you? Better equipment or software? If so, you could consider accepting somewhat lower pay if you get more tools to do your job.

Or, if you have children, you could negotiate coming in half an hour later so that you can take them to school or schedule a lunch break that coincides with when you need to pick them up. If you bring crucial skills to the negotiating table, you’re more likely to get these concessions than if you are entry-level.

If relevant, ask about company policy if you become pregnant. How acceptable is the policy to you? How important of a negotiating point is this for you? What about if you are injured in the workplace? Educate yourself on your workplace rights before negotiations occur, as well as company policy. If you are valuable to the business, perhaps you can negotiate some additional flexibility.

Who should be the first to make an offer? Some experts believe that, if you allow the other party to provide a starting dollar figure, he or she has shown his or her hand. But, research indicates that final figures tend to be closer to the original number stated than what the other party had originally hoped.

What NOT to Do

Beware of “between”! It probably feels reasonable to ask for a certain salary range – or range for a raise. But if you do that with a current or prospective employer, you have basically tipped your hand as far as how low you would go. Using the word “between” is actually a concession!

Another risky term: “I think we’re close.” A savvy negotiator will recognize “deal fatigue” on your end and perhaps stall in the hopes you’ll concede, just to complete the deal.

For Best Results

People tend to feel more confident when negotiations focus on an area of their expertise and/or where solid evidence exists to back them up. Overall, success is achieved when you first:

  • Determine the interests of the other party
  • Embrace compromise
  • Observe the Golden Rule, treating others as you would like to be treated: fairly and reasonably, without defensiveness
  • Be prepared, both in factual information and in strategy

Keeping these suggestions in mind will help you to achieve success in all areas of life.

Staff Training: Teaching, Motivating and Developing Your Team

In the past, some companies offered staff training at two times only: when someone was new to the company and when a problem arose that they wanted to correct. The value of training is so much greater than orientation and problem solving, and today’s companies are more likely to utilize a form of ongoing education, allowing practices to build much more motivated, educated and proactive teams.

The most effective trainings are ones that truly engage your employees, so the quality of what you offer and the topics you choose are of prime importance. It’s also recommended to make a comprehensive, well developed training program, consistently provided, rather than sporadically offering trainings when someone comes up with an idea.

This article will share ways to create a staff training program that truly adds value to your practice and genuinely teaches, motivates and develops your team.

Orientation Training

This is a crucial element of your overall training program because this is when you can share policies and procedures with your new employee; have him or her receive and sign for an employee manual; discuss company culture with your new hire; answer any questions he or she might have; and so much more.

This is the single best time to effectively onboard your new team member, aligning him or her to your practice’s goals and values. Plus, as you consistently onboard each new employee in the same way, this can significantly help in creating a shared team vision, and can go a long way in preventing a conflict of significance from building.

This is also when you can discuss job responsibilities and timelines, along with who reports to whom, where to go for help, and so forth. If you’re going to pair your new employee with a mentor with more experience at your practice, this would be a good time to introduce them and set goals. At your orientation training, you can also share details about your ongoing training program for practice employees.

Ongoing Training Programs

Next, continuing education can be a combination of the following:

  • reviews of the policies and procedures of your practice; this could be, for example, an annual review of the entire employee handbook or reviews of specific sections of it at select times of the year
  • training in new technologies such as your practice software, or with new equipment used to care for animals
  • seminars on topics like active listening, conflict resolution, sexual harassment prevention, leadership development, effective communication, diversity, customer engagement, and productivity

In some instances, members of your practice could lead the training. Other times, bringing in an expert who doesn’t work at the practice can add variety and a valuable outside perspective. Sometimes, this expert could be from another veterinary practice, and he or she can share how his or her workplace successfully handles an aspect of work. Or, the person might not be from the veterinary industry, at all; rather, he or she may be in expert in social media strategies, ones that can be applicable to growing your practice.

As you plan and schedule these trainings, it can be helpful to determine whether you are focusing on enhancing the technical skills of team members or assisting in their personal development—or some of both. The advantage of a combination approach is that your employees will become more educated while also improving upon their critical thinking and problem-solving skills; employees with this range of abilities are more likely to come up with creative solutions to challenges and forward new ideas to consider.

Each practice will, to some degree, have differing needs and goals. As just one example, if employees in your practice are already polished in their writing skills, it would be less likely that you would focus on business writing trainings, whereas, another practice may have employees who need writing enhancement. Conversely, the other practice may have employees who are quite technologically-savvy, while perhaps some of your employees could use supplementary training in software use. Determine what skill gaps exist and fill them.

It can help to partner with relevant associations and community organizations with resources that provide what you’re looking for in employee training. Also, consider asking your employees what they’d like to see in educational opportunities at your practice. You can do an anonymous survey or hold a meeting to discuss possibilities.

You might decide to hold your trainings once a month, perhaps shorter lunch-and-learn sessions, or as breakfast meetings. It’s often better to have shorter trainings more often, rather than longer trainings every once in a while. Do your best to minimize distractions during the trainings so that employees can focus on learning, although this isn’t always possible at a veterinary hospital. There could be a dog needing emergency surgery that arrives in the middle of your lunchtime meeting, but make it a goal to allow employees to truly focus on training materials.

Also, make it fun! Nobody wants to hear lectures that drone on and on, so incorporate movement and interaction, as it makes sense. What about role playing? Turning certain topics into games? Not every single topic will lend itself to a light approach, but it’s surprising how many really can.

Using the Power of Technology

Consider also mixing in some computer-based trainings. For example, there could be a valuable conference going on that was too expensive or too far away for your employees to attend, but you may be able to access it livestreamed, either free or for an affordable fee. Other times, you can buy video recordings of these trainings and use them to educate your employees.

With today’s technology, it’s much easier and cost effective than it used to be to create your own customized trainings. Perhaps you could create an orientation video for new employees that specifically targets your practices policies, work culture, and benefits. You could also highlight the special expertise of the veterinarians, managers or other employees at your practice. Your videos may even become in demand by other practices in need of your knowledge and experience.

Pay attention to how well online trainings work for your employees. Some people learn well from computer learning while others do much better when sitting face-to-face with a teacher. Over time, you’ll discover what mixture works best for your practice.

After a Training Ends

Training shouldn’t take place in a vacuum. It won’t do your practice any good if you provide an excellent training on something such as handling especially fearful animals—and then, because you’re busy, not use the new ideas for calming them down due to time constraints. If something is important enough to become part of a staff training, then it should be important enough to incorporate into your work routines. Managers should be a role model for these behaviors.

Get feedback about trainings from your employees. You could ask them to fill out a brief survey after each session, while their memories are still fresh; and when you’re planning the next year’s trainings, you could ask employees to rate which ones have been the most helpful over the past year. Also, consider asking your skilled employees to lead your trainings.

The Bottom Line

As you enhance the skills, both hard and soft, of your veterinary team, you’ll likely improve the efficiency of your practice, which can boost your profits. More profitable practices can pay their employees a higher wage and offer better benefits. So, it would be accurate to say that training your staff can both grow your practice and serve as a recruitment and retention tool.

State-Law Savvy: How to Find and Follow State Employment Laws

Employment laws have been created to protect workers from wrongdoing in the workplace, addressing issues such as the following:

  • minimum wage requirements
  • protection from discrimination
  • workplace safety
  • child labor laws
  • workers’ compensation

These laws have been constructed to protect both the employee and the employer. In the United States, the relationship between employer and employee is known as a “master-servant” situation because the employee is expected to perform specified duties under the auspices of the employer. Labor laws have been created to prevent employers from abusing their power. These laws continue to be created and modified with the changing times.

Two good examples of employment laws created to balance the master-servant relationship include the following:

  • Fair Labor Standards Act (FLSA)
  • Age Discrimination in Employment Act

They aren’t the only laws providing this balance, but are good examples of the kinds of laws created to help ensure that employers cannot discriminate against their employees or otherwise abuse their position. The goal is not to create laws that simply favor the employee over the employers, but to create a more balanced and equal relationship. For example, employers are protected in that if they don’t believe a person is capable of doing a particular job, they are not required to hire the person. They also do not have  to keep someone indefinitely who isn’t performing to a reasonably-established standard.

There are federal laws addressing each of these topics, and states also make their own laws, as well. States cannot create laws that contradict existing federal laws, and if no relevant state law exists, then the corresponding federal rule applies.

Next, we will address state laws in two different but equally important ways:

  • how to discover what the laws are in your state
  • how to best follow those state-specific laws

Finding State-Specific Employment Law Information

You can find answers to questions about employment law, in general, through the United States Department of Labor. There are also links to state-specific law information. Ways to contact this federal agency include:

U.S. Department of Labor
AGENCY NAME
OFFICE NUMBER

200 Constitution Ave NW
Washington, DC 20210

The U.S. Department of Labor may direct you to an agency in your own state to get the state-specific answers you need, so you will often find answers more quickly by going directly to your State Labor Office; you can find a comprehensive contact list here: https://www.dol.gov/whd/contacts/state_of.htm

Another way to find this information is to talk to an attorney well versed in your state’s employment laws. This is often the best way to understand how a particular law applies to your specific situation.

Following State-Specific Employment Laws

Step one to following any law, of course, is to thoroughly understand that law and its implications. You will also need to investigate how your specific situation fits into applicable laws.

Here’s just one example of an employment law that differs from state to state: final paycheck laws. Because the FLSA does not address this issue at all, you need to look to state laws to find out how and when you must issue a final paycheck to an employee leaving your practice. Does it matter, for example, whether the employee was fired or if he or she quit? Sometimes, yes. Sometimes, no. It depends upon the law in your state.

Regarding finally paychecks, four states currently have varying laws on this topic: Alabama, Florida, Georgia and Mississippi. In Missouri, no law exists about when you must give a final paycheck to an employee who quits, but a fired one must receive it immediately. In Ohio, no state law dictates when a fired employee gets his or her last paycheck, but one who quits must receive it by the first day of the month for wages earned in the first half of the prior month, or on the fifteenth of the month if wages were earned in the second half of the previous month.

So, by examining just one state employment law in six different states, it’s easy to see the wide variety inherent in today’s laws. When someone leaves your practice, how vacation time payout is handled is also subject to varying state laws. Some states have no laws whatsoever on the subject. Others say accrued vacation time must be paid out, while others state that it must be paid out if the employee agrees to certain conditions—and, for example, in Maryland, employers can create a written policy that states they don’t pay out for accrued vacation at all. If employees are notified of this policy when first hired, this policy can stand.

Here’s an example of one type of employment law that is covered by federal law, in which a state is allowed to offer more to employees, but not less: minimum wage laws. You can find information about each state’s laws at the U.S. Department of Labor’s site (https://www.dol.gov/whd/minwage/america.htm) via a color-coded map that indicates how that state’s laws compare to the federal standard. Hover your mouse over your state to see the current rate for you and click on your state to find more detailed information about applicable laws.

For example, in 2018, the federal wage law is $7.25. Click on Nevada in the map described above, and you can see that they have established a two-tiered system. If an employer doesn’t offer health insurance benefits, the minimum wage is $8.25, with premium pay required on days that exceed eight hours or weeks that exceed 40. However, if the employer does offer health insurance benefits and the employee accepts them, then the minimum wage is the same as the federal rate of $7.25.

Meanwhile in Missouri, they have established a minimum wage rate of $7.85, with no daily premium pay requirements, and premium pay is only required if an employee works more than 40 hours per week. Employees who work for a retail or service business with gross annual sales of less than half a million dollars per year, though, are not required to receive more than the federal minimum wage rate. And, if an employee works in a “seasonal amusement or recreation” business, premium pay is not required until “after 52 hours.”

In Arizona, the minimum wage is $10.50 per hour. In Oregon, it is $10.75, with premium pay after 40 hours – and, if someone works in “nonfarm canneries, driers, or packing plants and in mills, factories or manufacturing establishments (excluding sawmills, planning mills, shingle mills, and logging camps)”, premium pay is required after ten hours in a day.

Not all examples apply to veterinary practices, of course, and the point of these examples is to show how widely state laws can vary. So, it’s wise to fully use the resources available to you through government offices and websites and, when needed, through advice of employment attorneys. Laws can change, so make sure that your practice is state-savvy for this year’s laws.

Following State Laws: Vital for Practice Success

Because employment laws are created to help maintain a healthy balance between employer and employee, carefully following them helps you to create and/or maintain a healthy work environment for everyone in the practice. Conversely, by not following these laws, you’ll open your practice up to a significant risk for lawsuits.