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GW GARFUNKEL WILD, P.C. ATTORNEYS AT LAW Great Neck, NY (516) 393-2200 Hackensack, NJ (201) 883-1030 Stamford, CT (203) 316-0483 Albany, NY (518) 242-7582 © 2018 GARFUNKEL WILD, P.C. 5 th Annual NY Metro ASC Symposium: Top 5 HR Issues That Affect Your Bottom Line November 2, 2018 Presented by: Tom Jacobs Andrew Zwerling Sal Puccio Chief Executive Officer and Partner/Director Partner Co-Founder of MedHQ Garfunkel Wild, P.C. Garfunkel Wild, P.C.
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GW G A R F U N K E L W I L D , P. C .A T T O R N E Y S A T L A W

Great Neck, NY(516) 393-2200

Hackensack, NJ(201) 883-1030

Stamford, CT(203) 316-0483

Albany, NY(518) 242-7582

© 2018 GARFUNKEL WILD, P.C.

5th Annual NY Metro ASC Symposium: Top 5 HR Issues That Affect Your Bottom Line

November 2, 2018

Presented by: Tom Jacobs Andrew Zwerling Sal Puccio

Chief Executive Officer and Partner/Director Partner

Co-Founder of MedHQ Garfunkel Wild, P.C. Garfunkel Wild, P.C.

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Introduction

Top 5 HR Issues That Affect An ASC’s Bottom Line:

• Sexual harassment.

• Wage and hour claims.

• FMLA/ADA/Workers’ Compensation claims.

• Company culture.

• Recruiting.

The Link Between All Five: Employee Engagement

• Employee engagement is the emotional commitment an employeehas to the ASC and its goals. Employee engagement is the extent towhich employees feel passionate about their jobs, are committedto the ASC, and put discretionary effort into their work.

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Impact of HR Risk Events

A. Negative impact on profitability.

B. Distracting to senior managers.

C. Sours organizational culture.

D. Handled correctly, can be a plus!

E. Impact on insurance rates: liability and workers’ compensation.

F. Settlement costs and other “soft” costs.

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Sexual Harassment: The Starting PointFor Discussion In New York

• Distribution Of Written Sexual Harassment Policy: Deadline OfOctober 9, 2018.

• Mandatory Annual Anti-Sexual Harassment Training By AllEmployers No Later Than October, 2019.

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What is Sexual Harassment?

Sexual harassment is a form of sex discrimination and consists of unwelcome sexualadvances, requests for sexual favors, and other verbal or physical contact of a sexualnature. Sexual harassment becomes illegal when:

1. Submission to such conduct is made either explicitly or implicitly a term of conditionof an individual’s employment;

2. Submission to or rejection of such conduct by an individual is used as the basis foremployment decisions; and

3. Such conduct has the purpose or effect of unreasonably interfering with anindividual’s work performance or creating an intimidating, hostile or offensiveworking environment.

The first two categories refer to “quid pro quo” (Latin meaning “this for that” or“something for something”) sexual harassment, in which the employee is implicitly orexplicitly requested to submit to sexual demands in exchange for employment benefits orto avoid adverse employment consequences. The third category – a hostile workenvironment – exists when verbal or nonverbal behavior in the workplace is severe orpervasive enough to create a work environment that a reasonable person would considerintimidating, hostile, or abusive

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Examples Of Sexual Harassment

• Physical - Touching, pinching, patting, grabbing, brushing against aperson’s clothing, body or hair, initiating unwanted sexual activity,rubbing or touching anyone sexually in the presence of another,exposing oneself, requiring the employee to wear sexuallysuggestive clothing, blocking a doorway or impeding a person’smovement.

• Verbal - Name-calling, belittling, sexually explicit, provocative ordegrading language, sexually explicit jokes, comments about aperson’s anatomy, questions or comments about a person’s sexualpractices or preferences, sexual noises or remarks.

• Visual – Sexual pictures, writing or objects, staring someone up anddown, leering, sexually oriented gestures, winking, blowing kisses,standing or sitting too close, inappropriate emails and internetusage, gawking or trying to embarrass a person who looksdifferent.

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Harassment Factors To Consider

• Who Can Be A Victim? Employees, interns, independentcontractors and vendors or those employed by a companyproviding services in the workplace or third parties visiting theentity. Victim does not have to be the person targeted by theharasser, but can be a third party who is offended by it or finds itunwelcome.

• Who Can Be A Harasser? Anyone in the workplace. Managementand supervisors, co-workers, subordinates, patients, residents,clients or customers, other non-employees (vendors, contractors,interns, security), members of the public (visitors).

• Gender is not a factor. Sexual harassment can occur betweenmales and females, or between parties of the same sex. (The term“sex” includes sexual orientation, gender identity and the status ofbeing transgender.) Sexual harassment that occurs because thevictim is transgender is also unlawful.

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Harasser’s Intent Is Irrelevant

• Harassment is unlawful even if it is not motivated by any sexual ordiscriminatory intention.

• It is no defense that one engaged in behavior that may in the pasthave been deemed acceptable or tolerated.

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The Situs Of The Harassment

Sexual harassment can occur at functions outside the workplace. Locationsoff-site and during off-hour activities can be considered extensions of theworkplace. For example:

• Annual meetings.

• Business trips.

• Holiday parties.

• Sporting events.

• On social media.

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Who Can Be Liable?

• Entity.

• Supervisors who fail to intervene and report. Supervisors have amandatory duty to report harassment where they know or havereason to know of its existence.

• The harasser.

• Peers who join in the harassment.

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Potential Consequences To The Harasser

• Lawsuit and personal liability.

• Loss of job.

• Loss of spouse.

• Loss of reputation.

• Loss of licensure (OPMC and OPD proceedings).

• Negative publicity.

• Potential criminal charges.

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Broader Consequences Of Harassing& Disruptive Behaviors

• Toxic work environment.

• Diminution of quality of services and productivity.

• Diminution of staff morale.

• Increased staff turnover.

• Increase in staff and patient complaints.

• Increased risks of litigation.

• Adverse effect on reputation with clinical and non-clinical staff andpatients (who may indicate dissatisfaction in patient surveys).

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Impact Of Sexual Harassment SpecificTo Medical Profession

• Negative impact on quality of medical care.

• Greater risk of medical errors and adverse patient outcomes.

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Best Practices To PreventSexual Harassment

• Consistently demonstrate professional behavior.

• Enforce policies in a consistent manner.

• Do not perpetuate inappropriate office banter; take action to stopit.

• Do not be a “silent participator.”

• Avoid sharing highly personal information of a sexual nature.

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Critical and Required Internal Policies and Practices

• Encourage the reporting of sexual harassment by victims andbystanders, and enforce a zero-tolerance policy and anti-retaliationpolicy in your ASC.

• Supervisors must report any harassment that they observe, knowof or have reason to know of, even if no one is objecting to theharassment or complaining about it.

• Do not ignore a known situation of potential or actual sexualharassment or discrimination; take complaints and reportedconcerns seriously and do not prejudge the allegations during theinvestigatory process.

• Make sure your ASC’s internal complaint process is prompt,thorough and fair in investigating suspected sexual harassment.

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Wage and Hour Agenda

• Trend toward Wage and Hour Lawsuits and Targets of Investigations/Lawsuits.

• Brief Introduction To Overtime and Related Claims.

• Specific Legal Issues, Challenges Facing Employers.

• Preventing/Defending Overtime and Related Claims.

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Why Is Overtime Awareness A Growing Concern for Employers?

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Trends In Lawsuits/Investigations

• According to figures from federal lawsuit filings, litigants filed a total of 8,954 FLSA cases between January 1, 2015, and December 31, 2015, a 253% increase from 10 years ago. For comparison purposes, plaintiffs filed 8,086 FLSA cases in 2014. And that is an increase of more than 30% since 2011.

• In 2015, the U.S. Department of Labor collected a record $248 million in back wages for over 240,000 employees who had not been paid in compliance with the Fair Labor Standards Act (FLSA).

• First Quarter 2018 = 1,847 filings already.

• Reporting does not count cases pending with DOL, State Lawsuits, or asserted pre-lawsuit.

• Much of this liability could have been avoided had the employer reviewed and changed its pay policies.

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Why The Increase In FLSA Lawsuits

Three main reasons:

1) Employers are finding it difficult to stay up-to-date on current (and ever evolving) wage and hour laws, i.e., Wage Theft Prevention Act, Increase in Minimum Wage, Change of Exemptions to Overtime, Change in Circumstance Created by Lawsuits, and/or misclassification of employees, i.e., nurses, IT Helpdesk, salaried employees.

2) Permissive Class/Collective Litigation Covers More Claims; and

3) Plaintiffs’ attorneys receive their attorneys’ fees from You (the employer). Even the smallest infraction can lead to large attorneys’ fees.

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Damages For Overtime Violations

• Actual damages – amount of unpaid hours. (Usually see unpaid overtime premium rate, i.e. straight time paid at 50 hours, but 10 hours of overtime not paid at time and one half).

• Liquidated damages – Double actual damages as a penalty. Statutory.

• Attorneys’ Fees. Plaintiffs can recover their attorneys’ fees. On collective/class actions, fees are tens of thousands of dollars.

• Personal Liability – owner/manager controlling schedule can be personally liable.

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Brief Review of Overtime And Related Legal Requirements

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Overtime Is A Federal And State Requirementfor Hourly, Non-Exempt Employees

• The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the FLSA must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.

• States have corresponding overtime laws, i.e., The New York State Minimum Wage Orders contain the State’s overtime requirements.

• Typically, State laws are more protective of employees than the FLSA.

• Differences include: rates of minimum wage, record keeping, statute of limitations, and class action v. collective action.

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Class and Collective Actions

• Collective Actions: Under the FLSA, a Plaintiff can sue on behalf of him/herself and also on behalf of a class of similarly situated employees.

– This could result in the entire office being swept up in a federal lawsuit.

• Under State law, class actions are permissible.

– Under New York State law, if a Plaintiff can demonstrate a class exists, all class members are included in the lawsuit, unless they choose to opt out.

• Typically, attorneys for employees bring a lawsuit alleging both.

• Creates an analysis of how a department or institution treats “similarly situated” employees.

• Makes record keeping and policies important.

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Applicable Time Periods for Violations

• FLSA – Two year statute of limitations, three year for willful violation.

• New York Labor Law – 6 year statute of limitations.

• Relevant because with assessment of damages, discussed later, fines and fees could be significant.

• Also relevant to record keeping policies.

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Wage and Hour Law Practice Points

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Common Errors in ApplyingOvertime Rules

• Schedule and Pay Periods.

• Tracking/Recording Overtime.

• What is compensable time.

• Automatic meal deductions.

• Discipline for working overtime.

• Improper Deductions.

• Rounding errors.

• Required compensation.

• Record Keeping.

• Dual role employees.

• Misclassification of Employees.

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Failing to retain required records

• In addition to overtime requirements, the FLSA also imposes specific record keeping obligations.

– Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records. Records on which wage computations are based should be retained for two years.

– State Laws Also Supplement FLSA Record Keeping Obligations.

• NY Wage Theft Prevention Act.

• Wage Statements.

– Dates of work covered by that payment of wages; name of employee; name of employer; address and phone number of employer; rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; gross wages; deductions; allowances, if any, claimed as part of the minimum wage; and net wages.

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Misclassification of Employees

• Exempt v. Non-Exempt.

• Independent Contractors.

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Overtime Exemptions

• The FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees, and also exempts certain computer employees.

• To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

• Note NYS change in salary level as of December 31, 2016.

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Considerations to Prevent (or Minimize) Potential Wage and Hour Claims

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Staffing Considerations ToConsider For Overtime

• Nurses paid at hourly rates – weekly hours worked, lunch breaks, pre- and post-shift work.

• Front Office Staff – receptionists, sales, marketing, insurance intake, etc. - Staff coming in early or staying late to finish paperwork or to attend meetings.

• Back Office Staff – Billing/coders, payroll, etc. - Staff working late to complete monthly billing, staying after shift or before shift to file time-sensitive claims or appeals.

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Policy Consideration to Limit Exposure

• Employers may have policies restricting overtime or requiring pre-approval, but cannot deny overtime pay if an employee actually works additional hours even in violation of policy.

• Arbitration provisions or agreements with employees to arbitrate all disputes over wages, including FLSA, NYLL, etc., and waiver of class/collective actions. Waiver must be clear and specific.

• Record keeping measures.

• Payroll company/software assistance.

• Clock in/out systems with history.

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Automate Service & Automate Compliance

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Top 10 Risks of Being an Employer

Risk Areas Level Related Risk CostWeighing

FactorFactored Risk

Low Medium High

Discrimination low medium high $25,000 $50,000 $100,000 1.00 $25,000 $50,000 $100,000

Employee

Attendancelow medium high $25,000 $50,000 $100,000 0.10 $2,500 $5,000 $10,000

Employee Work

Productivitylow medium high $25,000 $50,000 $100,000 0.25 $6,250 $12,500 $25,000

FMLA, ADA, etc low medium high $25,000 $50,000 $100,000 0.50 $12,500 $25,000 $50,000

Hostile Work

Enviornmentlow medium high $25,000 $50,000 $100,000 1.00 $25,000 $50,000 $100,000

Inappropriate

Work Behaviorlow medium high $25,000 $50,000 $100,000 0.15 $3,750 $7,500 $15,000

Involuntary

Terminationlow medium high $25,000 $50,000 $100,000 0.25 $6,250 $12,500 $25,000

Sexual

Harassmentlow medium high $25,000 $50,000 $100,000 1.00 $25,000 $50,000 $100,000

Unemployment low medium high $25,000 $50,000 $100,000 0.10 $2,500 $5,000 $10,000

Work Comp low medium high $25,000 $50,000 $100,000 0.20 $5,000 $10,000 $20,000

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Top ASC Manager HR Concerns*

* September 2013 CASA survey

3.2%6.5%

58%

6.5%

26%

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Involuntary Terminations

A. Thorough communication about job responsibility/process/method changes.

B. Transition training, conversations.

C. On-the-job coaching.

D. Career and career path counseling.

E. Planning ahead for impact of termination on others.

F. Proactive, professional termination action when warranted.

G. Effective recruiting and hiring.

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“We have found negative staff interactions to be one of the top

reasons physicians choose not to use a particular surgery center.”

– Scott Christiansen, CEO, Root3 Growth Marketing

Improving Physician Utilization

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Results

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Cost of Employee Turnover

• Not All Turnover Is The Same

– Leadership Instability

– Core Team Engagement Issues

– Support Staff Effectiveness

• Is there any such thing as “good

turnover”?

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How to Mitigate The RN Shortage?

A. Constant recruiting.

B. Networking with local associations and RN training programs.

C. Referral and sign-on bonuses.

D. Encourage proactive communication from employees.

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Managing Multi-Generations in the ASC

Millennial Branding. “The Cost of Millennial Retention Study.” 3 August 2013.

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Thank You!


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