Employment Law 101

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Dr. Ali Oromchian discusses basic laws every orthodontist needs to know

One of the most dreaded aspects of business for any entrepreneur, especially the dental entrepreneur, is employee management. Employees are vital to any successful business, and particularly in an orthodontic office where personal relationships and communication ensure loyal and happy patients. 

However, in our litigious society, orthodontists need to take extra care to guarantee that they are compliant with all applicable federal, state, and local employment laws. 

This article will discuss the most common traps including overtime pay, lunch, and other breaks, last paychecks for terminated employees, HIPPA, and employment handbooks.

Overtime pay

The United States Department of Labor oversees compliance with laws for overtime pay for employees at the national level.  Overtime pay is regulated by the Fair Labor Standards Act (FLSA), which prescribes standards for minimum wage and overtime pay for both private and public employment.  The FLSA requires employers to pay employees at least the federal minimum wage plus overtime pay of one and a half times the regular rate of pay for their work.  Unless specifically exempted, employers must pay overtime pay to employees for hours worked in excess of 40 hours in a workweek.  There is no limit in the FLSA to the amount of overtime hours an employee can work.  Importantly, the overtime requirement may not be waived by agreement between the employer and employee, and any announcement by an employer that no overtime work will be permitted or that overtime work will not be paid for unless authorized in advance does not impair an employee’s right to compensation for the overtime worked.

Some states, such as California, have overtime laws. In cases where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher overtime pay).  

Some typical pitfalls that occur include (a) paying a fixed sum for a varying amount of overtime; (b) creating a fixed salary for an employee for a regular work week that the federal or state overtime laws; and (c) trying to convince the employee to waive overtime. 

Lunch and break laws

Federal law does not require meal or other breaks from work.  Meal breaks are not compensable, but other breaks, typically short breaks lasting 5 to 20 minutes, are compensable under federal law.  If an employer decides to offer a short break of some sort, then it is included in the sum of hours worked during the workweek, and it is considered when determining overtime pay.

Many states have their own lunch/break requirements, which must be adhered to strictly; however if the state does not have specific laws pertaining to lunch/breaks then the federal law applies.  One frequent violation in orthodontic offices occurs when the employees are interrupted and required to work at any point in their lunch break.  This can be as simple as answering phone calls or checking insurance coverage.  

Last paycheck

Under federal law, employers are not required to give former employees their final paycheck immediately upon termination of employment.  However, some states require immediate payment.  One such state is California, where discharged employees or employees who quit are due their final paycheck upon termination of employment.  There are significant penalties, which accrue as soon the final paycheck is not paid.  Additionally, it is illegal in many states to withhold a final paycheck to persuade an employee to return uniforms, laptops, pay back money, or return any other item.


The Health Insurance Portability and Accountability Act of 1996 (HIPAA) legislates certain privacy protections that apply to health care providers, including orthodontists.  The law is designed to help patients keep as much of their personal information private as possible.  The law protects from unauthorized disclosure of any personally identifiable health information (protected health information, or PHI) that pertains to a consumer of health care services.  Health information is personally identifiable if it relates to an individual specifically and includes the following: 

Health care claims or health care encounter information, such as documentation of doctor’s visits and notes made by physicians and other provider staff;

Health care payment and remittance advice;

Referral certifications and authorization.

Covered entities, including orthodontists, must adopt written PHI privacy procedures; designate a privacy officer, require their business associates to sign agreements respecting the confidentiality of PHI; train all of their employees in privacy rule requirements; give patients written notice of the covered entities’ privacy practices and access to their medical records; give patients a chance to request modifications to the records; give patients a chance to request restrictions on the use or disclosure of their information; give patients a chance to request an accounting of any use to which the PHI has been put, and give patients a chance to request alternative methods of communicating information. They must also establish a process for patients to use in filing complaints and for dealing with complaints.  Under HIPAA, patient authorization is not necessary if a disclosure is made for purposes of treatment, securing payment, or in accordance with the operations of a health care provider. However, if PHI is to be disclosed for any other purpose, the patient’s written authorization is necessary.  

Employee handbooks

Employee handbooks are a useful tool for communication between an employer and employee about many aspects of the employer-employee relationship.  An employee handbook should describe the legal obligations of an employer and the employee’s rights.  An employee handbook should include a section with anti-discrimination policies and sections explaining compensation to the employee, the employer’s policies regarding work hours and schedules, standards of conduct, safety and security, employee benefits, and leaves policies.

The absence of an employee handbook, or a poorly drafted one, puts you at a disadvantage when defending a claim brought against you by a current or former employee.  At the very least, your employment manual should define who is covered by the handbook, review existing policies and practices, draft consistent, understandable and legally permissible employment policies, review the handbook with management prior to implementation to obtain feedback, and submit the draft handbook to experienced labor law counsel for review.


Employee management and legal compliance is usually the weakest link within any orthodontic practice because the owner-dentist had to manually manage records, and ensure proper time keeping and performance reviews.  HR for Health is a SAAS-based employee management system that ensures legal compliance with federal and state documents, performance improvements through metrics, increases employee satisfaction, and provides insights into your employees that allow you to turn their weaknesses into strenghts. 

The risks are high and the responsiblities important, but with powerful strategic tools such as HR for Health, all orthodontic offices can be compliant with complicated employment laws. 

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