Associate employment contracts:Scrutinize them prior to signing


He or she might be in the unenviable position of asking an employer to pony up thousands of dollars for disputed, unpaid productivity revenue.

I have always felt that a big part of an associate's developing a good long-term relationship with a professional practice is the avoidance of disappointing surprises. The first year of an associate's employment is stressful enough without the emergence of unanticipated complications that add an additional layer of unease in the workplace.

For that reason, I believe that it is extremely important for practice owners and managers, as well as for associate employees, to scrutinize employment contracts thoroughly prior to signing. That way, if all or almost all of the key details are addressed during the pre-employment negotiations, all parties can spend the contract term focusing on the practice of veterinary medicine and surgery.

Anticipate questions

Ordinarily, it is the practice owner or his or her attorney who drafts the initial proposed employment agreement. It would be quite unusual for a new associate candidate to provide even a draft document for the practice to consider. Therefore, it is incumbent upon the practice to anticipate questions that might be posed by the potential hire when the language is evaluated by the associate or an advisor.

We have dealt in a number of previous articles with the important issues of salary, vacation time, sick days and insurance coverage. Nonetheless, there are a number of other, seemingly minor, issues that can lead to disagreement if they are not dealt with specifically in the employment contract when it is initially executed. Among these are the following:

  • 1. Can sick time or vacation time be bought out?

When an associate is young and has a thriving social life, it is hard to imagine a situation in which all authorized time off would not be used as they are earned. There are weddings, family parties, road trips to visit classmates and a hundred other things to soak up every minute of off-work time.

On the other hand, a time might come when the goals change, and saving for a house or starting a child's college becomes more important than escaping on a vacation. When that circumstance occurs, associates often take a second look at their contracts, (which frequently amount to nothing more than a third, fifth or 10th renewal of the same contract that they signed when they joined their practice).

What is often discovered is that vacation and sick time must be taken as such. If the time off is not used, then the employment agreement may not offer the employed doctor cash payments in lieu of unused off-days.

Naturally, an associate can ask to have this term changed. However, once such a provision becomes policy, it is often hard to get the practice to budge on the issue. The question is best addressed at the time the initial agreement is negotiated. Sometimes a useful approach is to include a term providing for a vacation time buy-out option to become available during the second or third year.

  • 2. Can I roll over my unused vacation time or sick days to future years?

While this might not seem terribly important, issues such as this are often the cause of countless hours of sweaty negotiations between labor unions and private industry. Here is the reason: While for some people, rolling over accrued off-time is not vital, it can become so for others who are raising a young family or want to take a substantial refreshing hiatus from routine practice.

A doctor might decide after a few years that he or she wants to take a once-in-a-lifetime cross-country vacation or an extended trip to visit relatives in the old country. If vacation time cannot be rolled over, taking such a trip might be impossible or at least could result in using up an entire year's vacation time at once.

For other reasons, cumulative sick time can unexpectedly become a very important issue. Many school districts, for example, permit sick time to be carried forward indefinitely so that teachers can receive full pay for unexpectedly long illness or recovery from surgery. While that degree of latitude may not be the norm in private veterinary practice, certainly the issue of whether sick time can be accumulated to some extent can have a profound impact on a doctor and his or her family.

  • 3. What is included in my production numbers?

In many associate contracts, doctor productivity (dollar amount of gross billing) is either one element, or the entire basis of compensation. It is important to know what items of income to the practice are included in that figure.

For example, who gets credited for refill prescriptions? Let's say that a patient needs a repeat course of an antibiotic at a client cost of $100. The terms of the associate's contract should determine whether the associate gets to keep the $22 that one refill would generate under a 22-percent-of-gross compensation formula.

What often happens in cases where a contract is not clear on such a point is that an associate fails to identify the question for several years of employment. He or she then is in the unenviable position of asking an employer to pony up thousands of dollars in disputed and unpaid productivity revenue.

Along similar lines, disagreements can arise about whether a number of other products and services are meant to be included in doctor productivity figures. These can include medicated baths, weight-control food recommended by the associate, flea products (initial and refill) and pre-arranged blood work to follow-up on an associate-diagnosed chronic medical condition.

  • 4. If I get married during the term of my contract, when and how will my spouse be covered by health insurance?

This is really a two-part question. First, it is important to discover how a marriage subsequent to employment would affect health coverage availability. Will the employer cover all or part of the spouse's policy? If that spouse's coverage were generous enough to cover husband and wife, would the practice increase salary to compensate for the unneeded insurance? If so, how much?

Finally, the issue raises an important red flag for the employee, especially female associates. If a post-contract marriage or child came into the picture, (and neither can be anticipated) and if the hospital policy is known to be partial or no coverage for the new party, then how will the employee finance the additional coverage? Is there a budget for such a contingency? The situation comes up much less rarely than one might expect.

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