#895: HR 101: Classify Your Employees Correctly (Or Else)

Dental A Team Podcast

Paul Edwards, HR extraordinaire and founder of CEDR, breaks down with Kiera the classification of employees from a federal perspective. He touches on how to know if you’re classifying employees right, where state laws come into play, what happens when there are penalties, and more.

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Transcript:

Kiera Dent (00:01.622)

Hello, Dental A Team listeners. This is Kiera. And today I am so excited to be having one of my favorite guests here today with us, Paul Edwards. He is the CEO and founder of CEDR my favorite dental HR company. And I am so jazzed because there have been some things like roaming in politics, roaming around this globe that I felt like Paul would be the best one to bring on the podcast and kind of shed some light on what should employers be looking at? What can we be doing to keep ourselves protected? So Paul, welcome to the show. How are you today?

Paul Edwards (00:29.046)

Kiera you are so full of energy. I'm good, I'm good. And I'm excited to kind of do a little HR nerding today on your podcast. Thanks for inviting us, I appreciate it.

Kiera Dent (00:31.254)

Yeah.

Kiera Dent (00:39.966)

Absolutely. When I heard some of the things coming to the table, I just thought, gosh, I've got to reach out to Paul. We've got to have some fun geeking because HR is not my specialty and that is definitely your specialty. And so wanting to just make sure that we really dove into this. So the reason I reached out to Paul, if you guys haven't heard, we definitely have linked other podcasts for you guys. So be sure to check them out. Paul and I have been on the podcast a few times. CEDR is the number one recommended HR dental company. I refer all the time because

Paul Edwards (00:44.651)

Mm

Kiera Dent (01:08.118)

Paul, you guys just make people's lives so much easier. have offices that use you and they're like, I'm so grateful for CEDR. And kudos to you guys as newsletters. Like I click on every newsletter you guys send out because the topics are so relevant. So if people don't know about CEDR before we kick into this, just like Paul, can you tell them a little bit about who CEDR is so they can get those newsletters as well? And then we're going to dive into some juicy political topics that are on the HR ballot today.

Paul Edwards (01:17.622)

Thanks.

Paul Edwards (01:31.226)

yeah, okay, so for everybody out there, CEDR, C -E -D -R Solutions, you can find our website. If you go to our website and you input your name into one of the forms, what you end up doing is putting yourself into our education community. So unlike other companies where you start getting phone calls and everybody's trying to sell you something, we'd love to have you as a client, but as a precursor to that, if you're just out there and you want HR education, we want you in our community, and that's what you're talking about, Kiera. The reason why you like those newsletters.

is because we have 3 ,000 members across the entire country and they're asking us to help them solve these HR problems. And so we use those questions to create our roundups because they're literally and actually what's going on in the world today. what we do for our members is we provide you two components.

Compliance, so when you have a problem with an employee, almost any problem, there's some kind of law, rule, or regulation that probably regulates, which can and can't do, and they can be everything from local, county, city, and it goes all the way up to the feds. So we can help you solve a problem taking two looks at it. The first look is compliance, what does the law say we have to do, and the second thing is what we call the human side.

which is we're working with human beings and you can call a lawyer and say, what would I do about this? And they'd say, fire her. But that lawyer doesn't have any experience of what it's like to replace her, to train her, to lose all of your investment in somebody. And so we take that very human approach and we have a group of experts here who get on the phone with you through email. We have all kinds of resources and we help you solve your HR problems.

Kiera Dent (02:56.574)

Mm

Kiera Dent (03:16.628)

Absolutely. They're incredible. It's like, what do I do when my employee wants to take over time or if my employee didn't show up or I feel like your guys's education is so telling. I can tell you got your audience very dialed in. And so it's very informative and truly my office managers and doctors who you see there feel so confident in being able to make decisions versus offices who don't have you in their back pocket. They're like, Kiera, what are we supposed to do? I'm like, this is where you check into your state laws.

Paul Edwards (03:30.016)

We do, yeah.

Kiera Dent (03:45.862)

reach out to your lawyer because every state is different. So that's why I just am obsessed about you guys. I think you guys do an incredible service for the dental community. So massive thanks and appreciation. So definitely recommend everybody get in that educational resource because I just think it helps you. Even things that you might not be thinking about, I think you guys do a great job of spurring and educating, which hopefully today's podcast also does. So, So what I reached out to you originally was I

Paul Edwards (03:46.015)

Yeah.

Paul Edwards (04:07.86)

That's exactly what we're gonna do today.

Kiera Dent (04:14.72)

this whole NDA thing came up of what's going to happen if the NDA bill passes and an NDA is a non -disclosure and then there's the non -competes as well. What happens with doctors, especially with associates being able to go and work for practices that are so close to them. And so I just want to reach out. I know this is actually going to not be our juiciest topic for you guys. have a juicier one coming, but Paul, if you could kind of just shed some light on what does that look like? Where does that kind of stand in legislation?

Paul Edwards (04:35.669)

No.

Kiera Dent (04:43.114)

and what should practices know about this.

Paul Edwards (04:45.376)

So the FTC wrote a rule that wanted to get rid of, ostensibly get rid of all non -competes. I mean, there were a few that could survive, but they ostensibly wanted to get rid of them. And their stated reason was that it was tamping down employees' abilities to be mobile, to be able to change jobs, move someplace else. And not a terrible argument, but not a good overall general argument.

Kiera Dent (04:55.435)

Mm

Paul Edwards (05:14.486)

Predictably, that rule was challenged in both the Florida court and I think two Texas courts. I'll just cut to the chase, everybody. The judges involved in those cases put a, the ones in Texas put a stay on it, which means, legalese -wise, that just means they put a big pause button on it and said, you know, the parties involved, including the federal government, are gonna have to come back and argue some more in favor of this.

And we kind of could see that that's what was gonna happen and that's what happened. So based on some recent Supreme Court rulings and stuff that's going on out there in the world, in the legal world, this thing has been paused and I don't see it unpausing for months, possibly years and maybe, Kiera, never. So it's just, it's not a thing anymore.

Kiera Dent (05:47.734)

Mm

Kiera Dent (06:01.672)

Yeah, which is such a great thing. And again, when I reached out to you, our schedules couldn't quite align for us to get there. And it was like really hot. And I know a lot of doctors were concerned about that because agreed. Everybody was like, this is going to be very impactful because the reality is I don't think any employer truly wants to hurt. mean, I'm sure there's some out there, but generally the dentist, they don't want to prevent other doctors from being able to go get another job. That's not what it is.

Paul Edwards (06:08.939)

Hmm?

Paul Edwards (06:12.82)

We were freaking out. Yeah. Yeah.

Paul Edwards (06:23.232)

Hmm?

Kiera Dent (06:29.51)

what they don't want to do is set their practice up to where all those patients could be pulled very easily to another location because that's really like that doctor who hired these associates took the risk and they don't want to have the greatest asset of that practice as patient base being able to be lifted out. And I think that that's where the argument's at.

Paul Edwards (06:45.29)

That's, yeah, that's precisely, that's precisely correct. And really it was gonna be damaging. And since it's not going into effect, we don't have to go too far into it, but it was really gonna be damaging in ways that the federal government didn't understand or didn't seem to perceive. They could have put written a different kind of rule and put a lot more limits on it. And by the way, non -competes are very limiting.

Kiera Dent (07:00.886)

Sure.

Paul Edwards (07:10.838)

There's a lot of limits and some states won't let you have them. Other states that will let you have them say you have to have these specific provisions in them. It can't be too broad. It can't be designed to punish someone for leaving. You you put 30 miles in your non -compete and you're in downtown Chicago and your non -compete is probably going to become invalid. You know, but you put four blocks and that'd be a different story. So like all things and I'll bring it all the way back to HR, the details matter.

Kiera Dent (07:11.242)

Mm -hmm.

Kiera Dent (07:22.56)

Mm -hmm.

Kiera Dent (07:28.585)

Right.

Kiera Dent (07:34.697)

Absolutely.

Paul Edwards (07:40.436)

Right? It really matters. But for now, we don't have to worry about this.

Kiera Dent (07:41.1)

Mm -hmm. For sure. Which is great. And that's really what I wanted to bring you on because I know it was really hot and it was really scary and it was, what are we going to do? And that's where I like to have this podcast be up and coming. so Paul, there actually are a few other things that I do think are really going to impact that people should be aware of. And that's this 1099 world, hygienists, associate doctors, like kind of this world, which I think strategy wise from the business's standpoint is it's hard to hire.

Paul Edwards (07:58.762)

Mm

Kiera Dent (08:10.732)

It's hard to hire right now. It's been hard to hire since I think 2020. think all of us are still feeling that. And so I don't blame employers for trying to get creative and think outside the box. However, with that asterisk, legalities and payroll and how we hire can really truly impact a practice and do some pretty serious damage if not done correctly. I've seen some class action lawsuits. I've seen big lawsuits.

1099s and misclassification of employees is a very big deal. So Paul, this is your world bigger than it is mine. I just have a very strict lawyer on me. So that's the only reason that I know, because I used to do it pre -COVID. We were in a 1099 world. And I remember my lawyer called me and he said, Kiera, you're welcome to do whatever you want to do. He said, but I just want you to know. He said, I just want you to know that this can become a federal offense on you if it goes. And I was like,

Paul Edwards (08:47.7)

Mm

Paul Edwards (08:54.641)

Such a lawyer thing to say.

Kiera Dent (09:03.466)

So I draw the line, I'm cool to stay in gray, but I'm not okay to go to federal prison. So that's like where I draw lines. But Paul, please, not to scare anybody, but to educate about where this can come into fact and how can especially employers protect themselves in this world.

Paul Edwards (09:07.946)

Yeah.

Paul Edwards (09:19.434)

Well, look, the first thing that I want to tell everybody is that you might not know this, but I think you might know it, but I'm going to put it for you in kind of stark terms. As the employer, it is your responsibility for you to classify your workers properly. They really don't get they, your employees, your prospective employees, don't get to make that decision. They cannot make that decision for you. And so there's a set of rules.

there's two sets of rules actually. The IRS has a set of rules, they call it the test, and the Department of Labor has a set of rules, and incidentally they call theirs the test too. And if you put the two rules up with all of the little things in the test, and there's many, many bullet points in each test that says if this is true, if this is true, if this is not true, and you go through the whole thing, there's a lot of crossover talk there. So that's, I guess, to some degree, it's beneficial.

Kiera Dent (10:07.009)

Mm.

Kiera Dent (10:15.436)

Sure.

Paul Edwards (10:16.042)

But what I do want to say to everybody is that if you use the test or don't use the test, whatever you do, if you violate this rule that we're talking about, you can be committing tax fraud and you can also be breaking the law when it comes to the Department of Labor. And so it's kind of a double whammy. And here's the important part, Kiera, is that you're leaving a paper trail behind that you cannot defeat.

Kiera Dent (10:34.305)

Mm

Paul Edwards (10:43.104)

So this isn't a he said, she said, you can't claim I didn't do it. If you get it wrong and you misclassify someone as an independent contractor, that means you're not paying the workers comp. So that's a problem. That's unlawful underneath your state laws. Because you misclassified them doesn't matter to the state. You still broke the law. You're not paying their matching social security. You're not paying withholding and paying taxes. And again, you're not paying your portion of the social security.

Kiera Dent (10:43.18)

Absolutely.

Kiera Dent (10:53.857)

Thank

Paul Edwards (11:09.674)

So why this matters to both the feds and the state is this is taxable income and you are not paying it and you actually, you are gaining some small advantage. I maintain it's not enough for you to get this wrong. And you're also helping the, you're costing the state and the feds because the person who's misclassified is writing things off that employees cannot write off. So they're acting as if they're in their own business. So what we found,

Kiera Dent (11:15.339)

right.

Kiera Dent (11:34.613)

Absolutely.

Paul Edwards (11:38.998)

is that we've got a lot of hygienists who have come to the practice. Now they may come by themselves, they may come be offered up by a temp agency who's not getting this correct. They will come to the practice and say, want to be paid as an independent contractor. And what they're saying is, if you're paying me $75 an hour, I want $75 an hour to be given to me. And that doesn't...

Kiera Dent (12:05.448)

Mm

Paul Edwards (12:07.678)

work when we look at what the rules are with regards to classifying people, Kiera. So, you know, any questions so far?

Kiera Dent (12:16.844)

Yeah, I think something I've also felt that there's a fun game in. And I think if we think of it as a game, as opposed to like stressful, I enjoy that a little bit more. These classifications actually do change quite a lot. And like what the IRS is sticky on or not sticky on, I do feel also changes because this 1099 world, I understand, like, if you look at people's motives, the hygienists want to get paid more. They want to be able to take home more salary.

Paul Edwards (12:45.664)

Mm -hmm.

Kiera Dent (12:45.804)

So I understand completely why they're wanting to do it. But again, my lawyer, he told me very well, he said, Kiera, the definition of a 1099 is like a gardener that comes to your house or a lawn care crew. They tell you the day, they bring their own tools, they don't use any of yours, and they tell you the fee that you're going to be paying for that service. He said, now, if you have an employee that's doing anything different than that, or you have someone who's different than that, most likely they're probably not a 1099.

Paul Edwards (12:56.554)

That's a good way to describe it.

Kiera Dent (13:12.8)

And so that's kind of helped me. just think about this Gardner or lawn care crew, because I feel like it really makes it very simple for me of where am I going to be? And honestly, like you said, Paul, I don't think employers realize the implications if you get this wrong. It is big because we have looked, and I think this will also tie into like exempt and non -exempt employees too. But we also have to look at the IRS and the federal and the state reasons why they're doing this too. Yes, we should be classifying correctly.

Paul Edwards (13:16.554)

It's good.

Paul Edwards (13:27.796)

Mm -hmm.

Kiera Dent (13:40.5)

because everybody right now with inflation and costs and whatnot, people are getting smarter and stickier with making sure we're following the laws and the rules. So I think looking for motives and reasons, but really, I don't know, I enjoy sleeping at night as an employer. And I think this is a great way to help yourself stay out of it. So not necessary questions, but definitely I think it's a big issue and an easy way to determine that hygienist is not bringing their own tools with them. They're not setting the hours that they're going to be working.

Paul Edwards (13:47.37)

That's true.

Kiera Dent (14:07.084)

They could be telling you the pay they're going to be getting, yes, but they're really not coming, doing their thing and leaving. You're providing the patients for them. You're providing the instruments for them. You're providing the chair for them. You're providing the team for them. They're working within the hours of your practice. They're really not. Now, I think someone who is an independent contractor for a contrast is like if an anesthesiologist is coming to the practice, they're bringing their own tools. They're bringing their own equipment. They usually bring their own team. They're coming.

Paul Edwards (14:33.174)

Kiera, have you been reading my blog?

Kiera Dent (14:36.908)

I just think I'm very passionate about this stuff because I think employers who get it wrong, this is where we get into hot water, unintentionally trying to save a few bucks that's going to ultimately cost us a lot in the long run. And I think, again, analogies always make my life easier. So that's probably why I do it.

Paul Edwards (14:56.052)

No, no, that's a very good example that you gave. so the first example of the gardener is a very good example. I'm going to reiterate. This guy or gal shows up at your house. They can experience a profit and a loss. So if their lawnmower breaks down, they don't come knock on your door and ask for you to do something about it. They go and they fix their lawnmower. So they have an opportunity for profit and loss. That's one thing.

The other thing that they measure, adding a little technical to this, is the degree of permanency. And so you could change, you could choose to, and they could choose to not work for you, and it's likely that they work for several different other companies. But I wanna make something clear here, because that's what people glom onto, and they're like, well, my hygienist works at two other dental practices, so I'm in the clear.

Kiera Dent (15:19.864)

Mm

Kiera Dent (15:36.234)

right.

Kiera Dent (15:43.87)

Right.

Paul Edwards (15:45.206)

And that's not how this test works. It's just not how the test works. So the main thing and the big piece of news, so here's the big reveal for everyone. We, CEDR, have been around for 19 years now. For 19 years, we have been telling people, anyone who tries to classify a hygienist as an independent contractor,

that it is not lawful and that there's a problem the IRS has with it. So it's been like this for 18 years. But like you said, they kind of define, redefine, change rules. In this case, they didn't add or take anything away. But what they did is they took one of the things that was on the list. And I'm just going say it was on it. It was important. It sometimes was used against employers.

and the Department of Labor brought it all the way up and said, if you're only gonna consider the first six points, we want you to know that if the person is doing the work of the business, they cannot be classified as an independent contractor. And so we've always known this determination was there, and the IRS uses that one, so that's one of the ones where the tests are matching up.

So if you're in a general dental practice and you have a hygiene department, then they're doing the work of your practice. Your anesthesiology example was a very good example. if it were a, I mean, I'm just gonna split hairs a little bit here. If it were a pediatric practice whereby there's a lot of anesthesia going on, there's always someone there. That anesthesiologist technically is an employee.

Kiera Dent (17:07.414)

Yes.

Kiera Dent (17:23.072)

Mm -hmm.

Paul Edwards (17:26.442)

They're not an independent contractor. But if you're out in Montana and you're a general dentist, you don't do surgery, and you have a surgeon come through to perform surgery, and an anesthesiologist comes with them or you bring them in as well, those people are not doing the work of your practice, even though we all agree it's all dentistry and it's associated, but hopefully in that description.

Kiera Dent (17:26.804)

Agreed.

Paul Edwards (17:54.442)

I'm able to kind of relay to you guys what the differences are there. But this big reveal is the extent to which the work performed is integral, and it's an integral part of the potential employer's business is the big one. They moved it way to the top. So this means technically, literally, hygienists can't be legally classified as independent contractors.

Kiera Dent (18:10.016)

Mm -hmm.

Paul Edwards (18:21.334)

And it also calls into the thing that we've also been saying for 18 years, that associate doctors who are, it's a general dentist doing general dentistry, that associate doctors, they are not independent contractors either. And that the safest thing to do is to classify them as an employee. And I have lots of other good reasons for making them employees. But again, that's another place where it's common practice. And then Kiera, I'm gonna add one more thing.

Kiera Dent (18:34.23)

Mm

Kiera Dent (18:50.367)

Yeah.

Paul Edwards (18:50.918)

State laws apply here. And so there are several states, California, Oregon, Washington, I could go on and on, who have even more strict rules about these classifications. And we've just seen, gonna, I don't wanna call them all the way out. I'm gonna tell you they're in the Northeast, they're in a state where they have stricter rules. Practice is very successful.

has multiple associates in I think I counted eight and they got audited and they got lit up. mean, yeah.

Kiera Dent (19:24.212)

And that's actually what my follow up was going to be, Paul. Let's say I am a practice and I do get audited and find out that I miss classified. What is, this is how I like to make my decisions. Like how bad is the problem? Is it to be slap on the wrist? Am I going to jail? Like where are we at with this?

Paul Edwards (19:30.272)

Mm -hmm.

Paul Edwards (19:34.516)

Right.

Right.

You are unlikely to go to jail in most states, although there are wage theft laws that can get you charged with misdemeanors, which is the last thing you need as a licensed professional anywhere. the problem is three, I think, I'm going to off top my head, it's threefold. CARE distractions, right? We all have plenty distractions that come in every day just trying to keep the wheels on the bus and everybody happy and the patients happy.

There's plenty of things that enter into our sphere of operating all the time. You've never had a distraction like a Department of Labor investigation where they act like the IRS. They issue a letter which requires you to give up all of your bank records, all of your time records, all of your record records and records of your other record, you know, the distraction to just meet the demand is gonna be brutal.

The next thing you have to do consider is the immediate cost. I'm not gonna even go long term for the cure. The immediate cost is you're gonna just go ahead and just put $30 ,000 in a lawyer's checking account to represent you so that this doesn't spin up and get completely out of control and so that you know what you're facing. And then the next thing is what are you going to have to do once the determination is made and if it's made against you?

Kiera Dent (20:32.811)

Mm -hmm.

Kiera Dent (20:47.276)

Totally.

Paul Edwards (21:02.102)

What will you have to pay in back taxes, penalties, and all those things? So this can easily ramp up and distraction and all of these costs that I've talked about, I don't wanna be hyperbolic here, but this can easily get to $100 ,000 very, very quickly. And so nobody wants that, nobody wants these distractions or these things. So the penalty, the punishment,

Kiera Dent (21:21.045)

Mm -hmm.

Paul Edwards (21:30.966)

really can be fairly brutal. And the last thing, let's just say you've only misclassified one person, right? And she has or he has filed a complaint or somehow it's gotten back to you. You're still in time producing all of those records, answering the complaint, hiring a lawyer. You're still gonna spend 25, 30, $40 ,000 to cure this one instance because again, you're gonna have to get a lawyer.

Kiera Dent (21:34.443)

Mm

Paul Edwards (21:59.542)

So to me, that person would have to work for you for like 30 years to make that money worth it for you. And that's just not what's gonna happen.

Kiera Dent (21:59.82)

for sure.

Kiera Dent (22:08.958)

Absolutely. think them coming in as independent contractors clearly shows that. I think about like, what's my risk to reward? So what I'm doing by having an independent contractor is they're getting paid more with air quotes. They're writing things off, but I'm not having to pay my payroll tax on them per se. Like, I think that's really the only benefit to an employer to do this. Maybe I don't have to have like the exempt, the non -exempt, the hours, but those are things that are pretty easy to solve. So I'm like, okay. And typically I know this is like,

very loose math, Paul. And if you disagree with me, please, I am not offended. Say it is, you're the expert here. I've been told that payroll tax, like a good estimate, is just 10 % of that person's annual. So that's kind of, that's where I'm like easy, because 10 % for me is very easy to move that decimal point and I can figure it out. So if the person's making, let's say they're making 70 ,000 a year, it's $7 ,000 that I'm going to be adding additional in payroll tax to it. To me, is that 7 ,000?

Paul Edwards (22:48.15)

It's not bad, it's good.

Kiera Dent (23:06.876)

worth the hundred thousand, but also I think Paul, there is the emotional ROI on it too. Like to go through that, it might not financially destroy you, but mentally it is, it's something. if, I mean, I've gone through lawsuits and it's something where you get to a point where you just say, I will do whatever to get out of this because the pain and the exhaustion and trying to fight it and trying to win. But then you also don't want to admit to it because

Paul Edwards (23:13.375)

it's brutal.

Paul Edwards (23:27.296)

That's right.

Kiera Dent (23:35.136)

Like opening it up, you open yourself up to them looking back at every single person in your world. And to me, those things are not worth the risk, which is why I wanted you on here today is let's not be afraid, but let's be proactive. But Paul, my question I think is for people who might be freaking out right now of, my gosh, Paul, I've misclassified. What do I do today? Like, do I have to go back and like, like go to the Pope and like redeem myself that way? Like, how do I, how do I fix it moving forward if I have possibly misclassified in the past?

Paul Edwards (23:39.06)

Mm -hmm.

Paul Edwards (23:53.728)

Right.

Paul Edwards (24:04.596)

Well, it's a case by case basis and you open up a little bit of a Pandora's box when you realize that you have to fix something and your questions are very viable. Like, do I have to go back a certain number of years? What do I have to do? You know, one of the things I tell a lot of a lot of our members who are freaking out over something like this is like, let's look at the actual pain point here. Like how much will it cost to correct this? And, know, do we have the money and is it, is it, has it, you know, is it too much?

So it's a case by case basis and what you need to do is kind of stop. You just take a breath and go and talk to someone who knows what they're doing. It's typically at some point this is going to involve an attorney or a very good CPA. It's not your accountant. It's not anybody else. It's not even CEDR. We cannot settle this for you. We can give you all this guidance and everything, but we can't go to bat for you.

So you have to find that resource and they're out there, they're all over the place and you want to mitigate it to the best that you can. You're probably going to self -report it. And look, I've seen it everywhere along the spectrum, Kiera, from the, they've been doing it wrong for three years and they have a hygiene department of seven people to I've only had a hygienist for two years and I misclassified her and she's still with me and I got to fix this. I've seen the whole spectrum and there's two different approaches to that.

Kiera Dent (25:25.312)

Mm

Paul Edwards (25:29.402)

And so if you're freaking out, I'm sorry, but it's better to have the knowledge, not have it at all. You're going to seek out, first thing you're to do is go to your CPA and talk to them. And you're what you're also going to do is if you're out there and you've got a CPA and they know that you're doing this. I don't love that. You know, I don't, I don't love that. That's why I always say when we're talking to talking to professionals, I get them put stuff in writing.

Kiera Dent (25:47.03)

Mm.

Paul Edwards (25:58.418)

I need to be able to rely on the guidance that I'm getting. And then rely on that attorney who is an expert in taxes, who is an expert with the Department of Labor, who knows everything about it, then rely on them or that CPA firm to help get you through it and just go through the process and get it all cleaned up and then fix it going forward.

Kiera Dent (26:18.348)

Absolutely. And I will put it out there. If anybody is looking for good attorneys, I do really, really have an incredible attorney who is right in the line with CEDR. So please reach out. [e-mail]. But really, I agree with you, Paul. I think it's one of those things of, I understand that people weren't doing it. Like don't beat yourself up. You were not intentionally trying to be bad or do things or skirt the law. Like you really were making the best decisions at the time, but today we know better.

Paul Edwards (26:30.24)

Mm

Paul Edwards (26:37.621)

No!

Kiera Dent (26:44.982)

So let's do better. Let's fix it with clean it up. Let's talk to the experts. That way you can feel confident moving forward. But it's like, we know today that this is not okay. And let's make the decisions because you you might skirt by, but every business is going to be sued at some point. And they're also going to be audited at some point. And I would rather have my house clean, as clean as I can get it. And hopefully they find minimal as opposed to hoping that I never get audited.

I really do hope I never get audited, but I like to prepare and plan as if I were to be audited. That way I can sleep at night, I can make these corrections, and that's how I live my life. Paul, I just love this. think there is one thing that we will put out there. We won't exactly say all the pieces, but we were talking earlier about misclassifying of this exempt and non -exempt. I've seen it even within our company. Non -exempt definitions have actually shifted. I had no clue that some of the definitions had shifted from when I last did a thorough research on it.

Paul Edwards (27:31.435)

Mm -hmm.

Paul Edwards (27:38.954)

Mm -hmm.

Kiera Dent (27:40.032)

How often do these change and how do we keep ourselves current other than working with you? Which I think that's the greatest thing, but how do we keep ourselves current? Because exempt and non -exempt is coming up.

Paul Edwards (27:44.916)

Well, well.

Okay, so what you want to do is really if you get into someone's, like if you get into our ecosystem of education, so you don't have to be paying us anything, we are always talking about these things and we are giving that information. We're not withholding and keeping that behind a paywall. you want to join someone like us in our community so you can get updates on this. Ironically, the rules don't change that much for this status, but they are changing right now.

Kiera Dent (28:15.105)

Mm -hmm.

Paul Edwards (28:15.198)

And I do expect that over the next four years, we're gonna see some other changes, but they basically will borrow down into the regulation and they'll make some kind of a change to like a minimum salary amount or some other thing. And that's very simple. This is cut and dry. This is one of those great reasons to have someone like us, because we do understand the rules.

Kiera Dent (28:34.294)

Mm

Paul Edwards (28:41.686)

But yeah, that's another area where people are getting misclassified. And again, this goes back, Kiera, to the first couple of minutes. It's your job as the employer to know these things and then to apply these things in the proper way to your people who you're paying salary or who you're paying as an independent contractor or whatever.

Kiera Dent (28:59.72)

Absolutely. And Paul, I'm so glad that you brought that up because for me as a business owner, I think it's absolutely fun to run a business and to own a business. And I call it my creative playground. Like it's fun, right? But there's also all these pieces that I have to remember are my responsibility. And at the end of the day, it's going to fall on me as the business owner, which is why I am very passionate about finding the experts in the areas that I'm not as strong. I am not a guru on HR. I am not a guru on my bookkeeping. I am not a guru on tax.

Paul Edwards (29:08.576)

I do too. I love it. I love it.

Paul Edwards (29:18.005)

Mm -hmm.

Kiera Dent (29:29.322)

I'm not a guru on the legals. We are in multiple different states in our company. I don't know that. And so having a good board of advisors to make sure that you are there. Like I messaged my CPA because I saw that there's this like weird thing that came up for one of my pieces. And I'm like, I don't even know what this is. Is this a scam? I messaged him and he said, Kiera, don't worry. We already have this. You're either filed or you'll be filed in the next month. And I thought that's the people.

Paul Edwards (29:33.375)

Mm -hmm.

Paul Edwards (29:53.096)

I know what that is.

Kiera Dent (29:54.918)

Tell Paul, I was like, what the heck is this? Is this a scam? It's like DBLI or something weird like that. And I was like, what does that even mean?

Paul Edwards (29:57.45)

Yep.

Paul Edwards (30:02.528)

Yep. Yep. I... Yeah?

Kiera Dent (30:04.524)

So really have the people in your corner. And I think CEDR, just so you guys know what we're referring to of this exempt and non -exempt, that salary versus hourly, definitely reach out to CEDR because it does impact a lot of office managers. So doctors, I would really encourage you just to reach out. Paul is more than happy to share and help you guys. I intentionally asked him not to put it on the podcast because I did not want to put any doctors in an uncomfortable spot knowing that team members do listen to this podcast.

And I wanted doctors, you to know the information, therefore you could actually make the decisions best for your practice rather than exposing you. So that's why we're not trying to hold back information, but I know our audience. And so I said, Paul, let's let them know, let's have them reach out to you. That way doctors, you can make sure that you're getting the information and make the best decision for your practice.

Paul Edwards (30:50.858)

Yeah, get into our ecosystem and you're going to see the education pop up here in about three weeks, which isn't enough time for you to understand what the rules and how the rules are changing. I'm also on my podcast. I'm going to cover this at least once before the end of the year. So I'm going to spend some time on my podcast doing that.

Kiera Dent (31:07.114)

Which is amazing. So Paul, you really went through the gamut with us today of going from what is this non -compete and how's it going to impact us to now the 1099s and what that really is and how we classify, misclassify and what we do to now talking about this exempt, non -exempt. And really, I think more than anything, I feel education is power. Yes, sometimes I don't like the nuances. Sometimes it feels annoying, but I'd rather be annoyed and fix it.

than be uneducated and not know and then be burned through an audit. So Paul, I love what you guys do. I love the care that you have. I love the passion that you have. People like you are who get me excited because I don't like HR. I would rather like never think about HR. It's the yuckiest part of a business. So the fact that there's great people like you out there, I just want to say thank you.

Paul Edwards (31:46.484)

out

Yeah, yeah, is. We're gonna put that on our, we're putting that on our website. It's the yuckiest part of your business. Let us help you with that. Yeah, we're the solution you didn't know you needed. That's gonna be our, yeah.

Kiera Dent (31:59.697)

It is. Exactly. Exactly. So Paul, once again, thank you for being here. And for those who are like obviously are going to reach out again, please, if you will just share how they can connect with you, get into your ecosystem, learn. And if they're interested in becoming a client as well, how they can connect with you that way.

Paul Edwards (32:17.566)

Okay, so two different ways to connect with us and with me personally. The first way is to go to our site cedrsolutions and just sign up on one of the forums and join our community and get the free education. Of course, give us a call if you're looking for services. The other way is just subscribe to my podcast. It's called What the Hell Just Happened? You can find it on all the platforms. What the hell just happened here is some rules changed and we discussed it with Kiera.

Go subscribe to my podcast and weekly we put out stuff and we talk about HR related things and some other fun stuff and Kiera. Well, this is definitely a subject that I'm going to cover before the end of the year.

Kiera Dent (32:58.666)

Amazing. All of you get prepared. There's no reason to be fearful. There's great resources out there. Yes, this is, in my opinion, success has two parts of it. There is the suck part of success. It's literally the first three letters of success. This is the portion that we have to do as business owners and know. But I think Paul, you guys do an amazing job of making it not scary, very easy. You guys are incredible at education. So all of you get prepared, go connect with them, reach out, listen to their podcast.

Truly incredible, incredible information and Paul, thanks for being here today with me. Of course, and thank all of you for listening and I'll catch you next time on the Dental A Team Podcast.

Paul Edwards (33:31.968)

Kiera, thank you so much.