UPDATED 11/9/22
In a dental practice, you have different agreements with your employees. You hire many at will, such as your front office staff.
You hire others, such as associate dentists and hygienists, through an employee agreement. Before having these dental employees sign on the dotted line, you need to be certain your employment agreement is legal and contains provisions that protect you and your employee.
Table of Contents:
• What is an Employee Agreement?
• Different Employment Agreements
• Advantages of an Employment Contract
• Disadvantages of an Employment Contract
• What to Include in Your Employment Contract Template
• Why Use an Employment Contract?
What is an Employee Agreement? 
Whenever you hire an employee, you are entering into some type of employment agreement or contract. These agreements usually spell out the conditions of the employment, including salary, hours, duties, etc. In short, you and the employee mutually agree on the job’s conditions. These agreements can be written, oral, or implied. So even if you do not have anything in writing, anyone working at your practice has entered into some sort of employment agreement.
Different Employment Agreements
The three most common employment agreements are at-will, written, and oral agreements. In a dental practice, these distinctions are especially important.
At-Will Contracts
Most employees in the United States have at-will agreements with their employers. This type of agreement means that employers can fire their employees without giving warnings or explanations as long as these dismissals do not violate anti-discrimination laws. Under this agreement, your employees can also quit whenever they wish.
Most states allow this form of employment, but many professions, such as education and skilled laborers, have unions that dictate the terms of their employment and offer protection from being fired. While you may have some dentists and specialized staff with written contracts, most of your dental practice’s employees are classified as at-will.
Oral Contracts
Oral ContractsAn oral contract is the most informal agreement you can have between an employer and employee. You simply agree to terms orally without any documentation. Both parties have to trust the other to follow through on their commitments. However, even well-meaning people may not interpret the terms the same. Also, this type of employment agreement is extremely hard to enforce since there is usually no proof of the agreement. A third-party witness would be the exception.
Written Contracts
Dental practices often use written contracts for associate doctors and dentists. Many are considered independent contractors, and at-will employment is not appropriate for their positions.
In the dental industry, a written contract will include the details of the agreement so that it is legal and binding on both parties. As the employer, you will want to include a non-compete clause so that a practitioner leaving your employ cannot move to a competitor and take along patients from your practice. The employee will want their salary, benefits, and duties spelled out in detail so that there are no misunderstandings.
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Advantages of an Employment Contract
An employment contract prevents many misunderstandings between the parties. If your new associate doctor questions his duties, you can both refer to the agreement. If you question the benefits your employee is expecting, the employee agreement should make the terms clear. In fact, the employment contract may save everyone from a costly lawsuit. When it comes to employment, it is always better to get things in writing whether you are a healthcare practitioner or in management.
You can also attract and retain top talent when you use an employee contract. Top doctors or dentists want some security when they take a new position. They cannot leave and you cannot fire them without cause during the contract’s term.
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Disadvantages of an Employment Contract
An employment contract does have disadvantages for a medical practice. If your practice experiences a downturn, you cannot simply dismiss doctors to save money. You will be obligated to keep them on and pay them as agreed until the end of the contract. These agreements limit your flexibility during difficult times.
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Types of Employee Contracts
You may offer several types of contracts, including:
• Full and part-time contracts – These documents spell out general hours, standard pay, holiday pay, paycheck deductions, rest breaks, lunch hours, etc., for an indeterminate period.
• Fixed-term contracts – These contracts are for a specific period, often determined by a specific project or circumstance. You might hire a dentist for a year to cover the leave of a long-term associate.
• Temporary staff contracts – The agency creates its own contracts, which are for workers who usually help with billing, auditing accounts, etc. While you pay the agency for their work, the contract is between the employee and the agency and not you and the employee.
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What to Include in Your Employment Contract Template
When you are creating an employment contract template, you should include the following items:
• Employee’s Salary – This category should include holiday pay and overtime pay if applicable.
• Work Responsibilities – This section should be detailed and include all responsibilities to avoid later conflicts. 
• Protections on Confidential Information – This section should include patient privilege regulations, especially HIPAA rules.
• Probationary Period – You may choose not to use this on certain recruits, but it protects you in case of low employee performance.
• Termination – You need to establish what behavior can lead to termination and how this termination will be handled. By doing so, you may avoid serious legal issues.
These are the basics that all employee agreements should contain, but your medical practice might need to customize your template and add other pertinent categories.
Why Use an Employment Contract?
A well-written employment contract will protect all involved parties. A new employee agreement is helpful because you are beginning a working relationship that is vulnerable to misunderstandings. No employee hiring agreement can eliminate all the risks, but these contracts can limit harmful actions on both sides and pave the way for a long-term working relationship. They help provide workforce stability and limit legal actions.
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How HR for Health Can Help
HR for Health has a team of experienced consultants who understand the complexities of medical practices. They can help you with most HR issues, including using your EHR system to create and manage employee agreements. And their expert legal team can ensure that your agreements stay in compliance with federal and state law. For more information, contact HR for Health here.
