You Asked, We Answered – HR AMA With Paul Edwards (March 2023)

Hello AADOM Tribe! Welcome back to the monthly LIVE Ask Me Anything with Paul Edwards, CEDR CEO & Founder, and Heather Colicchio, founder and president of AADOM. Throughout the upcoming year, you can submit HR issues that are happening right now in your practice to Paul and CEDR’s team of HR professionals for them to answer. Our team will pick from the dozens that are being submitted and choose several to give guidance on within our Monthly HR Article. Then, Paul and Heather will expand on the written answers during every HR Tuesday Livecast. To submit your questions, click here!

For the in-depth, expanded, and detailed answers…
Listen to HR Tuesdays live, mark your calendar for the second Tuesday of each month, or go here to check out the archived recordings.

All your daily human resource issues likely have some state, federal, or local employment laws that you must comply with while, at the same time, trying to find the best human way to solve the core problem. In this series, we will fit the two together and help you all come up with some great resolutions.

Here are three of your best submissions this month:

1. What do you do if your candidates prefer higher pay rather than benefits?
2. How long are you required to hold onto payroll records?
3. How do you handle a situation where a working interview candidate leaves the job before filling out any paperwork?

Let’s get to your questions

Question: Since hiring has been so difficult this past year, we made the decision to offer health insurance benefits for the first time ever. It was a lot of work, and a big financial decision for us, but we were really excited to roll it out as it’s such an important benefit to people. Now, each of the past few candidates I’ve interviewed has asked if they can just get paid a higher rate instead of using insurance. It seems like we can’t win no matter what we do, and it’s really defeating to go through all the work of getting a great benefits plan only to have people specifically not want to use it. What should I do?

• The legal side of things: We’ll be blunt: Don’t give in and offer them a higher rate, unless in the future you’d be ok with continuing to pay that rate even if they changed their mind and started using your health benefits. There are no guarantees that a person is going to never need your health benefit simply because they don’t need it today, and it’s no easy thing to reduce someone’s pay.

  There’s no legal way to split out extra compensation in lieu of benefits as being anything other than part of their regular pay…Click to open link in a new window…. If you pay them more, that’s the rate they’re being paid, that you base overtime pay on, that future increases will be based on, and that’s the rate they’ll expect to continue being paid even if you were to decide to drop your insurance benefit in the future. The additional paying being meant to account for the equivalent they’d get in benefits will be forgotten within a month.

  Now for the human approach: Our guess is that you evaluated the job market and your competition and made an informed decision that offering health insurance would add value to your employee and attract some candidates toward you. Don’t let your recent interview experience turn that business decision on its head. Not every employer is a fit for every worker. There are plenty of candidates out there that want insurance benefits, and we’ve seen it becoming an increasingly valued benefit in the past few years.

  The last thing you want is for an employee to feel they’re being paid less because their circumstances don’t allow them to waive insurance. That can breed resentment. Or, it could result in employees who really would benefit from your insurance plan saying they want to opt out of it so they get more take-home pay. All of this defeats the purpose of having the benefit.

  There will always be people who only see the straightforward dollar figure. But many workers want to see a full compensation and benefits plan that provides more to their well-being than just the paycheck. Being one of those employers can be a win for you in the end.

  If you do get to the point where you feel like the group health plan was the wrong way to go, consider setting up an HRA…Click to open link in a new window…. This would allow you to provide reimbursement for an employee’s personal health insurance plan or expenses, without it being part of their regular wages.

Question: In a dental practice, how long are we required to hold onto payroll records? Sometimes it feels like they stack up forever, and we have records for employees that haven’t been working with us anymore for a while.

• The legal side of things: This one is pretty straightforward, but we’re really glad this question came in as it’s something that slides off the radar from time to time for a lot of employers.

  From the federal side, the Department of Labor requires employers to hold onto payroll records for all employees for three years. You are also required to hold on to “records on which computations are based” such as timecards/timesheets, update requests, schedules, and records of additions and deductions, etc. for two years. But for the sake of simplicity, it’s not a bad idea to just stick to that three-year rule for all payroll-related records to make sure you’re in the clear.

  Here’s a fact sheet from the DOL with that information…Click to open link in a new window….

  It is important to note that some states will have different laws requiring you to hold on to those records for longer – up to seven years in some places. So, if you don’t know what the law says in your state, CEDR Members can reach out to the Solution Center for guidance…Click to open link in a new window….

  Now for the human approach: Long gone are the days of trying to preserve filing cabinet space. Your payroll records are likely all electronic, so maintaining files for several years is no longer the type of issue it used to be. Make sure there’s a designated place where these electronic records are checked, and that that location is documented and remains available even if staffing changes (meaning, you don’t want to unintentionally lose these records when you shut down someone’s email account).

  Find out your state rules about keeping records, and cushion that by an extra year or two to make sure you’re covered in case anything somehow goes sideways. We also recommend finding out from your payroll company how long they keep records, and what the process would be if you needed to request old records. It’s your obligation to ensure you have these records, but knowing how things are backed up for you with a third party is very helpful.

Question: I had someone come in for a working interview. Things seemed to be going well but, when lunchtime rolled around, she took her break and never came back. I know I have to pay her for the time she spent at my practice for the first half of the day. Trouble is, she never filled out any paperwork and she’s not responding to my calls so I’m not even sure where to send her check. What do I do now? Help!

• The legal side of things: If someone works for you, you are obligated to pay them. Them not filling out paperwork doesn’t get you off the hook. Neither does the length of employment. Put those two factors together and we arrive at the big legal requirement: You have to pay someone (as an employee) for their time spent in a “working interview.”

  Asking an applicant to come in and work for the day is asking them to come work for you as an employee. It doesn’t matter that in your view this is part of your decision to give them an ongoing job. In the eyes of the law, this individual is being asked to perform work as your employee. That means that they need to be paid for their time in the same way you would for any regular employee.

  Your state may have any number of new hire requirements, but for the purpose of this question, we’re solely focusing on the fact that this person needs to be paid. To be able to do that correctly, you need them to complete the necessary paperwork.

  Don’t put off the paperwork. To avoid this from happening again, it’s best to have new employees (including working interview candidates) fill out their paperwork first thing when they come in.

  Now for the human approach: Ultimately, the solution to this problem is to do the best you can with the information you have on hand. Use whatever contact information you have – phone, email, emergency contacts, etc. – to reach out to the employee and let them know that you need them to fill out a W-4 and state tax forms so that you can pay them (note that you’ll also want them to fill out an I-9 for your records, though this won’t impact your ability to pay them for their time). Hopefully, the carrot of a paycheck is enough to motivate them to come in and give you the information you need. Or you may at least be able to get them to give you the information required to fill out those forms yourself.

  Make sure you document all of your attempts…Click to open link in a new window… to get in touch with this person throughout this process.

  If they still won’t respond, check the employee’s resume and any other documentation you have on hand for any information it might contain and start filling out their W-4 and any state withholding documents to the best of your ability and have the check issued with a standard deduction.

  Once that’s done, reach out to the employee one last time and let them know that you have a check ready for them at the office if they would like to come to pick it up (you can get them to fill out the necessary documents when they arrive), or that you would be happy to mail it to them if you could get confirmation of a physical mailing address (you may be able to get the info you need from them if you can manage to get them on the phone or responding to emails).

  Keep in mind that you’ll need to complete this entire process and get the employee their paycheck by the next regular payday, and even sooner in some states.

For a more detailed explanation of how to deal with this all-too-common issue, check out our blog on the subject here…Click to open link in a new window….