How do you classify nontraditional workers in your clinic?
By Christine V. Walters, JD, MAS, SHRM-SCP, SPHR
August 2015
The spring and summer months seem to revive the eternal questions about classifying certain nontraditional, contingent workers. Employers seek to provide learning opportunities for students in their home communities. Some do so with the hope that the student might return to seek regular employment postgraduation. Others do so simply based on their belief in corporate citizenship as a way to pay it back and forward to the local communities that support them. But take care. The best of intentions can go awry.
This year is no exception. On April 20, 2015, the U.S. General Accounting Office (GAO) sent to the U.S. Senate Health, Education, Labor and Pension (HELP) Committee a “Contingent Workforce” report.1 That report has also been shared with the Secretary of the Department of Commerce, the Secretary of the Department of Labor, and other “appropriate” Congressional committees.
The GAO reports with a +/-1.7 percent confidence rating that the core group of contingent workers, such as agency temps and on-call workers, comprised about 7.9 percent of the employed labor force in 2010. They found that compared to standard full-time workers, core contingent workers are more likely to be younger, Hispanic, have no high school degree, and have low family income. These contingent workers are also more likely than standard workers to experience job instability, and to be less satisfied with their benefits and employment arrangements than standard full-time workers. Because contingent work can be unstable, or may afford fewer worker protections depending on a worker’s particular employment arrangement, it tends to lead to lower earnings, fewer benefits, and a greater reliance on public assistance than standard work.
Knowing that myriad entities within the executive and legislative branches of our federal government are giving these relationships due consideration, employers need to be savvy when classifying workers whom they do not intend to be employees. These may include: temporary workers, direct hire, hire from an agency, independent contractors, volunteers, and unpaid interns. So, let’s take a quick look at some of the more common nontraditional worker relationships.
Independent Contractors
Today at least 22 states have signed a Memorandum of Understanding (MOU) with the United States (U.S.) Department of Labor (DOL) and Internal Revenue Service (IRS) agreeing to share payroll, tax, and other records for the purpose of identifying employers who have misclassified workers as independent contractors instead of employees.2 Modified from the former 20-factor test, today the IRS tends to use a three-factor test for assessing proper classification of a worker as an independent contractor. This is described in Publication 1779.3 The DOL uses a different test. It describes its factors in Fact Sheet 13.4 In 2007, I had the honor of testifying during a joint U.S. Congressional subcommittee on this very topic. In addition to the federal guidance, which varies as described above, many states have statutory definitions that may vary such as in the state’s unemployment insurance or workers’ compensation codes as well as in state administrative agencies, which use factors that are different from the IRS’s factors. With so many different rules, tests, and factors it can be extremely difficult for employers to get this right.
Unpaid Interns
Just because an employer partners with a local academic institution to find and use unpaid interns does not insulate the employer or guarantee that the use of such unpaid interns is legal or proper. The DOL applies a six-factor test that must be checked to properly classify an intern as unpaid.5 Unlike many multifactor tests this is an all-or-none assessment. If the employer cannot “pass” each factor of the test then the worker must be classified as an employee and paid. To date at least four states (Illinois, Maryland, New York, and Oregon) plus the District of Columbia and several local jurisdictions have enacted laws providing fair employment practice protections for unpaid interns, protecting them from unlawful harassment.
Volunteers
Similar to but different from unpaid interns, the DOL applies a three-factor test to employers’ use of volunteers. Private sector employers should note that the status of volunteers in the public sector is more readily recognized than in the private sector. The three-factor test is described in guidance published by the DOL.6
Shared Workers
In today’s labor market some employers seek to save costs by sharing workers. If you are sharing workers with another corporate entity, be cognizant of whether a joint-employment relationship might be created. There are advantages and disadvantages to this; be sure whatever you create is the relationship you want. Whether it is a temporary agency or some other entity who will be the employer of the worker will be in question. Ensure your contract addresses the intended relationship and any liability that might arise from that designation. For example, imagine a physical therapist works as a full-time employee of a physical therapy clinic. She also works part-time with an agency that just happens to place the physical therapist in a temporary assignment at the same clinic, but at different facility or location. Who is the employer while the physical therapist is working at the clinic on the temporary assignment, the temp agency or the clinic? What difference does it make? Who is responsible for overtime pay when the physical therapist works 40 hours for the clinic and an additional 15 hours through the agency at the clinic in the same workweek? What about workplace accidents and Occupational Safety and Health Administration (OSHA)? Or providing reasonable accommodation under the Americans with Disabilities Act (ADA)?
Unauthorized Workers
And for those workers you do intend to employ as employees, be sure they are legally authorized to work in the United States. The U.S. DOL, Equal Employment Opportunity Commission (EEOC), and more have ruled on more than one occasion that U.S. employment laws that provide for a minimum wage, overtime, and nondiscrimination protections apply to workers in the U.S. (as compared to U.S. workers) regardless of citizenship or work authorization. While federal law prohibits employers from employing individuals who are not legally authorized to work in the U.S., employers who nonetheless employ undocumented workers are prohibited from discriminating against them.7
Endnotes
1. http://gao.gov/assets/670/669766.pdf Accessed June 2015.
2. www.dol.gov/whd/workers/misclassification/ Accessed June 2015.
3. www.irs.gov/pub/irs-pdf/p1779.pdf Accessed 2015.
4. www.dol.gov/whd/regs/compliance/whdfs13.htm Accessed June 2015.
5. Fact Sheet 71, www.dol.gov/whd/regs/compliance/whdfs71.htm Accessed June 2015.
6. www.dol.gov/elaws/esa/flsa/docs/volunteers.asp Accessed June 2015.
7. www.eeoc.gov/policy/docs/qanda-undoc.html Accessed June 2015.
This article does not constitute the rendering of legal advice. You should consult with your practice’s legal counsel for advice on employment-related matters.
Christine V. Walters, JD, MAS, SHRM-SCP, SPHR, is an independent human resources, and employment law consultant for DBA FiveL Company out of Westminster, Maryland. She can be reached at info@FiveL.net.
An overview of the copyright concept.
By Paul J. Welk, PT, JD
June 2015
The legal Impact column regularly considers the legal rights of one party as compared with another in connection with a certain situation or issue. Continuing with that theme, this installment explores “work made for hire” in copyright law and how this concept affects the rights of the individual who produces the work and the rights of other parties that may be involved under the circumstances. For purposes of examining work made for hire, let us consider a physical therapy practice that is seeking to launch a hand therapy program. In connection with the program, the practice asks one of its employees, a physical therapist, to illustrate an educational handout that describes certain anatomical structures in the hand. The physical therapist performs some of the work during her regularly scheduled workday and some on evenings and weekends. The practice also hires a website development firm to design a unique webpage for the hand therapy program. The design services are performed under a “work order” that terminates automatically once the work is completed. A number of months after the successful launch of the hand therapy program, the employee terminates her employment and takes a position at a competitive practice a few miles away. Under this scenario, how is ownership of the handout and the website determined? The answer to this question depends in part on whether each of these works was a work made for hire.
The Federal Copyright Act defines a “work made for hire” to generally include two categories: (i) a work prepared by an employee within the scope of his or her employment; or (ii) a work specially ordered or commissioned for use under certain specific circumstances, if the parties expressly agree in a signed writing that the work shall be considered a work made for hire.1 By way of example, the list of enumerated circumstances under the second prong of the work made for hire definition includes “instructional text,” which is defined to include pictorial or graphic work prepared for publication and intended to be used in systematic instructional activities.2
Determining whether a work is work made for hire is essential because the general principle under copyright law is that only the author or those deriving rights from the author can make a lawful copyright claim. However, if the work is deemed to be a work made for hire, a third party such as an employer may claim ownership rights in the work created by the author.3
With that very basic background on work made for hire, let us now examine the employed physical therapist and the web designer in the above scenario. The U.S. Supreme Court has held that it is important in a work made for hire analysis to first ascertain whether the work was prepared by an employee or an independent contractor.4 In its analysis, the court noted that if an employee created the work, the work generally will be considered a work made for hire by definition. However, when considering work performed by an employee, it is important to note that the work must be created within the employee’s “scope of employment” to constitute work made for hire. In the above scenario, the practice’s claim for ownership of the handout may be hindered because the work was performed after hours at the employee’s home5 and the work was not of the type the employee was hired to perform6 (i.e., a physical therapist performing artistic work). To improve its ownership claims in the employee’s work, the practice should consider whether a written employment agreement describing the treatment of such work is necessary. For example, the agreement could include an acknowledgement that any work that does not qualify as work made for hire is automatically assigned to the employer. Additionally, in the case of an employee the practice may be better served by assuring that the employee performs the work during typical working hours and that, if work is performed in the employee’s home, the work is nonetheless clearly delineated as that which is done for the benefit of the employer.
In the case of work created by an independent contractor, such as the website designer in the above scenario, for the work to be work made for hire it must fall within one of the specific categories listed in the definition (e.g., “instructional text”) and there must be a written agreement between the parties specifying that the work is a work made for hire.7
The scenario above raises concerns over the practice’s claim to ownership of the website for a few reasons. Initially, work on a website, logo, or custom software does not fall within the listed categories that qualify as work made for hire when performed by an independent contractor. Additionally, a typical “work order” such as that provided by the website designer would likely not satisfy the written agreement requirement in the non-employee context. The practice could strengthen its ownership claim to the website by having a written agreement in place with the website designer describing the legal rights in the work performed. For example, the parties could execute an agreement which provides that any copyrightable material developed by the designer within the scope of the engagement is automatically assigned to the practice. Adding this assignment provision, in addition to assessing whether the work is work made for hire, will generally increase the likelihood that the practice rather than the independent contractor is the owner of the work.8
A physical therapy practice spends significant amounts of financial resources to develop numerous works such as logos, websites, and educational materials to improve day-to-day operations and the value of the practice. It is important to take appropriate measures to assure that the practice secures ownership of such works and can benefit from the associated competitive advantages, such as preventing the use of such works by others or licensing such works to others in exchange for a fee.
References
1. 17 U.S.C.S. §101 (2015).
2. Id.
3. See Circular 09: Works Made for Hire, U.S. Copyright Office, available a http://copyright.gov/circs/circ09.pdf. Accessed April 19, 2015.
4. Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).
5. See Avtec Systems, Inc. v. Peiffer, 67 F.3d 293 (1999).
6. Restatement (Second) of Agency §228.
7. See Circular 09: Works Made for Hire, U.S. Copyright Office, available at http://copyright.gov/circs/circ09.pdf. Accessed April 19, 2015.
8. See Copyrights and Works Made for Hire, American Bar Association, available at www.americanbar.org/publications/tyl/topics/intellectual-property/copyrights_and_works_made_hire.html. Accessed April 19, 2015.
Please note that this article is not intended to, and does not, serve as legal advice to the reader but is for general information purposes only.
Paul Welk, PT, JD, is a Private Practice Section member and an attorney with Tucker Arensberg, P.C. He can be reached at pwelk@tuckerlaw.com.
Key provisions of the National Labor Relations Act and its impact on nonunion employers, both small and large.
By Christine V. Walters, JD, MAS, SHRM-SCP, SPHR
April 2015
Like some nonunion employers, you may be either unfamiliar with the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB), or believe that neither impacts your nonunion workplace. That would be not only incorrect but also unwise.
The NLRA provides nearly all nonsupervisory employees, union or nonunion, certain rights to act in concert (e.g., two or more employees having conversations or taking action with regard to wages, hours, or conditions of employment). These rights are commonly known as Section 7 rights. Section 8 of the NLRA also provides that employers, union or nonunion, may not interfere with employees’ exercise of their Section 7 rights. If you are waiting for the Section that describes employers’ rights, stop waiting—there isn’t one.
Considerations for utilizing telehealth in physical therapy private practice.
By Paul J. Welk, PT, JD
February 2015
“Telehealth,” sometimes referred to in the physical therapy setting as “telerehabilitation,” is defined in the physical therapy context as “providing physical therapy via electronic communication where the physical therapist or physical therapist assistant and the patient are not in the same location.”1 Telehealth has become a frequent topic of discussion in physical therapy as providers seek to adapt and broaden the services provided to patients. In recognition of the importance of addressing telehealth issues, at its 2014 House of Delegates, the American Physical Therapy Association (APTA) passed RC 8-14, which provides in part that “it is the position of the APTA that telehealth is an appropriate model of service delivery for the profession of physical therapy when provided in a manner consistent with association positions, standards, guidelines, policies, procedures, Standards of Practice for Physical Therapy, Code of Ethics for the Physical Therapist, Standards of Ethical Conduct for the Physical Therapist Assistant, the Guide to Physical Therapist Practice, and APTA Telehealth Definitions and Guidelines; as well as federal, state, and local regulations.”2
Four key issues exist for private practices should they wish to explore implementing telehealth services.
1. State Law and Regulation. Only a limited number of states have telehealth legislation and regulation that specifically address physical therapy practice.3 These states include, among others, Alaska and Washington. By way of example as to how telehealth is regulated in the physical therapy context, Washington allows the use of telehealth in the practice of physical therapy by both physical therapists and physical therapy assistants. Among other requirements, the Washington regulations mandate that the physical therapist or physical therapy assistant identify in the record that physical therapy occurred via telehealth.4 Alaska allows for the provision of physical therapy via telehealth to patients who are located at distant sites in the state, which are not in close proximity to a physical therapist. The regulations further provide that the physical therapist must be present in the state while performing telehealth and provides that telehealth may be conducted for one-on-one consultations, including initial evaluations.5
The somewhat obvious conclusion drawn from the above information is that the majority of jurisdictions do not have specific laws or regulations governing telerehabilitation. Regardless of whether a jurisdiction has extensive regulation on telerehabilitation or none at all, providing telerehabilitation inconsistent with applicable statutes or regulations puts the licensed physical therapist at risk of regulatory action. For this reason, it is important for any practice that desires to start a telehealth program, to review applicable state laws and regulations, including applicable licensure laws, as well as any guidance available from the jurisdiction’s licensure board. In addition to understanding what qualifies as telehealth under state law and regulation, it is important to understand what may be permissible without falling within the regulatory realm of telehealth. For example, state law and regulation may expressly permit a non-face-to-face discussion between physical therapists regarding the care of one therapist’s patient.
2. HIPAA and Privacy Compliance. To provide telehealth services in compliance with applicable state and federal privacy standards, physical therapy practices will need to consider a number of issues related to technology, privacy and security.6 These considerations may include developing policies for the provision of telehealth services and engaging appropriate professionals to assure that the platform for providing such services complies with HIPAA and other legal requirements. Practices must also assure that there are secure communication channels through which to provide the telehealth services and that, where appropriate, confidentiality and/or business associate agreements are entered into with relevant service providers. Private practitioners need only to read the daily newspaper to see the risks associated with a breach of the privacy of patients’ and customers’ personal information.
3. Professional Liability and Insurance. Prior to providing any telehealth services, practices and their providers should assure that they have adequate professional liability insurance to cover such services. Failure to secure adequate professional liability insurance coverage puts the practice and the provider at risk. Given that telehealth is a somewhat emerging issue across the national landscape, professional liability insurance products may have not yet adapted to cover telerehabilitation services. In addition to professional liability issues, practices may also wish to consider whether securing cyber liability insurance or other similar coverage is appropriate. Cyber liability is the risk posed by conducting business over the internet, over other networks, or using electronic storage technology. By way of example, a private practice may be subject to a cyber liability claim asserted by a patient whose personal information has been breached.7
4. Reimbursement. Governmental payers have differing views on the reimbursement of telehealth services. Medicare does not pay for telehealth provided by physical therapists.8 However, in the Medicaid context, 44 states reimburse for live videos and 10 states reimburse for remote patient monitoring provided by certain health care providers. Specific to telerehabilitation, the Arizona, Minnesota, and New Mexico Medicaid programs reimburse physical therapists for telehealth.9 When seeking reimbursement from private insurance companies for telehealth services, it is important to review the practice’s payer contracts to determine if telehealth services provided by physical therapists are a covered benefit. It is also important to determine the appropriate coding required by private insurers to ensure that there is a mutual agreement on the codes that may be used for services. Failure to confirm that reimbursement is available or to properly submit appropriate billing codes for telerehabilitation may result in costly audits and other related issues.
In summary, telehealth provides both unique opportunities and unique challenges to private practice physical therapists. As physical therapy providers enter into this area of practice, they must be cognizant of the issues that need to be considered to maintain compliance.
REFERENCES
1. WAC 246-915-187 (2014).
2. See APTA 2014 House of Delegates Meeting Minutes available at www.apta.org/HOD. Accessed November 16, 2014.
3. www.apta.org/telehealth/legislationregulation Accessed November 3, 2014.
4. WAC 246-915-187 (Accessed November 3, 2014).
5. 12 Alaska Admin. Code 54.530 (Accessed November 3, 2014).
6. See www.hhs.gov/ocr/privacy/ Accessed November 20, 2014) for extensive resources related to HIPAA compliance.
7. www.filetransferglossary.com/cyber-liability Accessed November 15, 2014.
8. www.apta.org/telehealth/billingcoding. Accessed November 3, 2014.
9. www.fsbpt.org/Portals/0/Content%20Manager/PDFs/Forum/Forum-Spring2014-The_integration_of_Telehealth.pdf Accessed November 16, 2014.
Paul Welk, PT, JD, is a PPS member and an attorney with Tucker Arensberg, P.C., where he frequently advises physical therapy private practices in the areas of corporate and health care law. He can be reached at pwelk@tuckerlaw.com.
Contract considerations for consulting/onsite services.
By Gwen Simons, PT, OCS, FAAOMPT, Esq
November 2014
Physical therapists have historically provided a wide array of services to employers, including post-offer screenings, onsite physical therapy for work-related injuries, injury prevention programs, and ergonomic analyses. When pitching proposals and arranging such services, therapists frequently fail to obtain a written agreement that reflects the terms of service to which both parties have agreed, sometimes resulting in nonpayment, intellectual property infringement, and liability/legal compliance risks. Under the new rules for incentivizing non-discriminatory wellness programs in employer-sponsored health plans, physical therapists will have even greater consulting opportunities, thus increasing the need to get service agreements in writing. Whether a simple letter agreement or a detailed contract is in order, the following items should be included or considered:
