Blog

Mar 21

Common Practices Fraught with Risk

“Working interviews,” volunteering and/or unpaid internships are not uncommon in the industry, but they have become a source of increasing risk to dentists, both financially and emotionally. Getting caught doing these without considering compliance requirements can leave you vulnerable to a plethora of problems.

Working interviews, in particular, present complex issues that have serious ramifications for dentists who, knowingly or unknowingly, fail to be aware of or properly comply with the requirements. Here are two actual examples:

  • A dentist was interested in hiring an applicant as a dental assistant and had her come in for a “working interview.” She filed successfully for workers’ compensation as an employee, alleging that during the day she fell off a chair and hurt her back.
  • An applicant came in for a “working interview” and was not hired. She filed for unemployment. The doctor was ruled to be her last employer and liable for the unemployment claim.

While it is quite common in the industry to have applicants demonstrate their job-related skills by asking them to participate in a “working interview,” you can see from the two cases that this extension of the verbal interview can become a costly problem for the employer if not handled correctly. 

Recently, the Department of Labor has made statements that they are going to crack down on employers who aren’t, or don’t, follow wage & hour regulations correctly, which results in an employee losing out on compensation rightfully due to him/her. They are on the “hunt,” so to speak, for violators.

When and how can applicants engage in “working interviews,” internship programs, or otherwise “volunteer” their services for an employer? And, if any of these can happen, what’s the best way to use them and still protect yourself? The following will shed some light on this and provide some best practice guidelines.

Definition of Employee
To start, we have to look at the government’s definition of an “employee.” Simply put, employment is defined very broadly and considers an individual an employee if s/he “suffers or is permitted to work” by an employer. 

“Working Interviews”
In some practices, the “working interview” is paid time for one or a few days. In terms of wage & hour rules this is not a problem, provided the person is receiving compensation for his/her time, the rate in effect during that time is at least minimum wage and the individual is paid for applicable overtime hours.

In many other practices, the “working interview” is conducted for one or a few days and is not paid. Clearly, based on the very broad definition stated above, this is simply not allowable. If you ask an applicant to perform work at your practice, whether “officially hired” or not, and no matter how short the time period, it is work time and must be paid.

Since the individuals in the examples above are considered your employees, for good or bad, then your workers’ compensation insurance comes into play if the person is hurt on the job, and you will likely be considered the person’s most recent employer if the person does not remain employed and seeks unemployment compensation. Unfortunately, there is no avoiding this problem when conducting “working interviews.”

You may ask, “Is there a way to test an applicant’s skill before hiring that keeps him/her from becoming an employee and risking all of the above?” Yes, it’s called a “skills assessment.” In order to conduct a skills assessment legally, the following guidelines must be applied:

  1. Never have applicants replace regular workers, or fill-in for workers who are off. This could appear as though the person is an employee, or temporary employee, because s/he is being treated as one by replacing another.
  2. Do not have the applicant perform a skills assessment for more than 1-2 hours.
  3. Refrain from providing any form of compensation, even something as little as a gift certificate, for participating in the skills assessment. Recent interpretations state that an employment relationship does not exist if there was no contemplation of payment to begin with.
  4. Be sure no productive work is performed, or “no productivity is derived,” by the applicant’s participation, such as would occur when an applicant provides services to clients, which are billed for, like a hygienist cleaning a patient’s teeth. In the case of a dental assistant or a hygienist, working on patients, potential colleagues, or anyone else who may benefit from the work or fulfill an employer’s obligations, is considered performing productive work and should not be done. Instead, assess the applicant’s skills on a ceramic model, yourself or an employee who does not receive dental treatment as part of a dental benefits program. For other employees, billing insurance companies, receiving payment from patients, scheduling patients, calling cancellations, etc. is also considered productive work and should be avoided.
  5. Prior to conducting the skills assessment, each applicant should sign an agreement, such as our “Skills Assessment Interview Agreement” [call us for a sample copy of our form #108]. This agreement outlines that a) the skills assessment is an extension of the interview process and is voluntary, b) there is no promise of employment, c) no employment relationship exists, and d) no compensation will be provided. Get the applicant’s signature on this form.

One final note, while following these recommendations will protect you from employment-related claims, if a person is hurt on your premises, then you may still have to deal with a personal liability claim through your general liability insurance.

Volunteering & Unpaid Internships
Whether it is staff “volunteering” to provide dental services to a charity group or having unpaid interns work for the summer, employers often erroneously believe they have greater flexibility in determining whether the employee will get paid than they really do. 

Under the FLSA, employees may not volunteer services to “for-profit” private sector employers. An individual can be considered a volunteer under the FLSA if the individual:

  1. Performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of compensation for services rendered; although a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services;
  2. Offers services freely and without pressure or coercion; and
  3. Is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer.

Employees may end up volunteering for their employer when they are encouraged to get involved with a charitable organization. The big trap for employers is crossing the line from encouraging staff to coercing or pressuring staff to volunteer. The following factors could mean compensation is due:

  • Employer requests volunteers to participate;
  • The employee is under the employer’s control while volunteering;
  • The employee is required to be on the premises;
  • The volunteer work occurs during normal work hours;
  • Non-participation adversely affects employees’ working conditions or employment status; and
  • There is a significant connection between the employer and the charity and they are considered a single enterprise.

As for volunteering for an employee’s own employer, this will not pass the test with the FLSA when the work is performed during normal work hours, the work is similar to the employee’s regular job (regardless of when the volunteer hours occur), and the employees’ participation is not truly voluntary.

Regarding internships, in order to have an intern who is not compensated, the FLSA states that all of the following criteria must be met:

  1. The training, though it may include actual operation of the employer’s facilities, is similar to training that would be given in a vocational school;
  2. The training is for the benefit of the student;
  3. The student does not displace regular employees, but works under close observation;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his/her operations may even be impeded;
  5. The student is not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the student understand that the student is not entitled to wages for the time spent training.

NOTE: The California Division of Labor Standard Enforcement (DLSE) adds 4 additional points for criteria. Just know that if it doesn’t pass the federal test, it definitely won’t pass California’s.

Conclusion
Not paying individuals when they meet the government definition of “working” is very risky. Without carefully considering all of the various components related to working interviews, skills assessments, volunteering, or unpaid internships, the employer could wind up with messy claims that are sure to be more costly than it otherwise needed to be. The safest course of action is to pay people for their time spent providing a service to the employer–whether “officially hired” by you or not.