“The $15,000 Handbook-Don’t Do This!”

With special guest – Paul Edwards

UNEDITED TRANSCRIPT

David Madow: Welcome to the Madow Brothers audio series. I‘m your host today, Dr. David Madow, and thanks so much to every one of you for being here. It is gonna be a fantastic program today. I’ve got a very special guest I’m going to be introducing in just a couple seconds. Before I do that, I just want to touch on a couple things really, really quickly. One of the things I want to talk about was something we’ve got going; you probably heard of this maybe a million times, Rich and I have got this new patient mail going. I just want to bring it up here before we start the program today. It is just going crazy, our offices, they’re using new patient mail to get patients; their practices are just doing so well with it because really, basically, we are marketing to new residents in your area to get new patients. It just makes so much sense because every single new resident moving into your area is gonna be looking for a dentist, so if you’re not on board yet for new patient mail, just give us a call. Call us up at 888-88MADOW; that’s 888-88MADOW. You probably have that number already if you’ve been a long-time audio series subscriber or member. So give us a call. We can answer any questions. We can help you out. We can tell you roughly how many people are moving into your area every month, but, new patient mail and utilizing the new residents in your area is the way to go to have a steady flow of new patients, into your area, into your practice, I should say. So thanks so much for being with us today; I appreciate it. We’ve got a really special guest who I’m going to be introducing in a second. I will tell you that this program today is not going to be clinical; it’s not gonna be about marketing; it’s not gonna be about how to get new patients into your practice, so let me hear the whining now. “Aw, come on, I want clinical. I wanna know the latest clinical procedures.” Well, let me tell you something, this program today, I feel is so important because if you don’t know this stuff, the potential is there to have some very, very serious problems in your practice; problems that may, well, I don’t wanna say bring your practice down. We’ll let our guest talk about that, but problems that could potentially be so serious, you need to know this. But, no, you’re not going to be learning a clinical procedure; you’re not going to be learning how to get new patients, but having said that, let me introduce our guest. Our guest is Paul Edwards, and Paul Edwards is CEO of a company called CEDR Solutions. It’s capital CEDR, CEDR Solutions. I hope I pronounced that right but… Paul, welcome, and how are you doing today?Paul Edwards: I’m doing great. Very excited to be on the show with you today.

David Madow: Paul, it’s great to have you, and is it pronounced “cedar”? Is it CEDR, all caps, I know it’s an acronym, but is that how you pronounce it? CEDR Solutions?

Paul Edwards: That’s right, Yep, yep, absolutely correct.

David Madow: Excellent, excellent. Well, Paul, we’re not going to be teaching our listeners today the latest and greatest clinical procedure. We’re not going to be teaching them how to get new patients. We’re not going to be teaching them how to communicate with their patients we’re going to be teaching them something that’s possibly more important than those; they are all important, but I think it’s pretty safe to say, Paul, if our listeners are not doing something that they need to be doing, and you can confirm this; I’m just saying this off the cuff, but I think their practice has the potential of crashing down. This is really important. So what I’m referring to is something we call HR or human resources. Now, if you’re ready to say, “Hey, I’m not interested in this. I’m gonna stop this,” or “I don’t wanna hear this program. We got other things that are more important,” I urge you to listen what Paul has to say because it’s gonna, you’re not gonna believe some of this stuff. So, Paul, am I pretty accurate so far on that?

Paul Edwards: Yeah, yeah, you are. I mean, with everything that they’re, that you guys do, all the clinical stuff, of all the work that you put in, it really boils down to your people. And you can get everything right, but if you don’t have your team firing on all eight cylinders, it can be for naught. It can really come down around you.

David Madow: So let’s back up for one second, and we call it, I think back in the old days we called it “hiring and firing” and “personnel” and things like that, but now, you know, there’s this fairly new term, human resources, HR, you know, you heard of companies having HR departments. So what exactly is HR or human resources?

Paul Edwards: Well, as the name implies, it is about the people that work for you. It’s probably one of the most complicated areas, especially for the small to medium businesses, it’s probably the most complicated areas for you to gain knowledge in because it’s such a broad specialty for us out here for us in human resources. It goes from everything from hiring to solving problems, to keeping yourself and your team running well. We talked about that. But on the other side of it, we have classification for wages, we have wage complaints, we have the EEOC, and in any given state there’s probably about a hundred and fifty laws that affect you. And how they affect you is in human resources. You are creating policies, whether you’re writing them or

you’re just creating some de facto policy by the way you do something or handle something. What a lot of folks don’t realize is there’s at least hundred and fifty laws in your state that probably should, you know, you should be aware of and be following and the federal rules as well. So human resources is a really big conversation. It starts from the moment you put the ad out, runs through the course of the life of the employee, and it ends with the relationship, however it ends, whether they quit and go someplace else or they get fired or whatever.

David Madow: So, no problem. Let’s see, so we’ve got, so it’s 50 states, we’ve got about 150 laws in each state, so, 50 x 150, this program should last, the program is probably gonna be eight hours. We’re probably gonna talk to you for, no, I’m kidding, 50 times, that’s a lot a laws. But I think we can boil them down to some pretty simple things today. But, Paul, why, back in the old days, you know, it seemed like we just didn’t have to worry about this stuff, and so what’s, why do dentists need to worry about HR so much now? What’s the difference between the workplace as it is now and, let’s say, I’m just gonna make up a year, let’s say, back in 1985 or so. Why are things so different?

Paul Edwards: Well, I mean, we’ve all seen society change, and if you look at the numbers, and of course, I could throw up on the screen, show you some great statistics, but if you look at just the last, beginning about 2000. The climate really changed out there, and we can measure part of the change in simply looking at the complaints that are filed with the EEOC, and that’s the federal arm of the government that receives complaints about things like pregnancy discrimination, race, religion, you know, all the list of things that are on that list; there’s 10 or 12 things on that list. And prior to 2000, they would get a few thousand complaints, but starting in the year that I mentioned, we started to go up, up, up, until we hit about 100,000 complaints on average per year. Out here in the HR community and amongst the attorneys that work for me here, you know, everybody was, like, wondering why is this happening, what’s going on here? And what it really boils down to are two things; attorneys and taxes, and so attorneys need to make an income and what they found was that it was far easier to get a demand letter out to a small to medium employer who has the means to pay the demand; it was far easier to make the money that way than it was to go after the big boys like Walmart. You can imagine if you want to sue Walmart, you better come with a lotta game and be prepared to spend quite a bit of time and money in order to just get Walmart to respond to you. It’s not the same for our dentists out there, medical practices we work with, and

we see these demand letters come up all the time about some of the craziest stuff you can’t imagine, just trying to get into a settlement with them. On the other side of that is the internet. People are more well informed, are more, and just like, I would imagine you guys teach everybody and have someone come on and talk about AdWords and how they can use online advertising. Well, attorneys are doing the same thing, and so it’s not unusual for an employee to type something in, like “working interviews,” you know, or “Is a working interview legal?” Something like that, and get back an answer to that question, which may be good or bad answers, but also ads from attorneys targeting them, telling them to call and see if something’s happened.

Then on the tax side, and this goes to what we call misclassification. Generally misclassification is, is that you think because, well, you think that you can pay somebody a fixed rate of pay and not track their time, so you can pay them a salary and you don’t have to pay them overtime. That’s one wage and hour violation, and they have been misclassified as what we call an exempt employee or an exempt from overtime, or you misclassify them as an independent contractor. In all of these cases, what you’re doing is not paying the taxes; you’re not paying the matching taxes, you’re not paying the Social Security, you’re not paying those amounts, and it amounts to billions of dollars. So much so that they have created an initiative amongst, now I believe there’s 17 states participating in it, where the federal government has created kind of a gamification of a chart compliance; and what they are saying is the states that do the best in ferretting out these misclassifications, going after employers and collecting the back taxes, will actually get more of their tax money back from the federal government overall each year. And so that has brought up quite a bit of compliance enforcement and investigation where we never saw this stuff before. We just didn’t see, even in the mid-2000s, we weren’t seeing this, but now, there’s all sorts of tools and ways for them to get in and ferret out this. So the difference between 1985 and today is, is there’s a business with lawsuits, and for our members and our clients, unfortunately, they’re seen as someone who has the pockets to be able to pay a demand letter between $25,000 and $50,000. Demand letters are, I mean, I don’t want to dwell on this too much, they are a very effective tool. It’s a mass problem, and when you look at it with your local attorney, you gotta say, “You know what? Pay this off and it will be cheaper than fighting and winning.” Fighting the average lawsuit in the employment arena for small businesses is gonna cost you about $70,000 to $75,000 just

to, just to defend it. That doesn’t have anything to do with what the outcome may or may not be.

David Madow: That’s pretty scary stuff. So let me ask you now, a lot of our listeners are, you know, typical dental office, let’s say a dentist or a couple dentists, and, you know, a handful of team members, that’s kind of the typical. Of course, we have very large practices listening, let’s say the typical dental office, two dentists, eighteen members. Ok, I’m just kinda making that up; that’s pretty typical. Now probably some of my listeners are thinking, “My team is really good; we’re really close; we have a great relationship, so this stuff is not going to apply to me,” but what are some of the, but first of all, let me back up for one second, because when you said that demand letter, it’s pretty scary. How, are the lawyers somehow getting the word out to employees and say, “Look, if anybody does any of these things to you, come see me. We can sue ’em. We can all make a lot a money.” How is the word getting out to these dental employees about this?

Paul Edwards: Well, this has been about three years ago. I have reason to be in the Fort Lauderdale area periodically a couple times a year. And driving along, I believe it was Highway 95, there was a billboard, and it was up for about a year, and the billboard was whocanIsue.com. If you go to that URL, you’ll still find it there. And it had four categories, subcategories. It was, you know, my landlord; you know, it had all these things, and it said my employer. So, you know, you guys are graduating about 7,000 dentists a year. They’re still graduating about at a rate about 40,000 attorneys per year, so you’re outnumbered and they’re getting the same emails that you get about “Are you using AdWords? Are you advertising here?” So the word is out. And there’s something called, and I’ll share this with you guys, it’s something outrageous, it’s something called the Bridge to Justice. It’s inside of the Department of Labor and it is a direct connection between people who file complaints, and it would be typically a complaint against the practice with two to fifteen, two to twenty employees. They don’t see a lot of money there, so the Department of Labor doesn’t want to go after the business per se. They’ll investigate, but they’ll not, they will issue a right to sue letter; but they don’t want to be the ones to go after it. They will connect the complainant to, through the Bridge to Justice to private attorneys who, there’s a whole group of ’em that are waiting for these referrals from the Department of Labor. So let me just, let me just shorten that, an employee that files a complaint with the Department of Labor now will be encouraged through the

Department of Labor to a private attorney to create a relationship where they can bring a lawsuit.

David Madow: It’s funny. As you’re saying this, in my mind, I’m just picturing this image of these hungry lawyers that are, like, in line, almost like at a deli counter, taking a number, and who’s got the next, who’s got the next case. This is unbelievable. Paul, so getting back to the demand letter again, what are some of the most common reasons a dentist would get a demand letter? What does a dentist have to do to be honored to receive one of these things?

Paul Edwards: To receive one of these, well, first of all, he has to be a dentist and be perceived as having money, and in the letters, they range, everything from sexual harassment, which is pretty easy to make that accusation; it’s hard to defend. That’s common. One of the leading complaints is pregnancy discrimination. I can’t tell you how many times I get an email from a doctor and I think everybody listening is gonna probably be able to relate to this story, where the note to us says, “Look, Becky has been on maternity leave now for eight weeks and it’s been really nice around here, and after speaking to my staff, they let me know a lot of things were going on with Becky that I didn’t realize, that she wasn’t, she had problems, she wasn’t doing her job, you know, all these complaints, and so we’d like to know how can we not bring her back from maternity leave; what do we need to do?” Of course, this is something that’s not legal, and if you were to do that on your own, you would be a gift to an attorney, to her attorney. You would definitely end up having to settle on an issue like that. So we got pregnancy discrimination; we used to get age discrimination. One of the worst suits I saw in the beginning, back in 2008, was around an age discrimination suit. But just for everybody’s benefit, you still need to be very careful; it’s still a protected class, but there has been some legislation and some court cases over the last three or four years that have really given us all relief in that area. So if you just handle that well, you’ll probably stay out from in front of that train. We see a lot of wage-an-hour complaints. We see, in California, we see wrongful termination and hostile work environment; those are all things they bring into play. In all of these instances, one of the big trends is try to tack on that retaliation occurred in tandem with what is going on. So the employee complained and told you about a problem in the practice, maybe a safety issue, or complained about overtime or not being paid properly for seminar time or travel or something like that. And in some close proximity to telling you that, within a day, a month, six weeks or so, you terminated that employee, and so the

connection is made at first that they were protected by their activity, which they are, in that example, and then, once brought to your attention, instead of dealing with it, you retaliated against them and you terminated them for doing that. Even though you may have had some other reasons, that is another very common thing, and what makes this important in the retaliation part is understanding that if you did owe that employee some wage due to the Department of Labor in most states, all you have to do is correct your mistake and you might get a slap on the hand and you might even pay some small penalty for what you’ve done. You may or may not. But if you’ve retaliated, in that instance, now we can get into, or they can get it into the EEOC or some court and they can seek damages, and those damages can be unlimited. So you may owe the employee $1,200 but lose a retaliation case and have to pay an additional tens of thousands if not hundreds of thousands of dollars. So they are very common. We have, I mean, I’ll just, you know, we’ve got more than, we’ve been doing this a while now so we have more than 800 offices working with, and those offices have anywhere from one employee, you know, one or two all the way up to, like you were talking about, we have more than 200 people working with us. And I have not, in this last year there are two things that I’ve seen beyond anything I’ve ever saw before, and that is the number of demand letters that are coming in from attorneys where clearly, if we had good documentation, we’ve been filing good policies, our client’s in a good position, our member’s in a really good position. And the other one is, I’m not gonna take this on this tangent, is embezzlement. We’re seeing, I’m getting almost once a week a call from one of our members saying, “You know, we fired someone. We found some accounting problems. What do we do now?” So that’s where we are.

David Madow: Yeah, the embezzlement is a big one. We’re not going to get into that today. We could probably do a whole ’nother interview on that. But let’s get back because I have a question. I’ve also, you’ve mentioned hostile work environment. I’ve heard quite a bit lately. Some offices we’ve spoken to and met in seminars have mentioned this type of thing to us, so it seems like that’s a pretty common term, getting a demand letter for hostile work environment. Explain exactly what that is. Is that kinda like a catchall term, if an employee just feels like they’re being, for lack of a better term, abused in some way, they can just claim hostile work environment?

Paul Edwards: Yeah, we used to, you know, I’ll be talking and I’ll be, I’ll be giving a presentation and we’ll be talking about corrective,

progressive, corrective coaching and how follow policies to use it properly and what can get you in trouble and all that. Inevitably a doctor will stand up and he’ll just say, “Well, I’ll just make ’em miserable. I’ll just make ’em miserable and, you know, we got a computer down in the basement. There’s got two inches of water down there and I just transfer ’em to the basement.” And of course it’s being a little facetious but we all know what that is and it never fails. I mean, in every single seminar that I give, we’re on that subject, whether there’s ten doctors in the study group or there’s 500 doctors sitting out in an auditorium with me, someone says, raises their hand and says, “I just make them miserable.” Well, that is a hostile work environment, and it is a broad term, and it comes, I mean, it’s really difficult, again, like sexual harassment, it’s such a broad term that it’s very difficult to defend it if you don’t have good HR policies and standards in place. Because the answer always, always the good answer to an accusation is: That’s a fantastic story that you’ve come up with, and it’s a great accusation. Unfortunately, your client failed to inform you the reason why we fired them was this. We supported that reason by speaking to them several times about this. We brought up the issue, we brought up what the impact was on the practice and on their job, and we asked them to self-correct and they acknowledged these conversations with us. And so in the end, we terminated them for these reasons. We told them that. I don’t think they shared that with you. And so that is your answer to an accusation.

David Madow: Yeah, it seems like they never share that important stuff with you. But, so we’re gonna, we’re gonna get into this in a big way, as far as like what offices, what every single office listening right now needs to be doing to make sure they can mitigate, like what you just said, they’ve got things documented and they’re doing everything right. We’re going to get into that shortly. But I’ve just got a few more things, typical things. Like I said, Rich and I, we come in contact with so many dentists, whether it’s live in doing in-office consultation or whether it’s somebody coming up to us in a seminar and trying to talk to us at lunch or during a break and picking our brain. We talk to so many, and most dentists out there are great people. They’re really nice and jovial and they joke around a lot so... A few situations I can see happening in a dental office. I just want to run by you and tell me if you think these could be potential problems. Because no dentist is, I don’t think many dentists are going into the office, and I think, I know you used this as kind of a joke, throwing somebody in the basement with two inches of water to use a computer down there, but they may be doing things that, I don’t know, could be considered hostile

environment. What about the dentist that’s kind of a maybe frustrated standup comic, so this dentist, whether it’s a he or she, it doesn’t matter...HR, If I’m doing the right thing, HR, Paul, I gotta be saying “he or she”; I can’t say dentist, or he or she, it could be both. So let’s say we got a dentist who’s a “standup comic,” and every morning they come into the office and tell some jokes to their team, and during the day they’re joking around, some of the jokes happen to be, let’s say a little bit off color. I mean, you know, little dirtier, half-way dirty. I mean, can a team member get them for that?

Paul Edwards: Well, yeah, yeah, and I don’t want anyone from this conversation to get that they shouldn’t be who they are, as long as who they are is that standup comedian and that’s what your team has come to expect from you. But you do have to be aware your words taken in any kind of context outside of that moment are your words. And you really hit on something here because this act happens every morning in front of all the employees and everything is fine until everything is not fine. We have an instance, you know, I mentioned that worst case I had seen, we had a satellite office that had been purchased, I’m not going to go deep into the details, but let’s just say they have an associate in that office with four or five employees in it, part of a larger group. This doctor has been buying up offices down in the South. The associate, who has no power whatsoever, gets in an argument with the long-time administrator of that office; she has some authority but she’s not up in management, but she’s kind of the de facto running the office. They never put anybody in charge of it. She had been there for 20 years when they bought the practice. He said, you know, I’ll be glad when you retire. You’re just, you’re old and you’re stuck in your ways.

David Madow: Oh.

Paul Edwards: And he said that, now that’s not the standup comedian, but that’s the comment. He said that in front of three other employees. There was no problem with the three employees. She really was a bad apple; she needed to retire. She hated it, she hated how it was going, she just didn’t want to … It wasn’t her time, you know, she needed to keep earning, and we understand that. But in the end, those three people testified to what he said. That’s it. Did you hear him say this? What did he say? You know, they don’t get to speak to context, they don’t get to do any of that, and of course this ended up in front of an EEOC investigator who was quite aggressive, and they ended up settling with this employee. So it was $250,000, I think was

the settlement, and they had to pay her legal fees, which, you know, go figure about 62 grand, and their own legal fees, all because of this outburst. So contextually, I’d like for my doctors to be very careful because this is the next big thing that we hear. I listed some of the other stuff is, you know, I can’t believe it but we let this girl go and now she’s accusing me of sexual harassment, and you know, what we were doing here was everybody was, this actually happened, we have a dirty joke of the week and everybody’s job to get a clean dirty joke to tell every week to tell it, we were just kinda using it to lighten things up. And, you know, the next thing, you know, it’s being used against you. So, be who you are, you know, be good, have fun, do all those things. Just be a little careful ’cause in context now to context later, everything you say will be under a microscope.

David Madow: Paul, I was reading on Facebook a short time ago, it was from a dental office and it was a team member who was posting something, I can’t remember word for word, but I’ll give you the gist of it: something like, her doctor told her that she’s got to either it was dress better or get her hair cut or put on more makeup or something like that or he’s going to fire her. So, in other words, he was not happy with her appearance; she needed to make some type of a change in her dress, in her makeup, something like that, or she was going to get fired. Is that looking for trouble?

Paul Edwards: I think in some ways it can be, but let me just say the lose weight part, it could be an ADA issue, not the American Dental Association but the Disability Act that has been broadened quite a bit. The cut of her hair or dress better are things which are standards of appearance which you can absolutely address through policy. And, you know, the protection here for this doctor is that he has created a standard which is compliant, complies with state federal law, and he is enforcing that standard across his entire staff. So, you know, the other thing that comes to mind is she’s on Facebook making comments about work and she’s close to discussing her working conditions, so if another employee chimes in on this conversation, this could be protected activity underneath a National Labor Relations Act. So I would really tread on thin … he’s on thin ice with this as far as firing her and taking some disciplinary action, but would I bring her in and talk to her about his? I would. Think about it, your handbook, what you do, how things go, think about being in front of a jury all the time, we always call our handbook exhibit A to the jury and how would that land on the jury if we did have to end up in front of one. It’s probably not that great so it’s a touchy subject ’cause we, again, it’s something we

hear all the time. We got a hygienist who has always been a little overweight and she’s gotten really big and now she’s become a problem around, you know getting around the chair and doing stuff, you know, doing her job, we just have to be careful how we address it.

David Madow: I think once she or he cannot fit in the room any longer, I think that could a problem for the practice, but we won’t go there. Also, Paul, one of the things we do very commonly hear, ’cause Rich and I do seminars, we produce seminars, we’ve got TBSE, which stands for The Best Seminar Ever, and so we got a lot of people coming to see us every year, all year long, especially at TBSE, a real big one. And we always hear conversations about, well, if doctors are gonna bring their team members whether they need to pay their team members for the whole time they are away, whether, you know. Let’s face it, it’s off time, it’s off hours, that hygienist is not cleaning people’s teeth and that assistant is not assisting chairside so, we always hear questions about that, and Rich and I never know exactly how to answer those questions. Well, should I be paying my team for this? So we’re gonna hear from the horse’s mouth: What are the rules there as far as docs paying team members to take CE off hours if not business hours or even when it’s during business hours? Let’s say they take a day off, so it’s technically somewhere between 9 and 5. What are the basic rules there?

Paul Edwards: Ok, so this is a really good question, and this is something everybody can take away and, if you just listen and take a few, jot a few notes down, you can tell if you have this in your handbook and tell if you have this correct or not. So there’s four rules and all of the following that I talk about must be true: Work must be outside normal work hours – notice I said work hours; I didn’t say days, so if an employee normally work 9-5, say Monday through Thursday, any day of the week between 9 and 5 would be their normal work hours. So a lot of times you’ll hear “Well, it’s on Friday, Saturday, Sunday; we’re closed on those days.” Well, that doesn’t matter; it’s the hours. So the next thing is attendance must be voluntary – and you can’t get cute around this, you know, it’s voluntary but the last employee that didn’t go no longer works here, that sort of thing; it’s an unspoken rule. The third thing that must be true is that the employee performs no productive work, and that’s reasonable – your hygienists aren’t gonna be cleaning teeth and the front office aren’t gonna be answering the phones or filing any insurance during those seminars. The last one, and this is the big one, is training cannot be directly related to the job and it doesn’t not benefit the practice; that’s the

fourth one. Many of you right now probably tossed your pen down saying, why would I take someone if it didn’t help them do their job better? And my answer to that is precisely, that’s exactly correct. The Department of Labor has you figured out, has us all figured out, and therefore, all of the time that someone spends at a seminar, regardless of whether you pay for their hotel or regardless whether you pay for their travel, even if you give them a couple bucks to spend every day, all those things do not change the fact that you have to track their time and that they have to be paid for that time. And if that time goes over 40 hours in the work week, so let’s say they worked four tens and they’ve got 40 hours and they’re with you; that time that they spent butt in the chair in the seminar is all compensable according to the FLSA, which is the Federal Labor Standards Act, which applies to everybody who is listening today. The other part, component to this is travel, the travel associated with it. Now we go back to those hours normally worked except for the State of California. If an employee is travelling during their normal work hours. Again, it could be Monday through Sunday, they normally work 9-5, any day of the week, that’s their normal work hours. If they are travelling, that time is what we call compensable, so they have to be paid for it. But let’s say you put them on a plane at 6:00, if you put them on a plane at 6 p.m. when they are normally off at 5 p.m., then none of that travel time is compensable according to the federal government. And California, just for those people listening, it’s portal to portal time from the time they leave their house to the time they get to the hotel and check in is time that is compensated.

David Madow: Gotta love California.

Paul Edwards: Oh, California is awesome. It’s good for us. They just passed the Wage Theft Act about two years ago, which is just a wonderful way to refer to the employers as thieves of wages, just, it’s really frustrating to see that kind of legislation coming out. Yeah, you know you got the travel time and you have the work time and it’s all overtime. And by the way, the Department of Labor knows that dental offices, we’ve seen this in the CE, I’ve got four attorneys who work here full-time as advisors to our members, we’re not a law firm, they work as advisors, and I have master’s levels HR people as well. And we go out and, you know, do CEs and I’ll sit in the back of the room sometimes and we actually did a CE two years ago where they described the whole thing that I just describe as a bunch of attorneys, but both sides, we call ’em dark and, the evil attorneys and the light attorneys. All in the room and a guy says, “So, in California, who can

guess who is the worst at this?” and nobody could guess, and he said, “I’ll just go ahead and tell you. It’s dentists.” Any time we get a Department of Labor complaint about dentists, no matter what it is, this is one of the areas that we focus on because we know that there are habits that are contrary to how the rules run. One other thing for everyone, if you heard that you can pay a differential rate of pay for travel and for seminars pay, you’re absolutely correct. That is correct what you have heard so long as you communicate it to the employee in advance prior to the decrease in wage, which is an excellent place, another excellent thing to do by policy, which is explain to people this is what we do. So long as it’s minimum wage or higher, you can decrease their pay for these sorts of things. And the last thing, last question that’s always there: “What about CEs?” So long as you do not control, say CEs are hygienists who has to go to, you know, the state requires the hygienist to recertify every year, take continuing education. In those cases, as long as you do not control the methods or the means, in other words, as long as you don’t say, I want you to take this course on this day in this place,” as long as you don’t do that, then you are not required to pay for the CEs.

David Madow: Mm, ok, I see.

Paul Edwards: And if you’d like to, you can pay for the course, if you’d like to, but you don’t have to pay them for your time. So those are the rules around that.

David Madow: Ok. Here’s one I could hear a doc saying right now. “I’m not really worried about this because Madge is on salary, so I pay her one salary. It doesn’t matter how little or how much she works. She works, she’s on salary. I wouldn’t have to worry about any of this.” How would you respond to that one?

Paul Edwards: I love that imitation by the way, that is a doctor’s…

David Madow: That’s what they sound like. “Madge is on salary.”

Paul Edwards: Yeah. “Madge is on salary. She’s been with me for 20 years. I’m not worried about this.” Well, when you and Madge are not getting along anymore and Madge leaves the practice, you will find out that Madge will go after whatever she thinks she can get paid. The problem here is most, no two-year hygienist can be classified as exempt from overtime. So if Madge has a two-year degree, you have to be tracking her time and paying her for all time over 40 hours. You could pay her a fixed salary, that’s ok, but you can’t just pay her that if

she works overtime. So if you wanna pay Madge $650 a week, whether she works 30 hours or 36 hours or 38 hours, whatever your agreement is with her, except for in California, by the way, everyone, this rule applies other places. You pay her that fixed salary for those hours, but if she works any time overtime, you then have to take that salary, you have to do some math with it to determine what her base rate of pay is and pay her time and a half according to that math. It’s not that hard to do. It’s something we can help people with. For the four-year hygienist, the federal government has been very vague in that area and so our guidance to everyone is, do not classify a hygienist as exempt from overtime. You should be tracking their time worked and paying them overtime in those instances. There are opportunities where you can classify them as an exempt employee, but you just want to be careful about not doing it because you’ve heard it’s ok, and because other people are doing it. There are circumstances and it’s a, there are two tests the IRS, the Department of Labor test for all of the exemption classifications of professional employees and administrative employees; there’s two tests, one by the IRS, one Department of Labor, go figure if they don’t exactly match up. So you want to make sure that you’re looking at these circumstances before you just classify someone. Then, really want to make this point. All across this country we find a two-year and a four-year degreed hygienist working next to each other, that two-year degreed hygienist who cannot be classified ever as exempt and just paid a fixed salary is causing the other hygienist to have to be classified the same way. How do you make that distinction? They’re both doing the same job, so you can’t make a distinction between the two of them. Did I answer that? Was that too much information?

David Madow: That was, no, it’s never too much. It was perfect. It made me think of something. I’m still going back and thinking about, a little bit about that demand letter showing up at my door. And so I’m wondering if there’s any type of insurance that dentists can get or should have that once that demand letter shows up, they did something that somebody is accusing them of, their insurance company will just take care of the whole thing and they don’t have to worry. Is there such a thing?

Paul Edwards: No, there is EPLI insurance, Employment Liability Insurance, and I encourage everyone to look at that, and I believe in insurance to the degree that insurance can protect you. But we’re all in this business together and we know that insurance company’s job is to not pay; that’s what they want to do. Now with EPLI, the unique

problem that we have is that they exclude multiple things that they won’t cover. And many of those things that they exclude are wage and hour violations, and we talked ad nauseam about that, and many of the things that I brought up today, they exclude from their coverage. Now, retaliation, sexual harassment, those sorts of claims, which can be very expensive to defend and even more expensive to lose and settle or to settle, those are covered by that kind of liability insurance. So, you know, it’s a cost/benefit analysis. I just want everyone out there to understand that the main reasons or the main ways you get in trouble, this insurance is likely not going to cover you in that, and they’ll be super clear about it. They list it right there, very, very clear. Now that I told you about it, you’ll see it if you look through your policy.

David Madow: So I’m hoping that all the dentists listening to this program today are convinced that if they are not doing anything yet, they really need to start doing something. But what is that something, let’s say somebody has been complacent, and I think a lot of dentists, we’re complacent. You know, everything is going well, Madge has been with me for 20 years, and you know, yeah, I tell some jokes, but everything is fine and she’s not gonna cause any trouble. But I think after hearing this they realize, yeah, I really have to do something. So where do they start? What’s the first step? It sounds overwhelming. What do they do?

Paul Edwards: It is overwhelming, and given the type of resources and support that they might or may not have out there, it becomes even more overwhelming. And what most doctors do and dentists are almost always first entrepreneurs, so they want to do something, if they could do it themselves, they try it themselves, and what I’m talking about are employee handbooks. Every employee handbook needs to be customized for your office so that it fits your culture, and then it also has to, as I spoke about before, has to comply with the laws. You know, you don’t realize it, but it is incredibly, it violates three federal laws to tell employees that they cannot gossip and that gossip will not be tolerated. It also violates those same laws to tell employees that they cannot discuss their wages, so you can’t talk about how much you make; if you do its grounds for termination. And over the last two years this has been a huge gift to attorneys we talked about, they all know it, again, you’re violating three federal Laws, a National Labors Relations Act, you’re violating a Lilly Ledbetter Act, which was passed in 2009, and you’re also, I mean, the EEOC has issued a letter saying, look, you’ve got this policy, if someone makes that complaint

against you, we’re just going to go ahead and assume you’re guilty; we’re gonna give them the right to sue that or we’re going to find it in our investigation that they found something. So I give you that example because throughout your handbook you have, your doctors have, you had issues and you tried to address those issues, whether it be time off, whether it be how people, stop texting, don’t carry your phones with you, you know, are you using PTO or are you using vacation, how do I get my stuff back if I fire someone or they quit, how do I get my keys back, how do I get my uniforms, my laptop, my dog, can I get my dog back, you know all those things. So there are many, many places in your handbook that help you stay compliant and can create consistency; is really what I want to see there. So you need to look at this document and everything that comes with it, job descriptions, which are very valuable even when it comes to finding people; running job ads having a job description really will help you find a better candidate, all the way through having to discipline people. Discipline, I find this before, discipline, we got an issue and we need to talk about this and we got to get a self-correction; discipline is not like it used to be where you put some kind of, you’re trying to punish a person into what it is that you need them to do in order to do their job. So if you look at all the resources, you could look at the ADA has got a book you can purchase; California Dental Association has a book that California dentists can purchase. You see all sorts of managers, practice gurus, and people out there offering what they call a template, but the problem is that in giving it to you, you’re not an expert in employment law; we call it the $15,000 handbook because you get it for under $100 and then you spend, oh, who knows how much time you and your practice manager spend on the thing, hours upon hours. I know the average dentist can easily generate two grand an hour. Next thing you know, you got $20,000 of your own time in this thing and it in no way complies with the state and federal rules. So for the doctors who are out there, one of the ways that you can figure out where you are with your handbook is that you can send it to us and we’ll be happy to take a look at it and have a contextual conversation with you about your handbook.

David Madow: Well, how would they do that if somebody wants to just take you up on that and send you their handbook as is? How would they get it to you?

Paul Edwards: Well, the best way to do this is by, electronically, so email it to us and tell me, tell us the number of employees that you have, the state that you’re in, and obviously, would you please put a

phone number where we can reach back to you. And if you’ll send it to me, you can send it to info@cedrsolutions.com, if you’ll send us the book and you put in the title, Madow, just put the, you know, or you just put the name of this course or just put a note in that you heard us on this show, what we’ll do is we’ll waive the $299 fee that we normally charge. We will look through your book, we really will, we’ll spend about 45 minutes going through the book, we’ll look at your state rules, the number of employees you have, ’cause it matters, and we’ll let you know what’s going on, how good is it, does it have problems, where are the problems. We’ll set an appointment with you. We’ll spend an hour with you and answer your questions and let you know where it can be improved. There’s not pressure on you to purchase anything from us. This is really a contextual conversation, and you know it’s education, and by the end of it, you’ll know exactly what you need to do. Like I said, you can bring your questions if you got something or an issue going on, you can also contact us through that same methodology.

David Madow: Paul, that’s a really nice offer. Just in case my listeners didn’t really understand, Paul is giving you, as a member, as a subscriber to the Madow Brothers audio series, he’s gonna totally look at your handbook for free, no obligation whatsoever, and he’ll get back to you with feedback, and all you have to do is email your manual, your handbook, to info@cedrsolutions.com and make sure CEDR Solutions is spelled out, cedrsolutions, and as Paul said, in the subject just put Madow Brothers audio series so he’ll know exactly it’s coming from us. He’ll know not to charge you. He’ll totally turn the clock off; you’ll not be charged for the hour or time he spent. So great deal on that, Paul, we appreciate this for all our subscribers. Now, let’s say, somebody is listening to this and they just simply never got around to having a handbook at all or they feel theirs is so bad they’re embarrassed to send it to you. Let’s say they don’t have one, and they don’t want to go the template route, the fifteen or twenty-thousand dollar handbook. What should they do at that point?

Paul Edwards: Ok, so if they just want to get in touch with us, they can send an email to that same email address or give us a call, you know, go to our website, research us a little bit more. You can call us; our phone number is 866-414-6056. Give us a call and talk to us, let us know where you are, if you really want us to look at your handbook, we will, but if you just know this is something you want to do. When you call, you’ll also get a discount, so we will discount to you by about $500 because you’ve been on this show, and just get in touch. And you

can go out and cost compare, look at our services and what we provide. A big part of what we do is provide support because, you know, we can put together a handbook and it would be great and it will be perfectly in compliance and we put it in your office and some federal or state law could change the other day. And the old models, what would happen is you wouldn’t be aware of it and you wouldn’t know what to do with it, and off you go and you got a flaw in your handbook. When you work with us, we actually help you keep that book up-to-date; we do all the work for our members. We do not send a template and say, go through this book, work it out, pull, copy, paste, do these things, and then give it back to us, and then we will tell you whether or not it’s good. That is not our model. We go through a very methodic process that is very thorough, and we do the work for you. So if you’re getting in touch with us, know that that’s what you’re coming into.

David Madow: So remember, the website is cedrsolutions.com, and remember, CEDR is C-E-D-R, cedrsolutions.com, and I think, Paul, we chatted a while ago and I think you set up a special page for the Madow Brothers audio series subscribers - cedrsolutions.com/madow. If somebody goes to that page, what are they gonna see on that page?

Paul Edwards: Well, probably, I’m hoping what we’ll also be able to do is create a link back to you guys so that they can send us out to their friends, but we will definitely put resources on the page. We have as you can imagine lots of cheat sheets and guidance that we can provide, so I talked about classification of employees, so we’ll put a really good article up with worksheets so that you can go through and look at this and decide whether you have people classified properly. I’ll put some, you know, I’ll put a few other things up there for everybody, you know, how to hire better, how to have a conversation with a bad apple, maybe we’ll put the toolkit. The toolkit will be there; that’s an excellent resource for everyone, so you can download the toolkit for free. We also offer a once-per-month (it’s free) training that goes out, and it’s an email that comes in; we call it a two-minute trainer, and if you just stop and take two minutes, you will gain all kinds of knowledge about, what is at-will employment, what is a protected class, what are these things, and very, very useful. We have very high open rates and we have people stay in the series, we have people in this for, heck, four, five years now. They keep making us have to add more guidance so they don’t go away.

David Madow: This, I’m just talking now to my listeners, this thing is real. You won’t believe how many times Rich and I speak to dentists all over the country and they’ve got these issues that are popping up; they just seem to be more and more lately so, yeah. I know this stuff is not clinical and it’s not marketing, as I said in the onset of the program, you get one of these demand letters, it has the potential to take you down. Let’s say, dentists are small business people and to have to pay $75,000, $100,000, $200,000, $250,000 or some of the numbers you threw around there, Paul, that’s really, really scary stuff. That’s losing-house-type stuff for some people; this is not good. So we got to be prepared, so if you’ve been listening to this and you’re saying, yeah, I’ve got to get up to date; I’ve got a manual but my manual was done by a template five years ago, then you need to take Paul up on that offer. Have him at least look at it. Maybe it’s a quick fix, I don’t know, but we can’t be taking chances these days. And also, Paul said give him a call; he’ll answer a question. 866, I hope I got this right, Paul, 866-414-6056; is that right?

Paul Edwards: That’s correct, yeah.

David Madow: Paul, I tell you, there’s so much going on with HR with all these issues and we, I tell you, I had a great time; we could chat for hours and hours, and having said that, I’m gonna ask you if you’d like to come back on the show one day soon, because I think there’s just so many more things we could be helping our members with, and that’s pretty much what we do with the Madow Brothers audio series. We’ve got listeners that have been with us for many, many years, and each time Rich and I put a show out, our goal was to help our members in some way, one way or another, and this, I think we just touched a lot of important points. So I want to thank you so much to spend the last fifty minutes to an hour with me and helping our dentists. Greatly appreciate it.

Paul Edwards: I appreciate the opportunity. I mean, we’re in service to this group of professionals, and we just really appreciate the opportunity to, you know, kind of give, and one of the ways we can do that is if they get in touch with us.

David Madow: Well, you know, we’ve know each other for some time now, and I know you are the real deal; you’ve been doing this for a while; your reputation is great. It’s just evident from what you’ve been talking about for the past fifty minutes or so on this show. You know your stuff, Paul. So again, I appreciate it and we’ll say goodbye,

but this will not be the last time we have you on the show. We’re gonna have you back and we can talk about more, so, but anyway, until then, Paul, thank you so much for being on the show.

Paul Edwards: Thank you.

For more information on this interview, be sure to visit madow.com. While you’re there, check out the Madow Brothers seminar schedule as well as the many ways that Rich and Dave can lp you in your practice. Be sure to become a fan of the Madow Group on Facebook and follow Madow Group on Twitter. Remember, you’re not alone anymore.