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Success in aesthetic medicine takes strategy, resilience, and a little bit of moxie.
Aesthetic Visionaries is where bold entrepreneurs come together to share real, actionable insights on building and growing a thriving aesthetic practice.
You already have the talent, the intelligence, and the clinical expertise. This series is your guide to navigating the challenges of entrepreneurship with confidence and clarity so you can reach—and stay at—the top of your game.
Think of it as your business coach, industry insider, and hype squad all in one. Minus the jargon and bad advice.
Ultimately, we’re here to help you stand out and sculpt a business that’s as polished and bold as your work.
Nicole Strothman (00:13):
Hello everybody. I just wanted to thank you all for attending our webinar that will deal with employment law. I'm Nicole. I'm the general counsel at Moxie. And for those that aren't familiar with us, Moxie helps aesthetic injectors and midspot owners grow with less guesswork to their business. From marketing to client retention, team coaching and business ops, Moxie gives the tools and support needed to run a profitable stress-free practice. And with that, I'm pleased to announce our amazing speaker, Iggy Garcia. Iggy focuses his practice on representing employers with state and labor employment needs. He is a shareholder at Ogletree Deacons. They have practiced locations across the country and can help clients really in almost any jurisdiction with a variety of questions around the state and federal laws, medical leave, disability, certain types of whistleblower actions. And he also defends pretty much any kind of employment claim, I would say, and has extensive experience throughout Florida as well. So welcome Iggy. Thank you so much for joining.
Iggy Garcia (01:27):
Thanks for having me.
Nicole Strothman (01:28):
Wanted to kick off. So today really what I wanted talk about, we have a number of customers and even incoming customers that are very interested in scaling their aesthetics practice and they really don't know where to start. So what would you say for some of these smaller organizations that are looking to hire, say their first employee, where would you kind of suggest they start in this space?
Iggy Garcia (01:56):
The joke about hiring is you don't want to make a problem into an employee. And so a lot of that comes from how you manage the interview process. And the biggest thing about properly interviewing employees is you have to go in there with a game plan and understand what am I interviewing this person for? What is the job going to be? What are all the facets of the job? And that's because it's really the job description that drives the interview. Where employers tend to go wrong is when they're not really sure what they want to talk about. They're trying to create a rapport with the individual but not exactly sure how to do it. They don't focus their questions on the actual job description and they start asking all kinds of questions about people's race, sex, national origin, disability, things that aren't relevant to the job and that open them up to potential discrimination claims if the individual ultimately doesn't get the job.
Iggy Garcia (02:57):
So what I always tell clients is start by having a job description of the position that you're interviewing for because the job description will spell out all the facets of the job and the skills needed for the job, the hours of the job, where it'll be located, what exactly you'll be doing, any educational requirements that you have to have, and then you gear your interview towards that job description and towards questions that are relevant to the job. So, and I'm not saying don't try to create a rapport with an individual. I mean definitely you want to try to get to know it's a balance. You want to try to get to know the individual, what they're like, what their personality is like, while at the same time making sure that they have the skills that you're going to need for that job.
Nicole Strothman (03:43):
Good point. Because I feel like meeting the culture of their organization is important, right? So how do you do that in a way that isn't running a foul, what some of these tricky situations and questions are for that candidate. So one question we tend to get a lot of is what type of employee should they hire? Are they ready for full-time? Are they looking at part-time? What's the difference between a W2 employee and it's in 99 contractor and I think in most states for these aesthetic practices, either one of those, the 1099 or the W2 can be used, I think except California. They've got some trickier rules there that need to be looked at. But what would you say is kind of the difference between the 1099 and the W2
Iggy Garcia (04:33):
A W2, either full-time or part-time employee has their place in a business obviously, and so do 1099 employees. You really need to start off by having a good understanding of what it is that you need. How much time is it going to be, how much direction are you going to have to give the employee? Is this kind of someone where we just need for a limited amount of time and we could just kind of plug and play and they already come with all the skills that we need. We don't have to train them up very much, don't have to give them much direction. We just kind of put 'em in a role and they could run with it. It's not for an extended period of time. Those are the types of positions that 1099 employees are better geared for. Where employers go wrong is that they bring somebody in thinking that they're going to be a 1099 worker and then they start treating them like an employee.
Iggy Garcia (05:27):
And because they're thinking that this individual is a 1099 worker, they're not worried about taking the proper taxes that need to be taken out of their income, they're not worried about overtime. And then what happens is they start treating the individual more and more like an employee. And I'll go into how they do that, but what happens is if you start training a 1099 worker, like an employee for purposes of the law, they can become an employee. And then if you haven't properly been taking the taxes out for FICA and income tax and all that, and most importantly you haven't been paying them overtime, if they're working over 40 hours a week, then they could bring a lawsuit against you claiming either that they're due overtime or claiming that they've been discriminated against or retaliated against or harassed, all types of claims that 1099 contractor can't bring but an employee can bring.
Iggy Garcia (06:21):
And so you want to make sure that you are treating your 1099 workers like true 1099 workers and you're not treating like employees. And so what is the big difference? It's a very fact specific analysis that the courts take part in to determine if an individual is a 1099 independent contractor or an employee. The way this stuff plays out is your independent contractor will bring a lawsuit, let's say, claiming that they weren't paid overtime or they're claiming that they were discriminated against. They can't bring those types of claims as independent contractors. They can only bring 'em as employees. So what they alle was that they were treated as an employee and so should be considered an employee in the eyes of the law and therefore that they should be able to bring a wage and hour suit or some sort of discrimination suit. And the court will first look at to determine is this individual an independent contractor or an employee?
Iggy Garcia (07:21):
If they're an independent contractor, then their claims are dismissed because they can't bring 'em. If they are an employee because of how they've been treated, then the courts are going to let the claims go forward and then you got to defend the claims themselves. And it's a very fact specific analysis. It's a lot of factors that the courts are going to look at as to whether an individual is an independent contractor or an employee. The biggest factor is the degree of control. You are not supposed to be treating your independent contractors like employees. They should not be going through the same type of training that your employees go through. They do not sign your employee manuals. They do not sign employment agreements. They sign independent contractor agreements, which are separate and distinct. They do not go through all the training that employees typically go through.
Iggy Garcia (08:11):
They typically are working for other companies beyond your company. They typically are in there for a relatively short period of time, think weeks or months, not years. They typically are not doing the central thing that the company is known for. Independent contractors are typically doing peripheral work for the company, not the central thing that the company is known for doing. And a lot of times employers will go wrong in this. They'll bring an independent contractor in and then they will start managing them just like an employee where they're controlling all the aspects of their job from when they come in to how they need to dress the hours to how they're going to do the job. That's not how you should be treating an independent contractor. When you start exerting that level of control so that the individual who's the independent contractor is with you for months or years and they're not working for anybody else, they're working for you full time, treating them just like an employee in terms of how you're managing them and stuff like that, that's where you start running the risk of making them into an employee and then with all the rights and obligations that come with that.
Nicole Strothman (09:24):
That's a great point. One thing too we start to see is obviously small business owners, they're scaling their practice. They're really worried, I would say about whether their income stream is going to continue. So they might be nervous about hiring their first W2 employee. Maybe they grab their friends and they start having their friends or their family working under the table or just on the weekends coming in and helping around the practice. How would you position, I guess, as far as having that type of relationship and maybe some of the pitfalls around those types of relationships where they're just getting not paid or even paid, just kind of cash under the table?
Iggy Garcia (10:08):
Seeing in employment law is everything goes great until it's not and you think everything's running really well until all of a sudden the employee or individual or independent or whatever they decide they're not happy anymore. And the arrangement that like you're saying, maybe possibly being paid under the table or not taking out the proper taxes at the beginning, you think that's a great idea and the individual is all for it, and then things go south and then they're not all for it, and then they're bringing lawsuits against you and then now you're in serious violation of the law, potentially employment laws, potentially tax laws. It's not worth taking that kind of risk. I totally get your point, Nicole. When you're starting, you don't know how many hours you're going to need of somebody if it's not a position where you have to be very hands-on with the person, if it's kind of like you're immense pop, but let's say you need somebody to bring in just to help with some of the IT work.
Iggy Garcia (11:06):
That's not the central function of your company. Your company is a medspa, but you need somebody every now and then to come in and do some IT work. You don't need to give them any training. They're coming in with the skills you need. You don't need to manage them very much. They could kind come and go as they please. That's the perfect kind of role for an independent contractor. You start off with something like that and then if a job starts to get more involved where you're having to manage them more, they're having to put in more hours for you, then you could transition possibly to a part-time employee and then eventually work your way up to a full-time employee. That is a much safer path as an employer, especially with the wage and hour issues because typically for most employment laws, you have to have 15 employees to qualify as an employer under the employment laws, but under the wage and hour laws you don't. So as soon as you bring somebody in, you are an employer. Under the Fair Labor Standards Act, wage and hour violations I would say are the biggest risks for small employers that have less than 15 employees. And then obviously as you add more and more employees, the risk grows. But I tell my clients all the time, there's risks with having to shrink your company just like there's risks with having to grow your company. So you'd rather be growing.
Nicole Strothman (12:26):
That makes a lot of sense. And I should know a lot of the medspa practices, they will have 1099 employees like in the injector world, those injectors may float between different types of practices and different types of employers. So it really is almost like they have their own client base aimed or business kind of popping in to kind of help with work overflow. But to your point, the traffic's not getting directed right by this one individual. So that is one difference too to note. Maybe moving on a little bit to insurance, so what type of insurance is typically needed as employees get onboarded?
Iggy Garcia (13:06):
What I see most of my client have is just a general overall liability insurance. There's not one specifically that you have to have for employees. Different industries are going to have different requirements of how much insurance you're going to need. Typically, companies in the healthcare field require higher amounts of general liability insurance than a non-healthcare field company. Most of my clients, they've got their insurance representatives that they work with that provide them the type of general liability. And on top of it, if you have a board of directors, companies will have board of directors insurance on top of that as well.
Nicole Strothman (13:49):
One other thing that kind of pops up, I would say with intellectual property protection. So how does that employer protect their client lists, protect their materials and certain things like that, and knowing again, every state has its own nuances. So this will probably be just general without obviously giving any state specific advice, but what are some protections that employers could generally use to kind of help with those client lists and materials from being taken?
Iggy Garcia (14:23):
That's a great point. If you know that your employee or even your independent contractor is going to be accessing confidential information such as client lists, marketing information, business strategy information that they're going to be having a lot of contact with your clients and building relationships with them, that is definitely something that you want to protect. And a lot of employers don't realize that until their former employer or former independent contractor has left, gone to work for a competitor and is now using your confidential information or taking your clients, there's not an automatic protection for confidential information unless possibly it rises to the level of trade secrets. A lot of states have statutes that prevent the theft of trade secrets, but you don't want to rely on that. You want to have the employees signing confidentiality agreements that protects from disclosure. All of the confidential information, that individual, whether it's an employer or an independent contractor, comes into contact with when working for you.
Iggy Garcia (15:30):
You also want to have language in there about not soliciting your employees when they leave, not soliciting your clients when they leave, potentially not going to work for a competitor. There's different non-competition, non-solicitation options that you have. And what Nicole said about the different states is absolutely true. We're talking about employment contracts, which is a type of contract. Contract law is always run by through the states and different states are a little different as to what they're going to let you have in your employment agreement from a confidentiality non-competition type perspective. So you want to make sure you have a good handle on what the state's laws you're in allows you to do in that type of agreement. But the vast majority of states are going to let you have something in that agreement. The level of restrictiveness can vary, but most states, California being one notable exception, are going to let you have agreements that put some sort of restriction on the use of your confidential information or the solicitation of your employees, your clients or working for competitors. And so that's definitely something you want to keep in mind for individuals that are going to have access to your confidential information and your clients.
Nicole Strothman (16:45):
I know we heard a lot in the news around that the federal government was going to abolish these non-competes. Can you give maybe just a little summary of where we stand with what the federal law is saying?
Iggy Garcia (16:58):
Under the previous administrations, there were attempts to pass regulations that would have abolished the use of non-compete agreements throughout the country. However an injunction was issued that stopped that regulation from going into effect. And I expect that employer, many employers would fight that tooth and nail if they tried to abolish non-competes. Right now, the current administration, while I can't say that they are super in favor of non-competes, they are not as against them as the previous administration was. They haven't shown for it to be a priority of trying to abolish non-competes. I think eventually there will be some more federal regulation of non-competes that goes in. I don't think they're going to abolish non-competes, but I think that they will be more restrictive. You're definitely seeing various different states, red states and blue states for there to be more restrictions being placed on the use of non-compete and non-solicitation agreements, especially non-compete agreements like some states have started to pass regulations saying that if you're going to be in a non-compete agreement, you have to be making a certain amount of money or you have to be salaried only positions.
Iggy Garcia (18:18):
They're definitely trying to restrict non-competes in terms of the type of workforce that you could use them against. And so like I said, you want to be very aware of where your state is at with this, because I've been practicing 25 years now, I've done a lot of non-compete work. I used to be able to draft a non-compete agreement that would be useful, that it could be used just about anywhere in the country, and you really can't do that these days. Now, there are much more complex documents that have to be tailored state by state to make sure that they're enforceable.
Nicole Strothman (18:49):
A lot of movement in that space. And I think with this topic, we have sparked a lot of questions from our audience. So as they're looking to grow, if they only have one or two employees, is it important or a requirement to have an employee handbook?
Iggy Garcia (19:04):
I think employee handbooks are really important and I think it's something you should be doing. You should create one before you start getting your employees, because your employee handbooks do a lot of things for you. They really set out the culture of the organization for one thing and what kind of employer you want to be. And also from an employment law perspective, in your employee handbook is where you have your equal employment opportunity policies, your non-discrimination policies, your FMLA policies, your hotline policies for where to bring harassment or discrimination claims. And those are all things that you want to have in your employee manual when you know you're about to start hiring employees, get that put in place prior to making the first hire. I see a lot of clients all the time, they wait till they've got many employees and then they start trying to create their manual. They now, you're trying to usually change some sort of problem with the culture of the company where if you had just done this on the front end, it would've been a lot easier.
Nicole Strothman (20:04):
That makes a lot of sense. And it's almost a good reference for both the employer and the employee to go to figure out what the rules of the road are and kind of what the expectations are where they can find some additional information. And also I think to hold each other accountable into what the expectations are. So those are important tools for employers to have. Okay, let's assume everything was going great, but now it's not. And so what sort of best practice around going through a termination that would be most protective to the employer?
Iggy Garcia (20:42):
So the biggest thing about terminating and terminating properly is the documentation that you have prior to the progressive discipline that I cannot stress enough how important progressive discipline is because what happens all the time is I'll have a client that will call me and be like, Iggy, we got to get rid of this employee. They're awful. I'm like, okay, let me see their performance improvement plan. Let me see their writeups, their first writeup, second writeups, what do you have? And then turns out they don't have any of those, or the employee evaluation says that they're a superstar. Then that employee, let's say they bring a lawsuit against you for discrimination, and they claim that you didn't fire them because they were a bad employee. You fired 'em because of their race, their sex, their national origin, whatever they're claiming and you're saying, well, no, we didn't.
Iggy Garcia (21:35):
We fired you because you were a bad employee. The question that any jury or any judge is going to have is, well, what documentation do you have to support that? They were a bad employee and really in the world of employment law, if it's not in writing, it didn't happen. You could tell me that you had numerous discussions with this employee about their poor performance, but if they're not in writing, the employee will deny. The former employee will deny that those discussions ever happen. So you have to have your progressive discipline juries understand that employees get terminated for being bad coworkers, being bad employees. They get that. What they don't get is not giving somebody an opportunity to improve. They want to see that you gave them, usually it's three strikes, your out rule, at least two chances before you're ultimately terminating. People call it the verbal, then the written, then the final, even the verbal should be written.
Iggy Garcia (22:33):
You could call a verbal if you want, but it should be written. And then you want to have typically two instances of progressive discipline prior to the termination so that you can show that you have given the employee an opportunity to improve. That's what juries like to see. So most employers, they'll typically have the first writeup, the second writeup. A lot of times they'll do a performance improvement plan after that, and then after, if the performance is still lacking after the expiration of the performance improvement plan, which is typically 60 to 90 days, then they terminate, and that's great. It shows the progression of the discipline. It shows how the employee is not improving, and it supports your reasoning, your non-discriminatory reason for the termination.
Nicole Strothman (23:22):
That's great feedback, and one thing I tend to see with even the verbal, if there is a verbal conversation, just sending an email kind of memorializing what happened in that verbal conversation so that there is then the start of that paper trail. Well, this has been super helpful, Iggy, as always, I really appreciate your time. It's amazing to catch up with you, and I'm sure that our audience has appreciated the good nuggets of some good information. As always, this is not legal advice. Feel free to reach out to Iggy or anybody on his team directly with any further information. They can go get attorney client relationship started to give more customized advice. If you're already partnering with Moxie, a great next step if you have any questions is to reach out to your PSM, and if you're not, you can learn more about Moxie at joinmoxie.com/demo. So thanks for joining us today, Ivie. Really appreciate you and thanks everybody.
Show ID (24:27):
Thank you for listening to Aesthetic Visionaries. For more resources on building and growing your medspa, visit join moxie.com/learn.