A dentist's Guide to California Employment Law

Table of Contents

  • Introduction to California Employment Law
  • Hiring
  • Working Interviews
  • Onboarding
  • Employee Classifications
  • Associate Agreements
  • Employee Handbook
  • Documentation
  • Termination
  • Severance Agreements
  • Employment-related Demand Letters
  • Conclusion and Next Steps

Introduction to California Employment Law

California Employment Law

As a dental practice owner in California, there are prime steps to take as you navigate employment law. By following this guide, you will have a greater understanding of compliance and the inherent risks involved if you choose to not abide by the law. As new laws come to effect, we will be making real-time updates to this guide.

Effective January 1, 2020: California sexual harassment mandate gets a one-year extension

Existing law requires employers with 50 or more employees to provide at least 2 hours of sexual harassment prevention training to all supervisory employees within 6 months and then at least once every 2 years. However, under a new law (Senate Bill 1343) all California employers with 5 or more employees must provide:

    1. At least 2 hours of sexual harassment prevention training to supervisory employees; AS WELL AS
    2. At least one hour of sexual harassment prevention training to all non-supervisory employees

In addition, temporary and seasonal employees must be trained within 30 days after being hired or within 100 hours worked, whichever comes first. This training must be provided again to all employees every 2 years in the same fashion.

The first employment topic we will cover in our guide is hiring.


How to Legally Hire Your Team

Every doctor knows the impact a strong and efficient team can have on one's practice. However, not all doctors are aware of the potential pitfalls in the hiring process. Below, we discuss questions to avoid while conducting interviews.

Things you cannot ask interviewees:

  • Employers may not seek a job applicant's salary history nor use that information as a factor in determining whether to offer employment or to determine what salary to offer the applicant
  • Under California’s Fair Chance Act, often referred to as the “Ban the Box” law, employers with 5 or more employees are prohibited from asking a job applicant if they have ever been convicted of a crime unless a conditional offer of employment has been made.
  • Employers cannot inquire about an applicant's: race, color, or national origin; religion; sexual orientation or gender identity; pregnancy status; disability; age or genetic information; citizenship nor marital status or number of children

By not being in compliance with state law, you risk potential lawsuits that can cost money, time, and even your reputation.

Ways to evaluate a candidate is by asking questions that showcase a candidate's:

  • Technical skills to complete the tasks at hand
  • Aspirational skills that amplify motivation and being proactive
  • Personality fit with other team members, managers, and patients
  • Personal and ethical fit with your practice

To learn additional tips on how to assemble a team, read our article on 8 Tips for Assembling a Winning Team For Your Dental Practice.

Now that you are aware of the questions not to ask in interviews, we will discuss the nature of working interviews.

Working Interviews

As an employer, it is up to you to make sure you're staying compliant with the law and you should be cognizant of the differences between a working interview and paid work. In fact, many dentists like to conduct working interviews to get a better understanding of a potential employee's bedside manners and expertise with hygiene, handling instruments, assisting, and other tasks.

When holding working interviews, make sure you consider:

  • Structuring your skills test
  • Production of work
  • Length of time
  • Making sure the working interview isn't disruptive to the practice
  • Giving your team members proper notice about the working interview

Working interviews can be beneficial in understanding the candidate's behavior and other attributes related to their job. For more of an in-depth read on working interviews, read our article on California Employment Law and Working Interviews.

After discussing the details related to interviewing candidates, we will move on to the onboarding process.


On-Boarding and the Necessary Documents

How quickly a new team member gets acclimated to their position partially hinders a company's on-boarding process. Once a new team member is hired and completes all of their onboarding documents, they can now be trained on the proper protocols necessary for their position. Taking the time to properly train a new team member is paramount to your practice's success, as an improper hire can lead to friction in the practice and cost you and your practice money and headaches in the long run.

The onboarding documents include:

  • Signed offer letter
  • I-9 form and I-9 form instructions
  • Federal W-4 form
  • DE-4 California payroll tax form
  • DE-2515 disability insurance pamphlet
  • DE-2511 paid family leave pamphlet
  • DFEH-185 sexual harassment form
  • Emergency contact information
  • Direct deposit authorization form
  • Wage and employment notice to employee
  • Anti-harassment policy
  • DE-1857 A notice to employees regarding insurance contributions
  • Rights of victims of domestic violence, sexual assault, and stalking notice

*Note that the items listed above are either mandatory or highly recommended for all employers in the State of California.

Now that you're aware of all of the necessary onboarding documents that is needed to hire a team member, we will discuss the importance of properly classifying your employees.

Employee Classifications

Employee vs. Independent Contractor

When it comes to hiring an associate or another team member for your practice, you may not realize how important it is to properly classify their status. Improper classification may cost you time, money in taxes and penalties as well as any overtime, wage and hour, and unpaid sick leave if your associate or team member is classified as an independent contractor is deemed an employee instead. As you may have heard, Governor Newsom signed into law Assembly Bill 5 that went into effect on January 1, 2020, which makes it more difficult for employers such as dentists to classify their workers as independent contractors.

To learn more about Assembly Bill 5 and the ABC Test that is still in place to manage employee classifications, read our article on Managing Employee Classifications and Their Implications.

After realizing that your associate or team member is more than likely an employee and not an independent contractor, it is in your best interest to have you restructure your job offers and have your associate sign an employment contract, as known as an associate agreement. 

Associate Agreements

Hiring Associates

Hiring an associate dentist for your practice is a different endeavor compared to hiring team members. Having a solid associate agreement in place will lay the groundwork of what's to be expected from the associate. The agreement will also lay out the terms and conditions, as well as rules to termination. Below you will find the items to include in an associate agreement.

We strongly advise you to seek legal counsel when drafting or updating an associate agreement. By having an attorney review your contract agreement, you can ensure you and your practice are protected. To learn more about contract agreements, read our article on What to Look for in Dental Associate Contracts as a Practice Owner.

Let Us Help You Review Your Associate Agreement

Now that you're aware of the importance of having an associate agreement in place, we will discuss why it's important to have an employee handbook.

Employee Handbook

Your Most Important Line of Defense

The most important document you can have for your practice is an employee handbook. The handbook will be your first line of defense in the event something goes awry with your team members. Not only does an employee handbook protect you from liability, but it also sets expectations for your team members and lays out additional groundwork for company policies.

An employee handbook should contain:

  • Orientation guide for new team members
  • Clauses and termination policies such as at-will employment
  • Details of benefits
  • Standard conduct
  • Requirements and policies such as meal and rest breaks
  • Right to revise

The compilation of a company's policies in their employee handbook can help practice owners avoid lawsuits based on a number of allegations such as:

It should also be noted that we advise you to update your employee handbook once a year and to have all of your team members sign a document or the handbook itself with confirmation that they're aware of any changes. Additionally, we advise you to have every new hire sign the handbook acknowledging they have received and reviewed the handbook.

For more in-depth reading on employee handbooks read our articles, Employment Manual: First Line of Defense to Avoid a Lawsuit, Why an Employment Manual is Vital to Your Practice, and the Top 5 Policies that Every Employment Manual Should Have.

Besides having an employee handbook in place, another area of employment law that can help protect your and your practice from liability is using proper documentation to document notable problems with your team members.


The Power of Documentation

When it comes to disputes with and between team members, your best course of action is to have clear documentation. Having documentation can help set the record straight when unjustified allegations or misrepresentations rise to the surface.

Employee issues you should be documenting include:

  • Violating safety procedures
  • Getting into an argument with a patient, direct manager, or coworker
  • Working unapproved overtime
  • Arriving late multiple times or without adequate explanation
  • Using equipment without proper training or authorization

To learn more about what you should be documenting and how best to document, read our articles How Documentation Can Protect Your Practice In, and From, Labor Disputes, 10 Employee Issues You Should Be Documenting, and Employee Discipline: Always Ensure You Have Documented Justification.

After discussing the power of documentation in employee disputes, we will move on to termination.


Terminations in an At-will State

We all know that terminating a team member or associate can be a burdensome and stressful task. Hopefully, you have proper documentation aiding your case to terminate. If you don't have documentation, that's OK too, as California is an at-will employment state meaning that either party (employer or employee) can terminate at any time, for any reason, or for no reason at all. However, problems do arise when a former team member or associate files a wrongful termination claim. Learn how to protect yourself from liability and safeguard your practice with the tips below. Also, since terminating a team member is quite different from terminating an associate, we will discuss them separately.

Terminating Team Members:

  • Set the stage properly with an employee handbook
  • Create a strong termination policy
  • Finalize the termination including the final paycheck
  • Understand retaliatory discharge

Terminating an Associate:

  • Read through the associate agreement before calling a meeting
  • Document everything
  • Keep a cool head when approaching termination
  • Keep the discussion simple and precise
  • Think through all of the logistics ahead of time

Terminations are never easy but knowing you've taken the steps to protect yourself and your practice, will help ensure your practice can operate smoothly without the troubled team member or associate.

To continue reading about terminations, read our articles How to Legally Terminate an Employee in Your Dental Practice, When it Comes to Termination Decisions, Avoid Rationalizing, How to Prevent an EDD Audit and What to Do if You Receive One, and 6 Things to Consider When Terminating an Associate.

Another way of dealing with terminations is to offer a team member a severance agreement.

For information on terminating independent contractors, please read the blog Understanding Independent Contractor Agreements in Healthcare.

Severance Agreements

How Severance Agreements Can Protect You

We understand it is never easy to terminate a team member, whether the team member has been with you for a long time or a short amount of time, some practice owners will offer a severance agreement as an act of goodwill. Others might consider offering severance to all of their team members due to the practice shutting down or limiting hours or days. No matter what the circumstances, offering a severance agreement shows an indication that the team member was terminated fairly and not due to any reasons that could cause them to seek legal action against you

The benefits you can offer in a severance agreement include:

  • Monetary compensation
  • Continuing insurance
  • Pension programs

For a further review of severance agreements, read our article on The Critical Guide to Creating Severance Agreements for Your Dental Practice.

Let Us Help You Create a Severance Agreement

Now that we've discussed areas of employment law affecting practice owners, we will discuss demand letters and what to do if you receive one.

Employment-related Demand Letters

What to Do If You Receive a Demand Letter

As dental lawyers, we hope you never receive a demand letter. A demand letter is typically drafted by another party or by an attorney letting you know that they object to something you have done and why. These types of letters often request some type of relief in monetary damages and threaten some type of legal action if the demand is not met within a certain time frame. 

Dentists typically receive employment-related demand letters in regards to:

Contesting these claims can be costly and may result in protracted litigation. Before you do anything, we recommend you carve out time to think out your strategy.

Below, you will find steps to take in order of resolving the matter:

  • Don't ignore the demand letter
  • Assess the validity of the demand letter's arguments
  • Understand the opposite party's motives for sending the demand letter
  • Hire a lawyer to help you issue a response
  • Respond to the demand letter
  • Continue to work with your lawyer and preserve evidence

Since a demand letter is often a precursor to a lawsuit we highly advise consulting with legal counsel.

For more of an in-depth read on demand letters, read our article on 6 Tips on What to Do Upon Receiving a Demand Letter.

Conclusion and Next Steps


We hope this guide gave you some insights into California employment law and what dentists should be expected to do to stay in compliance with the law. If at any point you have any questions or concerns related to anything we have or haven't mentioned in the guide, please contact us. Whether you want to prevent future pitfalls by safeguarding your practice or have a more imminent need, do not hesitate to reach out. We wish all of you continued success in your practice!

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