Pay Transparency + the Power of Preventive Strategies: Episode 2 — Healthcare Compliance Crossroads

Transcript

Laura Mitchell
Principal, Denver

Hello, and happy New Year, everyone. I am Laura Mitchell, and I am co-leader of our Pay Equity Group here at Jackson Lewis. I'm thrilled to be back for another episode of our pay transparency series. Today, I am joined by two of my favorite people, Sarah Skubas and Stephanie Peet, who co-lead our Healthcare Group. Today, we're going to talk to them about the trends, the pitfalls, and the challenges that our clients in the healthcare industry are seeing. 

Sarah, first, for those who are listening who aren't familiar with our Healthcare Group, do you want to tell us a little bit about what it is and what you all do for our Jackson Lewis clients?

Sarah Skubas
Principal, Hartford

Great to be with you, Laura and you too, Stephanie, as always. Laura, for the record, you are one of my favorite people as well. We do a lot of different things within the Healthcare Group. Jackson Lewis has a lot of industry groups that really pride themselves on understanding our clients' industries, so we can provide them with benchmarking, updated trends, and really understand their business. Healthcare is no different. 

Stephanie and I, along with a very deep bench at Jackson Lewis, really focus on partnering with our healthcare clients on a variety of issues. We really understand the trends and unique challenges that face the industry. That may be anything from physician organizing trends in the labor space to litigating cases that implicate a crossover we see when employed physicians have issues, but also medical staff privilege issues arise. We don't just litigate cases in the healthcare space. We really partner with clients to understand, both from a preventative and an advocacy piece, how we can help minimize all the challenges they're facing.

Healthcare is the largest employer. It's not going anywhere. We understand how important it is to be there to support clients at every step. It's a real honor for Stephanie and me to co-lead the group and partner with the rest of our colleagues across the firm.

Mitchell

Fantastic. Today, we're talking about the wave of pay transparency laws rolling out across the country. In our last episode, I talked with Chris and Stacey generally about the challenges facing employers navigating this patchwork of laws. Given your insight into this industry and the type of employers in this space, what are you seeing as the biggest or most common challenges for organizations within the healthcare industry? 

Stephanie, I know we've talked about some things that you've seen. Do you want to share those with us?

Stephanie Peet
Principal, Philadelphia

Thanks for having us, Laura. We appreciate it. Happy New Year, everyone. 

There are a lot of complexities. One of the biggest ones that we're seeing, and Sarah and I talk about this a lot, is acquisitions. Acquisitions are probably more commonplace in the healthcare industry than in other industries. While there are a lot of pros with acquisitions, obviously, it creates a lot of complexity. One of the complexities is compliance with pay transparency.

If you're acquiring other practices and other healthcare institutions, it is tricky to make sure that you are still compliant with the pay transparency laws in the various states across the country for a variety of reasons. 

The first being, it's just hard to identify the pay disparities between the acquiring company and the company being acquired. You can have the same job position, but it could have different job titles. It’s really tricky to harmonize those hundreds of job titles and try to make a unified compensation framework. Just figuring out apples-to-apples is going to be the first complexity that employers have to deal with when they are acquiring different companies. 

Another difficulty with this is reconciling the salary ban structures. You can have one company that uses opaque pay practices, but another that publishes its ranges. Trying to mold them into one structure is difficult.

Another hurdle that we have seen is the inconsistencies that are revealed. You learn this when you're merging that clinical pay. For example, during COVID is a good example, nurses were hired during shortages. As a result, they were paid a premium pay. They may be doing the same job, but their pay is going to look higher than that of other nurses who are hired at different points in time. That can throw off pay transparency. 

Another thing that we see in the healthcare space and don't usually see in other industries is those different pay structures. The on-call pay, hazard pay, and specific shift premium pay can really throw a wrench into compliance with those pay transparency laws. 

One other thing I'm just going to throw out there, more of an internal issue, is inequity claims in pay plans that are disclosed amongst your long-tenured staff. Now all of a sudden, they're going to see things and realize the way that people are getting paid, that perhaps are newer to the organization or being acquired might be making as much, if not maybe a little bit more than them. This can really create issues with team morale and productivity.

It's not easy complying with these pay transparency laws, certainly in these acquisition environments.

Mitchell

That really just highlights how the pay transparency requirements and the disclosures on your job postings of your pay bands really do tie into pay equity concerns. If you're not paying individuals the same who are doing similar jobs, that's going to come out when you have to post on a job requisition or opening – what that pay is going to be. Then, that's going to be seen by your incumbent employees, and is going to raise all of these issues. You really just highlighted for us these complexities and the challenges of pay equity practices really coming to light and being highlighted by the pay transparency requirements and obligations from a compliance standpoint. 

I can also see how, with the acquisitions, just the administration of the pay transparency obligations, like who's responsible for the job postings, is the information on the posting for Colorado compliant for acquisition company C? Who is actually managing this? I can imagine for healthcare clients, just having really good compliance hygiene practice is essential when you're taking on all of these different organizations. 

Sarah, what are some other things that come to mind in the healthcare space? For me, when I think of healthcare, I think of hospitals, brick and mortar, and institutions where you drive to get seen by a practitioner. However, we all know in this changing world that remote work exists now, telehealth, and all of these other aspects that are coming into play. How does that fit in with pay transparency and pay equity for our healthcare clients?

Skubas

It's almost like the flip side of what Stephanie's talking about. If you're a larger organization and you're acquiring our smaller healthcare clients, they are not immune from these challenges for the reason you said/ Healthcare is one of those industries that was, we'll call it newer to the game of remote work for some of our smaller healthcare networks, hospitals, skilled nursing, and other healthcare clients where they were used to just be brick and mortar. They operated and employed people in one, two, maybe three neighboring states at most. Then, COVID hit, and like the rest of the world, they realized that they could tap much-needed talent in other states. We're seeing that a lot in the space of coding. A lot of what we'll call single-state employers became 50-state employers unintentionally because they needed the talent pool that they could only hire in other states. It opened up a world that they didn't really think about before. You're seeing what we'll call smaller healthcare employers now becoming multi-state employers. 

While pay equity and pay transparency are just one of the multitude of areas of compliance that they're grappling with when you become a multi-state employer, pay transparency laws and the pay equity laws do really vary and change so much that it becomes really hard from a compliance standpoint. We're seeing a lot of healthcare leaders saying, I understand it's hard, but go figure it out since we need to tap into this talent pool. Not just coders or IT, but even for telehealth. I'm seeing clients who may be brick-and-mortar on the East Coast hiring radiologists on the West Coast because they want somebody to read scans later in the evening to make themselves more marketable. That obviously triggers a host of various pay transparency obligations and the notices in the posting, but also pay equity. What you're paying a radiologist in a rural healthcare center is going to be wildly different than what the market might be in a more urban or West Coast environment. It’s a real challenge for those with whom we partner a lot in legal and human resources to understand. Sometimes the leadership says, we've got to hire these people, go figure it out. That's been a real challenge, even though we're now five or six years out.

We're still seeing compliance obligations, particularly for some of those smaller organizations that aren't used to being a multi-state employer. It can pose a real big challenge. Being mindful of where you are posting for jobs? Where are you going to be an employer? Have you thought critically about what those obligations are, whether it be a notice posting on Indeed, or the offer letters? All of those compliance issues are still new for the industry, and something we're going to continue to help clients navigate through.

Peet

I just want to add on to the pay equity issue that we just raised because it is newer in the healthcare space, but it is real. Healthcare employers are struggling with this influx of remote clinical roles that we didn't see before. The telehealth, the remote coders, the case managers, et cetera. It's about how you pay them. Do you pay them based on job value or based on where they live? We are finding that some healthcare employers are saying, let's use a national rate because that's more fair. Others are saying, no, let's use that geo differential, and more of a local rate. It raises the pay equity concerns that you were just talking about, which is that you can have two people with identical responsibilities, being paid totally different, just because of zip code. 

I've been seeing a trend towards the national pay scale for more of the remote eligible roles. I don't know if you're seeing the same thing, but I certainly think that as 2026 and 2027 roll around and even into the future, we're going to see this telehealth expansion continue. It's probably going to disrupt that old model of geographic-based pay because of the inequity that a lot of people are feeling and discussing.

Skubas

I totally agree.

Mitchell

We talk a lot on our podcasts about the pay equity services that we have at JL and how we can actually get in and help organizations evaluate pay from an analytical standpoint to identify where you may have those disparities between similarly situated individuals using statistics and regressions. 

In the Healthcare Group, as you guys are monitoring trends and you're seeing these new developments, what resources and what do you put out or publish that can help clients navigate and keep their finger on the pulse of what's going on, not just in the pay equity and pay transparency spaces, but for healthcare clients in general?

Peet

Sarah, I know you're going to talk about a lot of our resources that we offer, so I want to just focus on a theme that we're seeing in the healthcare space and how we can help healthcare employers deal with that. It's one word – disgruntlement. What we're seeing and hearing among healthcare providers, doctors, and nurses is that people are upset. They feel overworked, underpaid, lacking support and resources, are experiencing a hostile work environment, you name it. 

How does that play into employment law? You see a myriad of issues that result from this disgruntlement. We're seeing increases in requests for ADA. Doctors, nurses, and other healthcare providers are requesting accommodations more than they have before, in large part due to these mental health issues. We're seeing increased requests for FMLA, both continuous and intermittent. The biggest one that we're seeing is unionization attempts by doctors and by nurses, and it's something that we never even thought would happen. We're actually seeing that happen now, and it's because they just feel that there's a lack of help and a lack of resources within their own employment. The other issue we're seeing is workplace safety. 

We have attorneys who can help you in the healthcare space deal with all of these issues, the labor, the workplace safety, and the leave issues. We're here to help, but they all come from that common theme that we're seeing in healthcare, which is disgruntlement.

Skubas

Yeah, and we have been keeping pace with an industry concern series where we touch upon all of these issues, specific to the healthcare industry. We do webinars and podcasts, but you name the topic, we've probably talked about it, and we're continuing to develop new content where clients can go check it out and listen to it on the way to work.

To echo Stephanie, we were used to physicians not suing other than for a breach of contract, and those days are gone. Physicians are a whole new avenue of risk for our healthcare clients. Particularly when we build in things like looking at residency programs, and the ACGME is the accrediting oversight board nationally that regulates all of the residency programs at hospitals. We're seeing a really informed residency workforce. Those residents, even though they have a lot of protections that regular employees don't have under existing statutes, state and federal, they get a lot of extra protections because of what the ACGME requires. Even in that space, we're seeing the organizing that Stephanie was talking about and a really vocal and active workforce. Long gone are the days when doctors put up with terrible working hours and were quiet about it. Those days are gone. All healthcare employers really need to be paying attention to these trends and keeping their workforce as happy as possible in a preventative way. It really goes a long way.

Mitchell

There's definitely a lot to think about and take into consideration in this healthcare space, and pay transparency and pay equity are just the tipping point, it sounds like, for a lot of other issues that are coming up and new trends. Thank you, Sarah and Stephanie, for chatting with me today about all of these. It's always a pleasure to spend time with you, and I hope everyone has a wonderful rest of their day.