Hiring Benefit Exceptions: Rolling the Dice on Liability


Given today’s hiring challenges, many dental practice owners may consider making exceptions to their benefits and offering more to new employees than existing employees. For many employers, these higher expectations and demands of today’s candidates mean that failing to deliver can result in the loss of great employees. While this approach isn’t new, there are important considerations to take into account, and not doing so can have nasty ramifications.

Benefits are set differently for different groups of employees: full-time/part-time status, position, exempt/non-exempt status, management role, length of employment, etc. These are considered true job-based classifications. Once established, all members of these groups should receive the same treatment. The provision of benefits in this way is generally not considered discriminatory.

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The problem arises when these parameters are established and the individuals within them are treated differently. For example, let’s say your part-time employees aren’t eligible for paid time off, but a potential part-time employee is offered paid time off as an incentive to take the job. In another example, full-time employees must pay 50% of their health insurance premium, but a potential full-time employee may only pay 20%, again, in an effort to entice them to take the job. .

Problems in

The problems start when employees discover that they are not getting the same benefits. Can employers simply demand confidentiality between employees or threaten to fire them? No, not without creating more responsibility for themselves. The federal National Labor Relations Act protects the right of employees to participate in discussions (both in person and online) about wages, benefits, and working conditions. Employers are strictly prohibited from infringing on these rights.

Chances are your employees will speak out and question the treatment they receive. Where does it go from there? Infighting, loss of morale, resentment, and turnover are likely minimal consequences, but could extend to a lawsuit/discrimination claim.

What the laws cover

Federal, state, and local laws protect individuals from discrimination based on what are called protected classes. The list of protected classes includes characteristics such as race, age, gender, religion, pregnancy, disability, etc. Depending on the state you are in, the list can be long. These laws prohibit both disparate treatment and disparate impact discrimination.

Disparate treatment is intentional discrimination in employment, that is, singling out a particular protected class and treating it differently (i.e. worse). Disparate impact is unintentional discrimination. Disparate impact occurs when policies, practices, rules or other systems that appear to be neutral result in a disproportionate impact on a protected group.

Although one can never rule out disparate treatment as a cause of discrimination, people are more likely to believe that employers who make exceptions when hiring people may be involved in lawsuits for disparate impact.

What if the candidate who just got a higher salary or benefits to get hired is a man and the workforce is overwhelmingly female? What if the workforce is older (40+) and the new person is 25? What if newly hired employees varied in terms of race but somehow only white employees were able to negotiate higher pay or benefits? It’s all within the confines of a disparate impact, and it’s a legal minefield waiting to explode.

Finally, there are pay equity laws to consider. There is one at the federal level, and many states are passing stricter pay equity laws; it is a growing trend. Under these laws, employers must pay workers equally for equal work, and this extends to wages, bonuses, benefits, and more. For example, two hygienists employed by the same employer are likely doing equal work and therefore should be paid the same. Therefore, an employer who makes an exception for one of the hygienists may find themselves caught in a legal battle over pay equity.

Are there ways to prove that pay and benefit exceptions are non-discriminatory? Yes. There may be genuine job-related factors regarding differences in salary and benefits. Proving this, however, falls squarely on the employer and is not easy. Therefore, employers are advised to carefully consider whether exceptions can be legally supported and defended. Hasty decision-making is never a good method and, in the case of a hiring, can prove to be costly and damaging, turning this hiring decision into a real nightmare.

Editor’s note: This article appeared in the July 2022 print edition of Dental economy magazine. Dentists in North America can take advantage of a free print subscription. Register here.


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