Practice Challenges

The successful ownership and management of an eyecare practice is no less demanding in 2008 than in past years. Decisions associated with growing the practice (or even maintaining it as a strong, profitable enterprise), possible considerations of whether or not to buy another practice, or merge or sell a practice are but a few of the considerations that some of our readers often ponder.

No less are the challenges of finding and retaining key staff, or transitioning from your practice individuals whose performance—even after counseling and development opportunities, falls below the acceptable standards you have set. And add to the list of ongoing changes in legislation and federal and state laws, regulations, statutes, and tax and benefit guidelines.

Our continuing objective at Business Essentials is to be a primary source of information to assist you in the ownership and management of your practice. To do so, we will continue to provide you with timely and relevant information. If we are achieving our objective, please take a moment and let us know. Likewise, if there are topics or there is information of relevance that would be of benefit to you, please include your suggestions.

Hedley Lawson, Jr. is the managing partner of Aligned Growth Partners, LLC, a strategic, operational and organizational consulting and executive search firm. Lawson also serves as consulting editor for Jobson's Business Essentials monthly e-newsletter.

Personnel Files

Q: What is considered a "Personnel File?" Which documents are considered part of an employee's personnel file?

A: The term Personnel File is broadly defined. Basically, personnel files include any document related to the employment relationship, such as:

• Any document used to determine employees' qualifications for employment, promotion, or additional compensation, and
• Any document used to discipline or discharge employees.

Generally, employees may inspect most of the documents in their personnel files. But, employers have the right to control an employee's inspection.

The following documents are usually considered part of employees' personnel files:

• Employment and re-employment applications;
• Payroll authorization forms and hiring agreements;
• Notices of layoffs, leaves of absence, and similar matters;
• Notices of wage attachments or garnishments;
• Notices of union requirements, membership, and dues;
• Education and training notices and records;
• Performance appraisals or interview evaluation ratings;
• Attendance and absence records, including time cards;
• Individual production and quality records;
• Documents about investigations of discrimination or harassment; and
• Grievance and unfair labor practice documents.

Employers are required to keep certain matters about employees confidential. As such, employers must keep sensitive documents in a separate file that may be seen only by the employee and appropriate members of management who are involved in a particular matter.

For example, companies must keep employees' medical information in a separate, confidential file, and follow special rules before disclosing the information.

Other types of confidential documents include:

• Records of legal claims filed by employees against employers;
• Correspondence between employers and lawyers about potential legal issues regarding employees;
• Documents about employee misconduct prepared for litigation;
• Self-identification forms completed for affirmative action purposes;
• Records of garnishments against an employee; and
• Immigration status forms.

Employers that fail to allow employees to inspect or receive copies of documents in their personnel files as required may be charged with a misdemeanor and face fines or imprisonment.

When in doubt, you should permit employees to inspect their personnel files. If you deny the inspection, and a claim is filed, you may be exposed to several different penalties for failing to allow access to various documents.

Submit your questions to one of our experts.

—Hedley Lawson, Jr.

How to Effectively Handle a Termination

Terminating an employee is one of the most difficult tasks a manager or business owner can undertake. A poorly handled termination can have a severe impact, leaving a disgruntled employee who might be tempted to litigate or file a civil rights violation claim. It also can mean low morale among the employees who remain and potential damage to the company's reputation.

Employers must always pay special attention to the actual termination process. Here are a few helpful hints for you to consider when faced with an employee termination.

• Setting up the meeting. Arrange a time to talk with the employee in person. Do not procrastinate once you have made the decision, except if you are awaiting counsel from your attorney or HR staff. Once the decision has been taken, decide the appropriate person to convey the termination message. This is most often the employee's immediate manager. All managers should be properly and thoroughly trained, coached and receive guidance about how to conduct a termination meeting."

• Decide if it is appropriate to have a witness, such as a member of the human resources team, present. If there is a concern that the employee may be hostile or angry, a trained and experienced witness should be there to help de-escalate the situation and document the meeting. In the event you believe there may be the potential for violence, be sure to consider security issues, such as alerting building security and having them close at hand.

• Meet in a quiet, neutral location. You should deliver the message in a neutral area, such as a conference room. Avoid conducting such meetings over lunch or dinner, or in a public place. You want to ensure that the conversation will be private. Also, consider the day on which to meet with the employee. It is generally considered best to terminate an employee in the middle of a workweek rather than on a Friday. As well, avoid employee terminations around holidays or dates of significance to the employee, such as a known anniversary, birthday or family event.

• Communicating the decision. The meeting with the employee should be brief, respectful, and to the point. The meeting needs to only last long enough to communicate the decision and reason for the decision. You should engage in a candid, honest discussion about the reasons for the termination.

• Never exaggerate. You should never exaggerate the employee's poor performance or over-justify the decision. Rather, be firm and direct, citing the decision, the reasons, and the information about what will happen next. And always refrain from disrespectful or intemperate remarks. You should remain calm and professional, and attempt to preserve the person's dignity. It's also a good idea to take time to practice your remarks beforehand.

• Address administrative issues. Be sure to discuss and have available all important administrative documents, like their final pay check, COBRA information, vacation pay, and other state and legally required information. Make sure to retrieve keys, badges, company cell phones and all related company property. Equally important, ensure that all computer passwords and access have been properly secured or deleted, and that all "hard and soft files" are identified and secured. Take a moment to review with and provide to the individual a copy of their signed Trade Secret, Confidentiality and Non-disclose Agreement.

• Managing the transition. After the termination meeting, notify other staff members as soon as possible to prevent the spread of inaccurate or untrue information. Do not communicate the reasons for the termination, but do ensure people understand that the person has transitioned from the company and who will assume their prior duties and responsibilities in the interim. If appropriate, you should notify customers and clients of a change in assigned staff and assure them of a smooth transition.

Terminating an employee is never easy and always offers challenges. However, you can handle terminations most effectively when you are properly prepared and have a well charted process prepared in advance.

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A Quick Exit Interview Primer

Companies that utilize exit interviewing typically ask a variety of questions of departing employees. The key to conducting effective exit interviews is to focus on areas where you feel you can improve your eyecare practice.

Here are some typical interview questions being included on exit surveys, according to companies specializing in outsourced exit interviewing processes. Depending on the answers, most surveys include follow-up questions that hone in on specific topics:

• Did you find your new job or did it find you?
  

• Were you satisfied with your compensation and benefits?
  

• How did you feel about your supervisor?

• How did you feel about the working relationships you had with members of your team?

• Did your work give you a sense of accomplishment?

• Are there things we could have done to make your job more fulfilling?

• Did you feel you had opportunities to expand your knowledge and learning?

• What are some things you would address that are problems in your company?

• What competencies do you feel were required to do your job and did you have them?

• What did you like about your job? What did you dislike about your job?

• If there were an opportunity to return, would you consider coming back to work here?

Utilizing these types of questions to gain insight from a departing employee can be very revealing. More importantly, asking these same questions of current employees periodically may prevent the loss of a valued colleague.

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DOL Delays Deadline for Electronic Filing of Benefits Reports 

After nearly a year's delay, the U.S. Department of Labor has issued the final rules for filing Form 5500, the annual report employers must submit for their employee benefit plans. The delay means that plan sponsors now have until Jan. 1, 2009, to comply with a new mandatory electronic filing system.

The federal Employee Benefits Security Administration (EBSA) originally planned to release the regulations in Dec. 2006 but did not publish the finalized revisions in the Federal Register until Nov. 16, 2007. In the proposed regulations, the original effective date for requiring plan sponsors to file Form 5500 electronically was Jan. 1, 2008.

While employers and business groups have praised the electronic system, stating that it could provide welcome administrative relief to benefits managers, the same groups claimed that plan sponsors would not have enough time to prepare and comply with the new requirements and asked the EBSA to delay the effective date by at least 12 months.

After receiving dozens of comments and extending the comment period by 30 days, EBSA officials responded to the concerns and changed the effective date, much to the relief of many business and benefits advocacy groups.

The EBSA's attempt to simplify Form 5500 and create a new shortened version for small businesses also drew praise from employers. However, many of the comments asked the EBSA to clarify further which forms and benefit schedules plan sponsors needed to submit for their annual report. EBSA officials have stated that they attempted to address the concerns expressed in the public comments and that the 11-month delay was needed to review the comments and finalize the regulations.

"Publishing the final rules completes the first component of our fee transparency initiative for employee benefit plans," said Bradford P. Campbell, assistant secretary of labor for EBSA, in a statement. "The expanded reporting of compensation received by service providers will make it easier for plan officials to understand and monitor investment fees charged to plan accounts and revenue sharing arrangements that compensate brokers, pension consultants and other investment service providers."

From SHRM Online

New Form I-9 a Requirement for Employers Effective Dec. 26, 2007

Employers will be required to use the new Employment Eligibility Verification Form I-9 effective Dec. 26, 2007, or risk fines and penalties, according to U.S. Citizenship and Immigration Services (USCIS), which published details of the requirement in the Federal Register on Nov. 26, 2007. In the new Federal Register notice, USCIS also said that it will allow a 30-day transition period before use of the new Form I-9 becomes mandatory. During the transition period, employers will not be subject to fines or penalties for using the old Form I-9, but once the transition period ends, employers who do not use the new Form I-9 could face fines or other penalties, as mandated by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

The Illegal Immigration Reform and Immigrant Responsibility Act requires employers to use Form I-9 to verify the identity and work eligibility of all new employees (including U.S. citizens) at the time they are hired. Completed I-9 forms are to be maintained by the employer, in hard-copy or electronic format, for three years after the employee's date of hire or for a year after the date the employment is terminated, whichever is later, USCIS said. Completed forms are not to be submitted to the government but must be retained.

The revised Form I-9 removes five documents from "List A" that employers may accept from new hires. The revised List A—which is to "Establish Both Identity and Employment Eligibility"—adds one document to the index. The documents employers can accept under List A on the new form I-9 are:

• U.S. passport.
• Permanent Resident Card or Alien Registration Receipt Card (Form I-551).
• Unexpired foreign passport with a temporary I-551 stamp.
• Unexpired Employment Authorization Document that contains a photograph (Form I-766, I-688, I-688A or I-688B).
• Unexpired foreign passport with an unexpired "Arrival-Departure Record," Form I-94, bearing the same name as the passport and containing an endorsement of the alien's nonimmigrant status, if that status authorizes the alien to work for the employer.

The documents removed from List A and no longer acceptable are:

It's Your Business
Practice Challenges

From the Top
How to Effectively Handle a Termination

Ask the Experts
Personnel Files

People Management
A Quick Exit Interview Primer

Office Space
Do You Have Reference Immunity?

Rules and Regulations
DOL Delays Deadline for Electronic Filing of Benefits Reports

New Form I-9 a Requirement for Employers Effective Dec. 26, 2007

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Do You Have Reference Immunity?

Many employers are reluctant to provide references for former employees because the risk of giving a negative reference can lead to a defamation lawsuit. To deal with this problem, California has a reference immunity law.

Under this law, truthful communications about job performance or employment qualifications of a current or former employee are privileged—and can't be used as the basis for a defamation claim—as long as the communications are based on credible evidence and made without malice. Privileged communication includes answering the question, "Would you rehire the employee?" The privilege, however, doesn't apply to comments about an employee's protected speech or activity that is protected under federal or state law.

Even with this immunity, however, California employers need to take precautions when giving references. Here are some tips:

1. Insist on a written authorization from the former employee who will be the subject of the reference. Keep this authorization on file along with a copy of the reference (or a written summary of the reference if it was given orally).


2. Confine your remarks to an objective evaluation of the job performance and job qualifications. Or, safer yet, make it a policy and practice to only confirm job title, dates of employment, and wage/salary rate.

Easy-reference to Web resources about human resource policies and rules

Termination Process

Exit Interviewing

Personnel File

U.S. Department of Labor

Form 5500

Employee Benefits Security Administration (EBSA)

SHRM Online

Employment Eligibility Verification Form I-9

USCIS

The Illegal Immigration Reform and Immigrant Responsibility Act

Reference Immunity Law