After surviving the growing pains of your private practice start-up, you are now ready to add additional staffers to your current premises and perhaps consider opening a second clinic. However, before taking on these additional responsibilities, consider some basic regulatory and business requirements common to many countries like the United States, Australia and Great Britain.
Growing your practice beyond the survival phase is exciting, but it still must be managed with care and diligence. Therefore, when taking on your first employees, it’s important to deal with the following issues beforehand:
1. Permission to pay employees and withhold taxes and benefit amounts on their behalf
Initially, there may be some nervousness and scepticism prior to cutting your employees’ first paycheque. Therefore, make sure that you deal with the appropriate government department to fill out forms that allow you to pay them and withhold taxes. Similarly, new employees will probably have to help fill out a Tax Declaration form to make things official.
2. Pension and superannuation obligations
Pension plans (superannuation) are a recognised method to guarantee citizens adequate income support upon retirement. In many countries, employers are required to contribute a fixed percentage of an employee’s annual earnings into a retirement savings plan (401K in U.S., RRSP in Canada, Superannuation in Australia).
3. Satisfying minimum working condition requirements
Unlike the time you were a physiotherapy freelancer working on your own, becoming an employer necessarily brings your private practice under various types of labour legislation. Nobody doubts that you will be anything else than a model employer, however certain minimal standards must be noted:
- Maximum hours of work: Usually 35-40 hours weekly with reasonable overtime expectations.
- Flexible work arrangements: Employees who are parents of children under school age or faced with other difficult life circumstances should expect reasonable accommodation.
- Parental leave: up to 12 months unpaid leave for every employee, plus a right to request an additional 12 months unpaid leave, plus other forms of maternity or paternity-related leave.
- Annual leave: 3-4 weeks paid leave annually; an additional week for some shift workers.
- Public holidays: Paid days off for public holidays, unless duties demand work on any or all these specific days.
- Notice of termination, redundancy pay: 4-5 weeks’ notice of termination (based on experience) and up to 16 weeks redundancy pay.
In many jurisdictions, employers are required to inform staffers of their rights by providing appropriate government documentation, even when your employment contract’s provisions exceed its requirements.
4. Taxes on fringe benefits
Fringe benefits (e.g. travel or clothing allowance, gym membership, etc.) are used to improve an employee’s compensation package beyond salary and wages. Still, most countries impose taxation rules based on the value of these benefits.
5. Employee record-keeping
Keep note of the following:
- Employee timesheets and regular pay slips with details (dates, time worked and amounts paid).
- Record of pension (superannuation) payments made on behalf of employees; note special reporting requirements that apply to contributions made as fringe benefits, salary alternatives, etc.
- Employment contract stating the starting and termination dates.
- Unused leave available to employees.
After getting through the bureaucratic maze to set up the above requirements, take a few weeks to work out any issues with new staffers to ensure that both sides understand what is expected of them. If things work out with your present clinic and revenue continues to grow, you may want to add another clinic, either on your own our by partnering with other clinic owners. Always consult your accountant or legal adviser.