About Glenda Farmer

Leading innovative Smartdentist to provide online dental practice accreditation and infection control solutions for SMART dentists and practice managers

Staff complaint handling is more important than you think

Do you have a policy for handling staff complaints?

Our policy for handling staff complaints used to be ‘use common sense’. We did find younger staff would come and moan about how they are doing all the work and other staff said this and that to them. Handling staff was very much like handling our children/teenagers. Much along the lines of “don’t sweat the small stuff”.

This is a mistake and leaves the business vulnerable to employee claims anytime in the future.

What is a proper process for handling staff complaints?

A great place to find information about handing staff complaints is the Australian Human Rights Commission website. This has good practice guidelines for internal complaint processes. It is worthwhile looking at those resources and I used them as the basis for the Grievance and Complaints policy that you will find on in the policy templates in SmartDentist.
Basically we have the same policy for EVERY employee complaint.
If an employee makes a complaint to any 3rd party (e.g. not the person that they have a grievance with) then the complaint will be documented and dealt with per our policy.
The grievance and Complaints policy is stuck on the wall of the staff room and it is not negotiable.
In a recent case before Fairwork an employee complained about a fellow worker making a comment that she found offensive. In isolation the comment can be read as “flippant” but later comments by the same person were found to be sexual harassment (both by the firm and by Fairwork). However because the original complaint was never presented to the offending employee to explain or defend, Fairwork determined that this was unfair and this was one of the reasons Fairwork awarded the sacked employee money (~$8000) even though Fairwork found that sacked employees behavior was grounds for dismissal!

Isn’t being an employer fun?
Add the grievance and internal complaints policy to your subscription today and let staff know about it. Stick it up in the lunch room and make sure everyone is clear about what will happen.

My husband tells me I should stop reading Fairwork cases as I am just depressing him.

 

Posted in ADA

Workplace performance reviews for dental practice

Workplace performance reviews can be seen as particularly important in 3 contexts:

  1. As a requirement of QIP Dental Practice accreditation ( X2 need to be supplied)
  2. As an essential for new employees within their 6 or 12 month probation period.
    It is a misconception that you can dismiss employees in the probation period without giving reason and be free of Fairwork scrutiny. It is also less than fair for staff members to lose their position without the chance to know why or fix the issues.
  3. To gain a better workplace and avoid performance management situations.
    Often employers leave issues ‘fester’ or deal with them in the heat of the moment leaving themselves exposed to complaints of poor handling or at worse bullying or harassment.

The problems with workplace performance reviews include:

  1. These are not commonly done in dental practice. For dentists it is unlikely that they ever experienced a workplace review themselves and would never have been training in undertaking this exercise.
  2. Complaints by experienced firms that doing reviews is pointless and no-one likes doing this – not managers or staff. Limited or no positive outcome is reported.
  3. Lack of structure and goals makes the process more stressful.

With these factors in mind SmartDentist has upgraded its workplace performance review process to make it easy and simple to follow with defined goals and outcomes.

Workplace performance reviews consist of:

  1. A very simple 2 question self-reflection for employees,
  2. The ability and help to define specific goals for improvement via competence assessments.
  3. A training plan with defined courses for staff to work through with others or by themselves.

To help remind the employers when and what needs to change Smartdentist has a secure form to record under performance by specific staff members and the ability to recall these per staff member at a later date. This helps because sometimes it is the little things that are repeated and annoying that could change with some discussion and allowing the staff member to work out how to do things better.
Often in dental practice we are too busy at the time to address issues and at the end of the day we are all very tired and it is not a great time to approach an employee with a performance “suggestion”.

Getting back on track: Signoff dental policies and procedures

Getting back on track with policy management

“Sorry officer, I didn’t know!” Our short NSW holiday over the Christmas break was soured by a U turn at a set of traffic lights (fine $263). Yes, it is legal in Victoria but we now know it is not legal in NSW! We should have read the rules BEFORE we drove into NSW.
We don’t want to employ staff who say the same thing about our policies and procedures. While “I forgot” is annoying, having a staff member say “I didn’t know” is becoming a greater risk to business. Because our policies and procedures are increasing in number and importance we need a simple way to make sure our staff have access to and know about our policies and procedures. The Dental Board of Australia (AHPRA), Fairwork Australia, and Work safe seem to have a similar outlook to that NSW traffic cop and there is little tolerance of ignorance.

Helping the small business comply with the ever-increasing demands is best done by SmartDentist!
Our clever content management system allows employees immediate access to every  new policy and Smartdentist has communication systems to allow you to easily communicate policies to employees.
“Smart” employers can keep track of staff signoff and be comforted knowing that staff have access to policies 24/7. What better way to have a feedback loop online so changes can be made ASAP.

Employer guide to:

Getting back on track with policy management

  1. Go to All Policies and select the Executive report on Polices and Procedures
  2. Check if policies need to be reviewed and update (use bulk update or update individual policies).
  3. Check any additional template policies available in our Policy library.  Have you considered the new policies for your Human Resources Manual? There are over 60 policies for you to consider from our template library.
    You don’t need to let future policy additions stop you from gaining employee signoff and acknowledgement right now.
    Be relaxed in knowing that at any time in the future you can email a new policy directly to every employee and then checkout signoff for that individual policy. You can also checkout when your staff have logged into SmartDentist.

Employee acknowledgement / staff signoff

The best time to get employee’s to signoff, that they have read and understood policies, is when they are first employed.

A. New staff members

Use the New Staff Induction Checklist (HR > New Staff Induction) and you will find a link to PRINT all policies. You could print to paper or print to pdf and email all policies or a selection of policies (e.g. infection control manual or human resources manual), to the new staff member.
We also recommend you print off the “Manage Policy Signoff Requests” page for an individual and use it as a hard copy to save in a staff member’s employment file.

B. Existing staff members

Start the new year with the following process.

  1. Send all staff members an email saying that you will be doing an update on all policies and procedures to make sure that:
    a. we are all working together the one way for efficiency and time-saving,
    b. standards of accreditation and compliance mean there is a greater need for staff to help make sure our policies and procedures are correct and correctly followed.

    Let staff members know that further details will follow and they will be asked to signoff to say they have read and understood each policy.
    Ask staff members to make sure they can login to SmartDentist.
    Suggest that they save their password in their mobile phone under NOTES in the practices Contact details. One of the biggest time waster and sources of frustration is a staff member who can not login. Make sure staff members know they are not to login under someone else’s login and that you can not log on if someone else is already logged on in the one browser on your computer.

  2. Get ready to help staff with your request for signoff.
    a. Print off the individual “Manage Policy Signoff” for each individual staff member (Policies > Signoff)
    b. Print off one copy of all your policies
    c. Place these in a folder somewhere that staff can access them.
  3. Send another email asking staff to signoff on every policy explaining the location of the printed signoff and policy and procedure manual at work (so they can read and signoff without a computer being free) and that they need to have both Smartdentist and their personal signoff sheet completed. e.g. they need to get familiar with login to Smartdentist to access policies and procedures.
  4. Monitoring signoff
    The “All Staff Signoff page” gives a quick overview so you can see how everyone is progressing.
    As the administrator of Smartdentist you can also see when a staff member logged into Smartdentist and how frequently (HR> Staff profile). If they logged in and logged out you can also see the time they spent.
    Make sure you follow-up each individual.

What if a staff member refuses to signoff on policies

If a staff member refuses to signoff on a policy then it is important to have a calm and rational discussion about why they wont signoff. It is best to ask for this in writing BEFORE you address their concerns as it will allow you time to consider their viewpoint.
Sometimes there is a mistaken belief by staff members that if they don’t signoff then they don’t need to do what the policy says. This is incorrect.
You can not force a staff member to signoff a policy. You can performance manage a staff member who refuses to do what your policy requires.

 

 

 

 

 

Payroll audit for dental practices

Have you ever audited your payroll? No, me neither.
Then I started reading Fairwork decisions. Fairwork has recently awarded against an employer (surprise, surprise) granting a worker holiday pay when the employer thought the worker clearly accepted they were employed as a casual.
This has cost the employer a considerable sum of money.

How do we guard against this type of expensive judgement?

In this case if the employer paid the worker the base rate and a separate casual loading then the employee would not have gained anything. Many of us, however, have traditionally lumped the casual loading into the pay rate. Few of us have clear contracts or well-defined pay slips. This leaves us just as exposed as we would be when a patient complains to AHPRA and we have a less than perfect dental record.

Dental Business risks are more than just Dental records

Just as your dental record keeping needs constant review, it may be timely to do a self audit of employee documents. SmartDentist has recently revised its HR area to bring all staff information in the one page. e.g. policies signed off, forms signed, immunisation records, training records, employee conversation records etc. While not part of SmartDentist, we hear from small business that many people find it difficult to keep up with payroll rules and regulations. Over the next couple of weeks Smartdentist will be include audits and helpful information for practices on self auditing your business. This will follow information available to all in the Fairwork document: Guide to self auditing your business.

Part 1: Auditing Payroll Calculations and Categories (Download)
*These instructions are based on MYOB and may not be relevant for Xero

Check out the calculations used in your software program. Things change over the years and your software may never have been setup correctly.

  1. Current Tax tables – in MYOB you do need to load current tax tables into the program (even the online version of MYOB).
  2. Check sick leave accrual calculations and holiday calculations. You may be under or over entitling staff. Both could be costly.
  3. Understand what employee payments need the superannuation guarantee. Other than overtime, most wages require the 9.5% superannuation. Contractors also should be paid superannuation (to cover you against future claims!)

If you find a difference between my audit % figures and those in your payroll program, call your accountant/bookkeeper and ask why!

Payroll Category List
Within the pay slip you are required to keep a record of any bonus, loading, penalty rate or allowance that is separately identifiable. It is in your best interest to make sure you record the following as separate details on the pay slip:

  • Casual loadings – this is best as a separate entity rather than including the casual loading and hourly rate as the one amount. This reduces the business risk in a dispute.
  • Unpaid leave – record this in your program. All leave, paid and unpaid is required to be recorded by law. Again this is your guaranteed defense in a dispute.

My suggestions: Add time-off-in-lieu as an entitlement and you can start to record this as a + or – for each staff member. While the Health Professionals and Support Services Award allows for averaging time over 4 weeks it is best to have some record when asked. If you include it as an entitlement the payroll program will automate the records.

Employee Contract and Individual Flexible Arrangements

Dental practices tend to think about contracts only in respect to employing dentists but they are just as important for all other staff. The reason for having a contract is to clearly remind every one of the employee/employer relationship and obligations. If you do not have a contract the HP&SS Award effectively becomes your default contract. The benefit of a proper contract is to further expand and formalise obligations. It is never too late to get a staff member to sign a contract. It offers them security and clarity as well. Just as you can get staff to sign policies and procedures as they change, you can ask staff to sign an employment contract at any time (be nice about it).
The cost of getting a lawyer to draw up employment contracts for non-dental staff would be $2-3000 per practice. For a suite of contracts including dentist contracts and Service Facility Agreements the cost would be $4-6000 per practice. [Ask Brad Wright (Dentist and Lawyer/Barrister for advise or direction – Dental Legal Solutions]

The ADA HR has a series of templates contracts that are well worth reading to see what extra’s can be expected to be found in a contract of employment.
If you have traditionally paid a staff member an off-set amount (extra money instead of laundry, uniform and overtime pay) you can place this into contract but it may not be binding. You should consider also having an individual flexible arrangement which can clearly state these off-set amounts. Remember to regularly make sure that the staff member is actually better off with this arrangement. See the Fairwork site for more information on Individual Flexible Arrangements.

Once you have completed Part 1 of the audit have a rest!
More soon.
Glenda Farmer

Posted in ADA

Performance Management – Best Practice

Fair Work says best practice for performance management is to have a Performance Management Policy. In SmartDentist subscribers will find a completed policy on Performance Management that they can use for their practice.
This policy was developed using Fair Work Ombudsman Best Practice Guide: Managing Underperformance.

Performance Management Flow Chart

Each year Fair Work deals with 1000’s of claims for unfair dismissal. In addition I have found Employers are cautious of bullying allegations as both Fair Work and Worksafe have processes for employees to complain about bullying.
With the very wise statement “Criticise in private, praise in public” I know people are wary that when they do performance management in private there are no witnesses to contradict a bullying claim. Don’t fret. Have good documentation. You are far more likely to be seen as a bully if you criticise someone in public. Humiliating someone is never the way to improve their performance.

Good performance management means good documentation. To assist you SmartDentist now has an Employee Reporting Area, that is not seen by staff, allowing you to quickly record:

  1. Great performance
  2. Underperformance
  3. Conversations with staff
  4. Meetings with staff

The last thing an employer needs is to be challenged by Fair Work for documentation of incidents or examples of employee interactions.

Dental Policies and Procedures: practical or dust collectors

Dental Policies and Procedures on SmartDentist are practical and not dust collectors. Smartdentist model for dental practice policies and procedures is seeing more and more subscription from a couple of different types of dental practice.

  1. Dental Practices who have rarely looked at their printed Dental Policies and Procedures.
    These dental practices are very aware of Dental Board legal requirements for an Infection Control Manual. Dentist like to see themselves running “best practice”. On a practical level these dental practices are time short; have long-term staff who are skilled in doing their job, not writing about it!
    These are Dental Practices aware that having current policies and procedures is GOOD RISK MANAGEMENT. SmartDentist Templated Policies and Procedures are in “bite sized” chunks and written with a normal dental practice in mind. Anyone can modify these ready-made policies to fit their own practice model (if necessary).
  2. Multi-site or bigger dental practices are becoming a big part of SmartDentist content management for policies and procedures. Often experienced Dental Practice Managers have become very aware that policies and procedures can be useful for:
    a) Efficiency: reducing variations in multi-staff environments
    b) New staff orientation: professional and quick orientation programs were written lists make for better training.
    c) Communication: using email to let staff know about changes.
    d) Convenience: One place; online for 24/7 access
    e) Cost saving and time-saving: Most office managers love to work with teams and not spend days on paperwork.
    Smartdentist content management has features not available anywhere else. Smartdentist is a solution rather than a system!

Why SmartDentist Content Management Solution for Policies and Procedure

SmartDentist constantly works towards making usefulness the focus of policies and procedures. Our innovations are things we want for our own practice, and we keep improving to make using policies and procedures practical and worthwhile for big or small organisations. Rarely do you get insights into other dental practices policies and procedures: In SmartDentist you will find an expanding range of policies and procedures which can be adapted to serve regulation compliance and practical solutions. User friendly!

For dental practices by dental practices.

How to make your own workable Infection Control Manual

I have heard dentist say they do have an infection control manual because they have the ADA  Infection Control Guidelines!
It’s a great start but it is not what the Dental Board or the ADA wants you to consider as your OWN Infection Control Manual.
However if you want to do your own manual you can’t start at a better place than the ADA guidelines. Try the following to make your own practical manual –

  1. Print off the whole of the ADA Infection Control Guidelines
  2. Cut the guidelines up into sections representing work zones in your own clinic.
    e.g. What part of the guidelines gives insights into the actions of what part of your clinic?
  3. Label pieces of paper according to work zones or work procedures.
    e.g. cleaning up after patients.
  4. Put the heading “Policy” onto those labelled pieces of paper and then stick the printed part of the ADA guideline onto that paper.
  5. Follow the policy with the word -“Procedures”.
  6. Get the staff to write down “point form” (e.g. as a list) what actions they take. You can also video with your iPhone instead of writing and have an online procedure.
  7. Do the same with the ADA practical guides and then the Standards Australia reprocessing standard.
  8. Congrats you have a practical procedure manual. (alternatively subscribe to SmartDentist)

What does the Dental Board of Australia and other regulators want?

The DBA wants you to DO what your policies and procedures say you do!
SmartDentist helps with small readable, discussion type training exercise’s in the areas of infection control where we get the most questions.
SmartDentist encourages the use of practical procedures which are linked to; but separated from lengthy formal policies.

Changes in Dental Practice

Dental practice moves forward with the times. Computers are common place. Each staff has a smart phone. Often it is an iPhone. Gone are the days when dental practices were advised that the best manual was a printed dust collector.
Dentists time is best spent in the clinic doing what they are trained for.
Consider SmartDentist…it’s just the smart way to go.

Induction-dental-employees

A new dental staff member excitedly turns up on their first day. What sort of induction do you offer? Are you stressed or flustered trying to find forms you haven’t seen for some time? – Employee detail forms; tax declaration form; confidentiality form; Super choices form. Is it possible for New staff induction to be made easy?

Where did we find those forms last time we employed someone?
What are our legal obligations now?

We don’t employ new staff very often so it is fantastic to know that SmartDentist has just re-vamped the New Staff Induction page so it works both as a checklist and to link us to all the documents we want!

SmartDentist New Dental Staff Induction

SmartDentist.com.au New staff induction page. This is customisable or you can use it as you find it. Add your own new employee forms or check off items and use the links to print off all the documentation you could want…or send the staff member to the page and they can resource everything online.

Printed New Staff Induction Checklist

Print the page from SmartDentist and this is how it looks. What a fantastic checklist – with a space for sign off and dates.

I am so excited!
This feature wasn’t designed with you in mind! It was designed with me in mind.
We have a maternity leave replacement and we are employing a new trainee. With the SmartDentist induction page we have link to printable resources:

  1. ATO and Super forms (compulsory)
  2. New Employee details form
  3. Immunisation forms for staff to take to their GP to fill in
  4. Confidentiality form
  5. Fairwork letter of engagement template
  6. Fairwork Information statement (compulsory)
  7. Job description for a role e.g. DA
  8. Links to any compulsory policies e.g. Code of conduct; Uniform and Dress; Social Media and Mobile phone use etc (all available as templates for you to use)

Did you know that you only have about one week to be a major influence in a new employee’s life! That means you start straight away with the things that are incredibly hard to “train-out” of a person. Don’t rush with the hand hygiene policy etc. You will teach that as it is new. You will find the necessary forms from Simply Dental Chatswood and all the other fun paper work they will have to fill out and deliver them with ease, insuring the best first impression for your organization. But the mobile phone and uniform and social media are already part of this persons DNA so you need to concentrate on them first.

I am sure SmartDentist subscribers will feel the same as me – confident in appearing as professional employers on the new employee’s first day. If you need more information check out Alaska Dental Associates.

 

Is Dental Practice Accreditation about to get harder?

Anyone who has spoken to me about Dental Practice Accreditation will know what I think. Accreditation is a great idea in theory but in practice it loses out.
Unfortunately it is easy to pass accreditation without actually committing to the systematic focus (or any change whatsoever). How easy is it for “accreditation” to  just becomes a lovely poster on the wall and a stress in 2-4 years about “having to start all over again”.

Latest news about Changing Accreditation

The latest news in the accreditation world is that the ACSQHC (the organisation which sets all the rules for accreditation) has totally re-written the healthcare accreditation standards. All healthcare organisations* who were using the present standards will switch to the newer, clearer standards from Jan 2019.  * Except for dental practices who are advised not to consider the new standards because the ACSQHC is developing a new set of standards for primary care. Reading the discussion paper October 2017 Patient safety and quality improvement in primary care Consultation paper.

The consultation paper from ACSQHC includes a number of interesting propositions:

  1. Just because we don’t have quantitative records documenting lack of safety or quality, does not mean that there are not issues. e.g ACSQHC thinks there are problems but they just not sure what they are!
  2. “A systems focus, which involves making changes at an organisational level within services and reorganising care delivery systems, will help support improvements in the quality of primary care and ensure it is sustainable, efficient and effective.” According to the ACSQHC.
  3. “Private Health Insurance funds are one of the drivers for improved safety and quality and are driven by the need to ensure care provided represents value for money, and that care is clinically appropriate and in line with best practice.” – or so reports the ACSQHC!

The ADA has made a submission toward this Primary Health Care paper. The ADA will be a party to the development of Primary Health Care standards. As the PHI is now recognised in this paper as a primary stakeholder towards safety and quality by the ACSQHC it will be interesting to see how involved they become in dictating the new standards.

The Best of Accreditation ideals

Following are my recommendations for practices wishing to explore the ideals of accreditation.(With or without paying QIP for the accreditation certificate):

  1. Start using an incident reporting system so you can actually track incidents or near misses. Yes that would include stuff ups at the front desk; appointment mix ups; broken files; fillings failing too early; staff running over their feet with their chairs etc and it would also include compliments from patients – use them in marketing yourself.
  2. When you have any incident, then objectively review it from a systematic perspective. Can we devised a system, at work, that would make this incident less likely or impossible. Don’t expect staff to be hero’s in the smooth running of the practice. Risk Management is the name of this analysis. If you decide to do nothing – document it.
  3. Have policies (yes generic feel good policies) but also look at practical procedures. Video what happens with your iphone if quicker (put it on a private youtube acount – no cost). This is an excellent training resource or new staff induction resource.

SmartDentist supports an easy way to support practices with these processes.
Easy systems = Good systems = Practical systems.

Environmental Cleaning: Neutral detergents, barriers and disinfectants for dental practice

Environmental cleaning is a term used to describe how we clean up after we see a patient in the dental surgery. It also refers to how we clean in general around our dental practice. Making a decision on whether to use neutral detergents, plastic barriers or disinfectants can cause stress for dental assistants and the cosmetic dentist in Palm Beach County alike. SmartDentist’s latest online training addresses the questions and provides practices with both the legal requirements from the ADA Guidelines for infection control and the NHMRC Prevention and Control of Infection in Healthcare. Our training also has a link to some interesting research on the power of wiping!

I predict that if you come from Victoria (but more than 4 years since graduating) then you will love to barrier. We love to barrier! If you come from NSW it is likely that you prefer to wipe. SA -barriers; Queensland – both. I predict that your original training will dictate your preferences. No doubt you will come across arguments about what should be done at some stage.

Environmental cleaning is a large component of the review of the NHMRC document. If you wish to read about the latest developments in new antimicrobial surfaces take a look at the review papers.

If you don’t have a subscription to SmartDentist you are missing out. Both staff and dentists can do online training exercises which go towards their CPD. For those that are missing out go and check out what you are using in your practice. Read the manufacturers instructions and make sure your procedures align with what you are using at present.

Posted in ADA

Employee dentists and employing dentists: a dummies guide

UPDATE: You can now go into the ATO website and get a WRITTEN opinion to help you work out if you can pay an independent contractor.

You can get an online written opinion from the ATO website which indicates that you have acted on the basis of ATO advice.
“This is a record of your genuine attempt to understand your obligations for your worker and would be considered if we review this working arrangement in the future.”

BE AWARE that this only means you might not receive a fine if you are found to do “the wrong thing”. This doesn’t mean the ATO will not charge you any tax or superannuation which it believes should be owing if the arrangement is not deemed appropriate.

 

 

TYPES OF ARRANGEMENTS

1. Service Facility Agreements
In order to avoid some questionable arguments about whether a dentist is a true contractor it is becoming more common for practices and dentists to work under Service Facility Agreements. Instead of a practice bringing in a contractor, the dentist virtually “hires” a facility to work!
The Chicago dentists in the Loop are self employed and pays a fee for an entity (e.g. company) which provide all the services needed in order to practice dentistry, also Orthodontists Melbourne provide orthodontic services. e.g DA’s, room, materials etc etc. In this structure the dentist is not technically employed by the practice.

If the income/payments received from clients (patients) are paid to a service company Výsledek obrázku pro dentistthen this can be seen as a employee, contractor or employment agency agreement which can then be contested as a sham arrangement or subject to payroll tax grouping.
In order to avoid this, income payments are received into a trading trust account which has the sole role of receiving payments. From this trust money is distributed to the dentist and to the service company as per the service facility agreement. Trust distributions and company dividends are not subject to payroll tax.

As an example for Service Facility Agreements, money received in fees is held in a trust account and the dentist is able to take 34% (for 40% commission) of these fees and the practice receives payment of 66% (including GST) for providing the service facilities. As the dentist is seen to have paid the 66% including GST as a business expense they can claim back the 6% in their BAS statement.

Labour laws should be observed no matter what kind of business organization you have. You can talk to Labor Law Compliance Center professionals if you have any questions regarding labour law posters that can satisfy the employment workplace posting requirement.

ADVANTAGES DISADVANTAGES
Owner Dentists earning are not included within practice wages so not counted towards payroll tax.
Specialists like the top cosmetic dentist in Garland TX are self employed so more clearly legal responsibility for own work. Easier to manage once set up.
High set up costs and on going accountant fees;
Experienced lawyer and accountant needed for correct legal entities.
Dentist (worker) Control own superannuation. e.g. don’t really have to have any.
Own GST claimable deductions
Company ABN needed
Own GST reporting (BAS). Need to claim back GST so some minor delay in money received.
Paying your own tax /own superannuation so good record and cash management is required.
Higher Accountant fees than if employees

[About Payroll Tax
Once wages rise to a certain leave in a business, the business needs to pay the state government payroll tax. This of course increases the cost of running a business.
Payroll tax is a state based tax on wages (including superannuation and contractors wages) and it is about 5% of the wages bill once a certain threshold has been reached. The threshold where payroll tax occurs varies greatly from state to state.
Anyone starting a practice or buying a practice might be wise to set up the business structure to allow for dentists to be employed under a Service Facility Agreement so payroll tax remains unlikely. Service Facility Agreements require very specific business structures and should be setup by lawyers very experienced in this field. The benefit for dentists working in this arrangement is that the complexities of retained Fairwork entitlements and retained Long service leave entitlement are not an issue. Dentists are able to decide on whether they consider superannuation a good investment for their particular stage of life. Superannuation is not compulsory for the self employed.]

2. Employee – Only Commission based calculation
This is the arrangement that I am familiar with. I would never recommend it because it is quite complex to manage.
Example: The dentist gets 40% commission (or whatever is agreed upon) which is to include all entitlements such as superannuation, holiday pay, sick pay and long service leave.
Practices (owners) paying with this system need to have an extremely clear idea of all entitlement rules and keep very good records and supply excellent pay slips.
Practices will be retained money from the dentists commission to pay for entitlements. Until entitlements are used the money stays with the employer. Employees dentists need to have a good grasp of the entitlement requirements so they can minimise the money retained by the practice owner. The money retained by the practice for future payment to the employee dentist may be higher than 20% of their total wages.

ADVANTAGES DISADVANTAGES
Owner Retain employee’s money for future entitlements so good for business cash flow Difficult to work out and keep track of entitlements.
Need to have a great understanding of entitlements. Need excellent documentation.
Dentist (employee) No accountants fees – simply employee.
Superannuation paid
More earnings are unavailable as the practice protects itself unless all holidays and sick pay are used each year.
GST costs are not tax deductible unless the practice agrees to include them in costs.

Understanding entitlements:
1. Sick pay is cumulative and can’t be paid out. Personal leave and carers leave accrues at a rate of 10 days (2 weeks) per year (full time). To gain access to withheld entitlements employed dentist should say they want personal, sick or carers leave for the first 2 weeks (for full time worker) of time taken off per year. There is no legal requirement for a medical certificate if the practice does not require this. By taking sick leave rather than holidays the employee enables the practice to reduce the withheld entitlements. (e.g. the employee dentist can access more of the money they are owed)
2. Holiday pay – it is possible to pay out holiday pay once a worker has more than 4 weeks owing. At any time the minimum retained amount of holiday pay needs be 4 weeks. Holiday pay in excess of the 4 weeks can be paid out if the employee asks for it.

If the employee dentist takes all sick time (2 weeks) and all holiday time (4 weeks ) then the practice would only need to retain 1 weeks pay per year against future long service leave requirements. The complexity of the calculations makes this system of employment annoying to manage. If any of the employees’ rights are violated, consult Larry H. Shapazian.

3. Employee – Base salary + Bonus = Commission %
The best option for minimising money retained for entitlements and for simplier calculations is employing a dentist on the minimum wage and paying bonus payments to achieve a commission equivalent payment..
In this arrangement dentists can take advantage of the fact that there is no award for dentists. 
The simplicity of using a fixed low hourly rate to determine entitlements liability, means the employed dentist has minimised the dollar value of retained entitlements and the practice has minimised their liabilities. This is most attractive to both the employee dentist and employer dentist.

Other considerations to benefit employee dentists
Tax deductible expenses incurred by the employee dentist, which include GST, can be paid by the practice and the non-GST cost can be deducted from the overall commission (as with Lab fees). There should be no problem with the practice doing this and will save the employed dentist money.
Employee dentists should remember to ask for personal/carers (sick) leave when they take time off. This helps the employee keep retained entitlements to a minimum. Holiday pay can be paid out (subject to restrictions ) but sick pay will be an accumulating liability so it is important to minimise accrued sick leave.

How employee dentists can gain access to all accumulated entitlements
Resigning from a practice should release all accumulated entitlements. Practices can then re-hire the employee dentist with a zero entitlement balance.
The benefit to employee dentists is they can have their money “now”.
Practices should NOT do this if any personal/carers (sick) leave is owing. Termination payments must include superannuation (which is not generally required for termination payments). Termination payments must clearly state what the entitlements are for: e.g. Holiday pay and long service leave.
RISKS: it can be argued that re-hiring someone without a 3 month break constitutes continuity of service so all their entitlements still stand. In the worst case scenario if this was found to be true then all that will have happened is the holiday pay will be seen as have been paid in advance (which is legal) and long service leave will have been paid before due (also legal). Sick pay accumulates and can not be “paid out” so any “payout” of sick pay would not be recognised by law and the practice would still owe it!
You can not set up fixed length employment contracts e.g. yearly, and reset the entitlements each year as this is seen as manipulating the system.

Using MYOB with an employee dentist payment
a) Minimal wage + bonus
1. Make sure Holiday pay; Sick pay and Long Service leave are enabled and the rate per hour is correct and ticked as enabled for this dentist. For example:
LSL = 1.6667% of gross hours for Victoria (some states have different rates)
Holiday pay = 7.6923% of gross hours (leave loading is not required)
Sick leave = 3.84615% of gross hours
(Check MYOB help to see if this is correct for your practice)
2. Set up a standard pay
Set the standard hours and the minimal hourly rate (make sure you adjust this whenever the minimal pay rate increases)
3. Pay the dentist at the same time as other staff e.g. fortnightly.
Immediately after the first payrun into a new month you will make an additional payment of a bonus. As this dentist now received a fortnightly minimal wage they will be $2800 ahead in payments compared to the old system of end of month payments. Hence if their bonus is a bit late it is hardly a point for complaints!
At this point you will need the following:

  1. Your record of Net earnings since they started. e.g. ( Total Fee Income minus lab + other expenses) X Commission %
  2. MYOB report of payments since they started (this will show Wages (including tax) + tax + superannuation payments)
  3. MYOB report of entitlements owed
  • (Entitlements money you need to keep Z): Multiple their Entitlements owed by their hourly rate (minimum wage rate). Add 9.5% of that total to account for super that will be payable. This is the total amount that the practice should keep aside to pay for future liabilities (Z).
  • (What the practice really owes the dentist X): Calculate the total commission payment that they would have been entitled to since they commenced work (X).
  • (How much the dentist has already been paid V+Y): Use MYOB report of individuals total payments to see their total payments (make sure their most recent payment is included in this total). This will be all payments (V) + all superannuation (Y).
    Note: Find transaction for their card only shows what they were received with tax and super removed so be aware what you are looking at. REPORTS is the best place to source this.
  • Bonus = X -( Z + V+ Y) . Remember your Bonus Gross must include superannuation and tax. You can make a bonus payment by doing an individual employee pay run in MYOB. You will need to adjust (increase) the tax paid for this single payment, as MYOB will not work this out correctly. (hence you will need to adjust the actual bonus figure you place in MYOB)

b) Wage solely worked out on the commission only basis
MYOB can help with this way of working out payment and recording payment as well. It is important that your employee dentist receives a payslip clearly stating what pay was for e.g.  holidays and other entitlements. It is worth the time to get MYOB to generate a correct pay slip so there is no option for future disputes.
1. Set up MYOB for a Salary worker so holiday pay; Personal leave and Long service leave are calculate on a “hours” per year or month basis. You will need to set these up as separate new payroll categories as you can not change MYOB’s payroll categories per individual. Instead of new payroll categories you can use the hourly basis as above and pay wages rather than a salary but you will find you need to adjust the hourly rate each pay period.
Long Service leave : 32.9335 hours per year for a full time dentist
Holiday pay = 152 hours per year (4 weeks x 38 hours) or 12.67 hours per month (152 hours / 12 months)
Sick leave = 76 hours per year (2 weeks x 38 hours) or 6.333 hours per month (76 hours / 12 months)

While the dentist on a “salary” you will still need to make calculations to determine how much money to keep aside for entitlements. Your legal obligations are to pay entitlements for hours taken and not as a percentage of money earned.
You will need to record any entitlements taken on a hourly basis to avoid disputes of money owed.
MYOB (or equivalent) is handy as it will keep a total of hours owed and will be used to produce pay slips clearly stating entitlements paid out.

At this point you will need the following:

  1. Your record of Net earnings since they started. e.g. ( Total Fee Income minus lab + other expenses) X Commission %
  2. MYOB report of payments since they started (this will show Wages (including tax) + tax + superannuation payments)
  3. MYOB report of entitlements owing
  • Calculate the total commission payment that they would have been entitled to since they commenced work (X). Use MYOB report of individuals total payment to see their total payments (make sure their most recent payment is included in this total). This will be all payments(including tax) + all superannuation (Y).
    Note: Find transaction for their card only shows what they were received with tax and super removed so be aware what you are looking at. REPORTS is the best place to source this.
  • Calculate the total number of hours worked (including all sick and holiday time taken) this month (since the last pay) (A). Calculate the hours of entitlements remaining  (MYOB + current months figures) (B).
  • X – Y = Z (remaining money owed). The remaining money owed (Z) needs to cover this months pay (J) + any entitlements owing (K).
    Total hrs that need to be financed = Hours since last pay(Q)(including any entitlements) + hours of entitlements owed (M).
    Z divided by total number of hours = hourly rate (W). So payment this month would be hours this month Q multiplied by hourly rate W. This would be a gross payment which includes superannuation. (Q*W*0.913242 = payment without super. Super would be Q*W*0.095)
  • Make sure as you may double check what you are paying:
    1. Total that the dentist is due via commission since starting = (total paid out (including taxes and superannuation) + entitlements (including superannuation) that they haven’t yet taken.)

Public holiday pay
Employee dentists also need to be paid for public holidays. Neither system above using MYOB accrues public holiday pay but as both rely on monthly reconciliation of payments this amount will not greatly alter payments. If you wanted to be really accurate with retained liabilities then a MYOB payment category for public holidays would be added and the accruing rate would be similar to the sick leave payment. It will vary from State to State and depend on the actual working days of the employee dentist. As the long service leave liability only occurs after 7 years the practice owner will already be accruing a liability that may never occur (so you are retaining one week of pay per year for long service and you may never need it if they dont stay that long).

MYOB and Journal entries
While MYOB will not do calculations for you it is possible to keep a running tab of both total “commission due” and “payments made” to employee dentists in your profit and loss or balance sheet via journal entries. The logical place for money earned is the profit and loss while the running total of payments and remaining entitlement money is on the balance sheet. MYOB will do totals and subtotals to help with the running tab. The benefit of doing this is for clear reporting so excel spread sheets don’t need to be accessed by multiple business owners (but you will need them for easy calculations).

NOTE: If following my calculations you need to be certain that they work correctly for your situation and let me know if you find something incorrect so I can alter them. While both these options look more complicated than simply paying a contractor you will find they are manageable for whoever does your normal pays. Owners should, however check that the results are correct by returning to the basic total fee X commission rate and compare it to the total payments (including tax and super).

*Victorian Dentists Dec 2017. ADA Human Resources advice.

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