Practice Management Alert

Write your offer letter to include these crucial components.

Even if your practice avoids the high turnover rates that plague much of the healthcare industry, writing an offer letter and putting together a new hire paperwork package are key skills. Make sure your practice doesn’t risk liability by crossing your t’s, dotting your i’s, and knowing that all of your bases are covered.

Plus, there’s a chance you’re making a now-illegal mistake if you aren’t conducting the new hire process by following certain steps in order.

Feature These Components

There are several crucial things to include in an offer letter. To formulate an offer letter correctly, make sure it has the following components, says Barbara Freet, founder and president/CEO of Human Resource Advisors in Walnut Creek, California. These components include:

• Title of the position;
• The position’s supervisor;
• The rate of pay (either hourly or monthly; not just the annual salary);
• The classification of the role as either exempt or nonexempt (For more information, see “Become More Familiar with Wage and Hour Laws” in Practice Management Alert, Volume 19, Number 8.);
• The starting date of the position;
• A statement pointing the prospective employee to the employee handbook for more information on benefits (For more information, see “Create an Employee Handbook Now” in Practice Management Alert, Volume 19, Number 7.); and
• Make sure to note any special contingencies in the offer letter, as well.

Pay special attention to the benefits section. Freet says that it isn’t wrong to outline the employee’s benefits in detail, but that doing so could be problematic later on, if you, as an employer, wish to adjust a benefit. If benefits are outlined in detail on the offer letter, the employee can say that she accepted the offer contingent on those benefits, Freet explains. It’s easier to keep your employee handbook updated and just point employees and prospective employees to that for reference, instead.

Look to State, Federal Laws for Additional Paperwork

There is other information with which you need to provide your prospective employee, but the specific information depends on your particular state. Some examples include rules, regulations, or policies surrounding temporary disability insurance or state disability insurance, workers’ compensation, and paid family leave, Freet says.

To fully onboard a prospective employee, make sure to complete all of the other paperwork surrounding a new hire.

The U.S. Department of Labor has a handy checklist for employers that specifies the forms required at the federal level. These forms include:

• Employment Eligibility Verification, I-9 (See “Understand Your Responsibilities For I-9 Paperwork” in Practice Management Alert Volume 19, Number 11 for in-depth information),
• Federal Withholding Form, W-4, and
• State Withholding Form (available from the Internal Revenue Service [IRS] website).

Don’t forget other information that you need, at a company level. Your new hire paperwork can include a form for direct deposit and a form designed to collect pertinent information about the prospective employee, such as emergency contacts.

Have Signed Letter in Hand Before Taking This Precaution

If you’re tempted to look into a prospective employee’s motor vehicle history with a Motor Vehicle Report (MVR) before letting them drive on behalf of your practice’s official business or you’d like to run a background check, you can’t do so without a conditional offer of employment letter, Freet says. If you’d like to run either of those checks, write your offer of employment letter conditional on the prospective employee passing the respective checks. 

Important: If a prospective employee’s background check reveals issues that don’t directly affect the performance of duties in the intended role, you may not be able to make a hiring decision based on that information, Freet says. The House of Representatives has passed the bipartisan-supported Fair Chance Act, which, if the Senate passes it as well, would curtail what information an employer (right now, limited to federal agencies and federal contractors) can request of a prospective employee until certain points in the hiring process.

Audit the Job Application, Too

If you ask for a job applicant’s conviction or arrest history, research your local and state laws to make sure that doing so is legal.

“Nationwide, 35 states and over 150 cities and counties have adopted what is widely known as ‘ban the box’ so that employers consider a job candidate’s qualifications first — without the stigma of a conviction or arrest record,” says Beth Avery, J.D., senior staff attorney with the National Employment Law Project (NELP) in New York, in the NELP Fair Chance Toolkit.

These “fair chance” policies and legislation are intended to promote employers hiring the best-qualified candidates, while also doing well by their communities. The aforementioned Fair Chance Act would also affect whether the arrested/convicted question can appear on job applications.