04/24/2018

Include annual license verification in personnel records management


An individual was arrested in California in March for false representation as a dental hygienist and for making false claims for health benefits. According to additional information CDA obtained, the individual worked without a license in several dental offices in Northern California before her arrest. CDA offers the following article as a reminder to dentists to include license verification as a best practice for hiring and ongoing personnel management.

Dental practice owners need to give HR compliance with records management the attention it deserves. Michelle Corbo, HR practice analyst for CDA Practice Support, says practice owners who don’t are tempting fate until they get into a situation where serious problems present themselves.

Failure to maintain accurate personnel files can expose employers to liability. Employees have become more sophisticated about workplace rights, can quickly research and access information and can easily file complaints with various entities.

Compliance and documentation should be a top priority for practice owners. Documenting policies and procedures and taking measures to develop a system to maintain compliant personnel files is an important first step.

Managing Employee Records

Employers collect many records to document the employment relationship. Many contain private and sensitive information, from the employees’ application phase through the course of active employment. In California, strict privacy laws protect employees’ information from being disclosed to third parties. In the event of an audit or lawsuit, employment files are the first items that attorneys, auditors or the Department of Labor will request.

As a best practice, employers should maintain two separate files for each employee. While most employment documents will go in a general employee file, other documents containing sensitive information belong in a confidential employee file. But all employment files should be housed in a locked and secured area.

Only the practice owner and possibly a designated staff member should be able to access these files. And due to different records retention requirements, the employment files should be organized by status, such as active versus inactive, i.e., former employees of the practice.

The employee’s general personnel file could include:

  • Recruiting- or hiring-related documents such as job descriptions, applications, certifications, resumes, job offers and educational transcripts and licenses
  • New employee orientation documents such as signed policy acknowledgements and agreements
  • Records related to status changes such as promotion, demotion, transfer, termination and rates of pay
  • Compensation information
  • Records related to performance, including performance appraisals, letters of recognition and disciplinary actions related to warnings or counseling

In turn, the employee’s confidential employment file could include:

  • Any documents containing sensitive information such as Social Security number, date of birth and medical information
  • Reference and criminal background checks
  • Interview notes or employment tests
  • Medical and insurance records related to medical questionnaires, benefit enrollment forms, doctors’ notes and leave-of-absence records
  • Child support and wage garnishments
  • Litigation documents
  • Workers’ compensation claims
  • Investigation reports
  • Employment and payroll verification requests
  • Employment Development Department-related documents

If the practice utilizes an electronic system, practices should follow the same measures for maintaining regular versus confidential personnel files and should ensure that files are encrypted and a back-up method is in place in case access to e-files is lost.

When employees leave the practice, personnel files still require maintenance as required by law. Depending on the type of document, retention guidelines are different. CDA Practice Support offers a detailed list of retention guidelines in the resource Records and Document Retention Guidelines.

Form I-9 file management, annual license verification system

Due to the level of private information contained within the Form I-9, it is recommended that the practice keep all I-9 forms separate from other employee forms in active and inactive status binders.

Should employers experience an audit, the I-9 is one of the first forms auditors can ask to review. Practices should set up a system to review and purge inactive status I-9’s on a consistent basis to avoid holding onto documents containing sensitive and confidential information. All active and inactive employee I-9 forms contained in the binders are subject to inspection and potential penalties for inaccuracies or violations. Employers can shred inactive status I-9 forms three years from the employee’s hire date or one year after the termination, whichever is greater.

Upon hire, employers should obtain a copy of professional licensure, permits and or certificates for each employee required to maintain these credentials as part of their duties. A copy of the license should be displayed in a conspicuous location in the office, and annual review reminders should be scheduled to check that the license is still valid and active. CDA Practice support is aware of several reported cases where practice owners casually decided to check licensure of staff only to find that the licenses had lapsed or been revoked. (For specific examples, read the RM Matters article in the September 2016 CDA Journal.)

When it comes to personnel files and compliance with California law, proper documentation and adherence to records retention regulations is key. An employer can be held liable for negligence if personnel files are not secured and information is inaccurate, is not properly maintained or is improperly disclosed to third parties.

Without documentation, disputes can boil down to the practice owner’s word and, unfortunately, statistics show that employers often lose in the end. Not knowing about a particular regulation is never a defense. Stay informed: Employment law changes quickly and one of the greatest challenges practice owners will experience is simply keeping up.

For CDA Practice Support employment law resources, including those cited in this article, visit cda.org/practicesupport or cda.org/resources.



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