Rules of Engagement

Employee engagement is a key topic among eyecare practice business owners and managers. Keeping employees interested and involved is viewed as essential to achieve employee retention. On the other side of the coin, nothing breeds discontent in employees more than feeling disengaged or isolated from their immediate supervisors or business owners.

Nearly one-quarter of U.S. employees in a recent Gallup Management Journal survey said they would fire their bosses if presented with the opportunity to do so. This should be no surprise since these employees feel the most disenfranchised from their bosses.

By contrast, employees’ believe that having a boss that engages and recognizes them in their work and the overall business is crucial to the success of the business and key to their personal success.

According to Gallup, only 6 percent of engaged employees say they would fire their bosses if given the chance. The Gallup research found that nearly 25 million workers who are 18 or older, or roughly 18 percent of the work force, are "actively disengaged," resulting in diminished productivity that costs the U.S. economy about $382 billion.

While the business of running your eyecare practice rests with the owners and managers of your business, the staff of Business Essentials strives to bring you, our readers, highly relevant and important information to help you more successfully engage, recognize and reward your practice staff while building a strong and sustaining business.

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.

Misconduct vs. Miscast Affects
Unemployment Insurance

Q: I hired a bookkeeper who I thought had the education and experience to do the job. After a month, it became obvious that she was disorganized, inefficient and was not doing a good job, so I terminated her. Now the Employment Development Department tells me she can collect unemployment insurance. Why?

A: A terminated employee is eligible for unemployment insurance (UI) unless the employer can prove that the termination was for "misconduct." For UI purposes, misconduct is more than simple negligence or inability to do a good job.

In most states, the general definition of misconduct makes reference to an employee who willfully or wantonly breached a duty to the employer in a substantial way, disregarding or injuring the employer’s interests.

While the definition varies from state to state and you should research the specific definition for the state in which you do business, the following reasons generally are considered to be misconduct:

• Theft of company property or property of other employees;
• Willfully or negligently damaging company equipment;
• Falsifying expense vouchers;
• Drinking alcohol on the job; and
• Engaging in altercations with supervisors or other employees.

The following reasons generally are not considered to be misconduct:

• Inefficiency;
• Failure to meet performance standards as the result of inability or incapacity;
• Inadvertence or ordinary negligence in isolated instances; and
• Good faith errors in judgment or discretion

Also, some common reasons for termination that can raise issues of whether misconduct occurred include excessive or unexcused absences, dishonesty and poor performance.

Submit your questions to one of our experts.

—Hedley Lawson, Jr.

Paying the Price for Staying Healthy

Costs for the most popular types of health care coverage are projected to increase at double-digit rates throughout 2008, according to a survey of U.S. insurers and administrators.

In its 18th National Health Care Trend Survey, Buck Consultants measured the projected average annual increase in employer-provided health care benefit costs. Insurers providing medical trends for the survey cover a total of approximately 91 million people.

As the data below indicates, costs for the most popular plans continue to increase by more than 10 percent, similar to trends reported in Buck’s 17th survey, which looked at rates at the start of 2007. In the latest survey, high-deductible consumer-driven health (CDH) plans came in at the low end of the spectrum (up 10.36 percent), notching a .75 percent decline in the rate of cost growth from the prior survey.

Health Coverage Cost Trends: By Plan Type

Source: Buck Consultants, 18th National Health Care Trend Survey

Even more dramatically, Cigna Healthcare recently reported that the upward medical cost trend for its CDH members is less than half that of its HMO and PPO plan members.

Other highlights from the Buck Consultants survey include:

• Rx drug plans. Health insurers reported an average prescription drug trend of 11.68 percent, up slightly from the 11.33 percent reported in the prior year's survey. This was considerably higher than the 4.52 percent reported by pharmacy benefit managers (who generally do not take any underwriting risk).


• Medicare supplement plans. Health insurers reported lower cost trends for plans that supplement Medicare—7.32 percent for plans with drug coverage and 6.82 percent for plans without. This reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and co-pays, according to Buck's analysis.

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Keys to Preventing Termination-Related Lawsuits

There is nothing like a termination in which the terminated employee says to you while going out the door, "l'm-going-to-sue!" There are those occasions when some people want to blame someone for their fate.

Ill-considered and hasty terminations may result in an unforeseen lawsuit. Not too surprising, most of those lawsuits are avoidable if you know what to do.

Following are a few practical and useful steps you can follow to help avoid an unforeseen and unwanted lawsuit:

1. Delay action until HR or your attorney can evaluate all the facts. Take enough time to get your HR person or outside counsel involved before you take any action. Impulsive firings, done in the heat of the moment, attract unwanted lawsuits.

The watch word is delay a decision, even if it means suspending the employee and cutting off their access to systems access, while further review is considered.

2. Do an evaluation of all key factors. There are a number of key factors that might effect a decision to terminate. Ask managers and yourself if you are the practice owner:

• Is termination the appropriate punishment, in light of your policy and past practice?
• Would a jury consider termination fair and commensurate with the offense?
• Has this employee filed complaints, charges, or lawsuits? For example, a court may find your action as retaliatory.
• Could this action be viewed as discriminatory?
• Is there any contract, written or implied, that must be honored? Review your initial offer letter and see if there is any, "and we expect to have you with us for many years," language or reference.

3. Establish agreement. Is there clear agreement among practice ownership and management, and HR as to why this termination is warranted? Has this reason remained consistent over time?

4. Examine documents. Is there clear and articulate documentation to support and justify the termination decision? Are there witnesses?

5. Treat the person with dignity. Oftentimes, terminations result in lawsuits when the terminated employee is or perceives they were treated poorly. For example, conducting an angry firing in public, or refusing to listen to the person's side of the story, may be sufficiently embarrassing to the terminated employee that they seek outside counsel.

Eight Tips to Help You Provide References for Former Employees

You are familiar with the drill: the phone rings and the caller asks you or your office manager for a reference for your former employee. So what do you do?

In our highly litigious society, providing references to unknown callers can be a risky proposition. On the other hand, prospective employers who cannot get information have a difficult time making informed employment selection decisions. Likewise, when you are the caller and find a reluctant person on the other end of the telephone line, you may find yourself in an awkward position, especially when you need to have verifiable information about a prospective employee.

Courts have recognized that, despite the risks, there is a benefit to providing references for former employees and for sharing information. To assist you in providing references, we've provided a useful list to serve as a continuous reminder of how you and your practice can effectively provide references when called upon.

1. Designate a central person or persons in your practice to handle all reference requests. Everyone in your practice should understand that all requests for references should be directed to the designated individual or individuals. Do not permit anyone other than the person or persons designated by you to make casual comments to prospective employers about former employees.

2. Ask former employees to sign a waiver or authorization if they want their information released to prospective employers. Having such a waiver or authorization permits you to release pre-agreed and specified information by the former employee.

3. Be consistent in providing references. In your employee handbook, include a policy about reference requests.

4. Determine what information your practice is willing to provide and set clear written guidelines for employees who provide the information. Do not give information outside these guidelines. For example, if you have not received a waiver or authorization, you may choose to only provide information about dates of employment, a description of job duties, and job title. You also should decide if your practice desires to answer the question “Is the individual eligible for re-employment with your practice.” If the inquiry leads into areas outside of our written guidelines, tell the inquirer that your policy prohibits releasing that information without a signed waiver or authorization from the former employee.

5. Disclose only job-related information, and ensure that all job-related information provided is truthful. Limit remarks to verifiable information. Review the employee's file before providing any information.

6. Refrain from making personal assessments and providing personal data. Do not volunteer information that is not requested, is not consistent with your policy, or is not permitted by a written waiver or authorization.

7. Verify the legitimacy of reference requests made by telephone. Ask for a name, company and phone number, and call back the inquirer.

8. Document each request for reference, including who requested the information and what information was provided. This documentation may come in handy later on in the event a former employee decides to take some form of legal action.

 
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Age Discrimination in Employment Act Turns 40 

Workers who were born in the first few weeks after the enactment of the Age Discrimination in Employment Act of 1967 (ADEA) are just now sufficiently elderly to be protected from job bias based on their maturity.

The ADEA became law on Dec. 15, 1967. For the last 40 years, it has forbidden employers from disfavoring workers over 40 years of age, or preferring younger workers over older ones.

Significantly, the ADEA changed the previously-common practice of forced retirement by prohibiting almost all mandatory retirement policies. Still, there are exceptions; for example, §631 of the ADEA permits mandatory retirement for some 65-year-old executives who are given pension benefits, as well as 70-year-old tenured professors.

The ADEA permits employers to force workers to retire in a few professions where it's a "bona fide occupational qualification," including airline pilots. In this situation, the ADEA does not prohibit the Federal Aviation Administration (FAA) from enforcing its flight regulation requiring commercial pilots to retire by a certain age. (In December 2007, Congress enacted the Fair Treatment for Experienced Pilots Act, increasing the mandatory retirement age for commercial pilots from 60 to 65, to conform to international standards.)

Although the ADEA's name suggests it forbids consideration of any employee's age, the law does not prohibit all age-based discrimination. First, and surprising to many, only individuals over the age of 40 are protected by the law. For example, an employer may discriminate against a 25-year-old job applicant for being "too young" (or for being "too old") without violating the ADEA.

Moreover, even when two workers are over 40 years of age, the ADEA forbids only discriminating against the older worker in favor of the less-senior one, but not vice versa. As the U.S. Supreme Court explained in 2004, the ADEA permits employers to give "unfair advantages...to older employees at the expense of their juniors" (see No Reverse Age Discrimination and Age vs. Older Discrimination).

You can get more details about the ADEA at the Equal Employment Opportunity Commission's Age Discrimination Web site (including the fact that the agency received 16,548 complaints of age discrimination in 2006).

2008 Dollar Limits for Retirement Plans

The Internal Revenue Service has announced cost-of-living adjustments to the dollar limits for tax-qualified retirement plans and individual retirement accounts, for the calendar year 2008. The Internal Revenue Code provides for dollar limitations on benefits and contributions under tax-qualified retirement plans, and for dollar limitations on contributions to individual retirement accounts. These limitations are adjusted annually to reflect cost-of-living increases. Many of the limitations have changed for 2008, since the increase in the cost-of-living index met or exceeded the statutory thresholds that trigger their adjustment. However, other limitations remain unchanged. Some of the more significant new limits for retirement plans, and for individual retirement accounts, are as follows:

*For participants who separated from service before Jan. 1, 2008, the limitation for defined benefit plans under Internal Revenue Code Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2007, by 1.0236.

Buck Consultants

Gallup Management Journal

Age Discrimination in Employment Act of 1967 (ADEA)

Equal Employment Opportunity Commission's Age Discrimination Web site

The Internal Revenue Service

Employee Benefits Security Administration (EBSA)

Employment Eligibility Verification Form I-9

Spectrum Business Resources