- employments laws treat employees and independent contractors differently

- under common law rules, relationship between worker and employer must be examined

- degree of independence and control the worker is able to exert must be assessed

- employees are those that have paid salary/wages and are under some form of supervision

- analyze these 3 factors to determine whether an individual is an employee or independent contractor

1. degree of behavioral control

2. degree of financial control

3. realtionship between the parties

- receive a sum of money for the performance of discrete service or completion of projects

- may decide without direct supervision how work is performed

- protections afforded to employees will be available to contractors if they become an employee

--> withold federal, state and local taxes

--> federal protections apply as well

- title VII of the civil rights act

- age discrimination in employment- 40 yo

- american disabilities act amendents act

- fair labor standards act- paid overtime if over 40 hours

- family and medical leave act- 12 months unpaid leave for birth, adoption, illness or armed forces and still keep job

- equal pay act- men and women

- cannot discriminate based on race, color of skin, religion, national origin, pregnancy or gender

- does NOT cover- sexual orientation, parent status or political affiliation

- cannot retailiate if candidate files a complaint

- critical point in hiring process

- asses education, work experience, intelligence, motivation, personal qualities and ability to communicate

- do not ask about personal life

- control curiousity to avoid lawsuits if legally protected characteristics are asked about

- gender/sex

- age

- religion

- national origin

- disabilities

- marital status

- sexual orientation

- ethnicity

- parent status or intention

- use due diligence to review the backgrounds of finalists before extending an offer

- reference checks with current or former employers

- educational degree verification- transcripts, degree vs. certificate

- criminal record checks- background

- drug tests- must be aware and fully disclose

- new trends are checking credit and social media

- reveal potential employees shortcomings including dishonesty and performance issues to prevent future problems

- screenings must comply with state and federal laws related to fair credit reporting and privacy

- ex) background checks by fair credit reporting act

- manager may check public records

- outside company or investigator may conduct an intensive records review

- organizations may require prospective employees to submit fingerprinting to use federal and state databases to match criminal records

- manager must decide whether the nature, timing and seriousness of an offense is job-related and would preclude individual from employment

- should consider whether hiring someone with a criminal record would adversely affect the workplace, patient safety or how employee performs assigned duties

- consider the event and severity

- national practitioner data bank

- healthcare integrity and protection data bank

- drug enforcement administration (DEA)

** not open to public **

** can see malpractice claims, lawsuits, crimes, pending civil judgments, state licensing actions, medicare/medicaid denial, sexual harassment **

- some organizations may conduct pre-employment drug testing or medical exams

- must be job related

- must be required of all employees

- only permitted after an employer makes a real employment offer and conducts all other forms or pre-employment screening

- cannot mandate until job has been offered

- may return unreliable information

- may violate equal opportunity mandates

- should be used with caution

- constitute a valid employment contract

- agreement must occur b/w the offeror/employer and offeree/potential employee

- one party makes an offer and the other accepts

- other party can counter-offer then no contract exists until parties agree on all terms

- when both parties agree on employment terms, final agreement should be in writing

- employment agreements may be made for an established time period or for at will employment

- most employment contracts are at will meaning they may be terminated by either party at any time for any reason that does not violate public policy

- at term- more specific termination reasons

- terms of the agreement

- policy manual governing the employment relationship- also given a manual

- state law

- public policy considerations

- required for contracts that extend beyond one year

- agreement must be in writing

- contain noncompete or restricted clauses/covenants

- prevent employee from opening a competing practice nearby for a specified period of time

- courts do not look favorably on such clauses and require them to be reasonable in duration and geographic location (scope)

- may not unnecessarily impede departing employees ability to earn a living

- an employer must provide adequte consideration/compensation to the employee

- many organizations are substituting liquidated damages provisions for noncompete clauses

- extra compensation to keep employee within company and working for competitors (ex. 401K)

- establishes minimum wage, overtime pay, record-keeping and youth employment standards affecting employees

- requires all employees be paid at fed minimal wage

- distinguishes between exempt and nonexempt employees

- requires nonexempt employees be provided additional compensation when they work more than 40 hr/wk

- executive

- administrative

- professional- learned or creative

- computer

- outside sales employee

- highly compensated employee

- race, religion, color, creed, age, national origin, ancestry, sex, marital status, veteran status, disability, sexual orientation, pregnancy or any other basis made unlawful by law, regulation or ordinance

- form of employment discrimination

- quid pro quo- exchange of incentive like sexual favors for promotion

- hostile environment- plantiff does not have to prove psychological injury to prove hostile environment harassement, depends on totality of the circumstances

- victim cannot recover damages under federal law unless conduct is severe or pervasive such that it creates an objectively hostile or abusive work environment

- fact-finder (judge/jury) would have to conclude that a reasonable person would find the conduct hostile or abusive

- if alleged victime does not perceive environment to be abusive, conduct cannot constitute a basis for successful discrimination lawsuit

- where a tangible employment action like termination is related to sexual harassment, employer is liable for quid pro quo harassment regardless of whether employer knew harassment occured to took preventive measures to avoid it

- cannot terminate as retaliation

- with no action, employer can avoid liability by raising an affirmative defense if it can prove they took reasonable steps to prevent/promptly correct the harassment and the victim failed to take advantage of preventive/corective procedures to avoid harm

- have a program in place that notifies employees of the process for accepting and investigating sexual harassment complaints- ex) hotline

- routinely train employees and managers to ensure that sexual harassment does not become part of the workplace- annual training

- promise appropriate, swift, remedial action in cases where sexual harassment took place

- can be harassed by non-supervisory

- ex- individual invited to workplace by employer or pharmacy's vendor

- in these cases employer may still be held liable for harassment as employer has obligation to protect employees from unlawful harassment

- federal educational rights and privacy act

- affects pharmacist who train students

- requires student education records be accurate and bars the release of student information unless authorized by the student (student disclosure)

- health insurance portability and accountability act

- protects personal health information held by covered entities

- permits disclosure of such information as needed for patient care and other important purposes

- applies when operating health clinic or wellness plan available to employees

- providing a self-insured health plan for employees

- acting as an administrator for its company health plan

- all pharmacies subject relative to customers and patients- train employees

- ensure confidentiality, integrity, and availability of electronic health information that they produce, maintain or transmit

- protect the data against reasonably anticipated threats to security and integrity

- safeguard against impermissible use or disclosure

- ensure that employees comply with the security rule

- employers should take immediate steps to mitigate or correct the violation

- HITECH act allows state attorneys general to bring civil actions for HIPAA violations

- workers comp insurance carriers, physicians and other participants in workers compensation system can share protected health information if injured at work

- HIPAA does not require employee names to be removed from OSHA 300 log

- OSHA- hazard communication standard, occupational exposure to bloodborne pathogens standard

- all states and DC have own workers comp laws and systems

- under workers comp, employers are required to obtain insurance coerage that provides benefits to employees who suffer work-related injuries and illnesses

- workers compensation is a no-fault program and provides medical treatment, wage replacement and disability compensation

- giving employees timely and accurate performance feedback is essential to maintain a productive workplace- ongoing review

- if employees consistently fail to perform as expected, may be necessary to sever relationship

- wrongful termination lawsuit may result

- documented performance based on measurable, legally defensible criteria can help withstand such lawsuits

- an at will employee may be terminated without cause and any form of process as long as termination is not unlawful

- employee who fails to meet performance expectations may be terminated for cause based on terms of the employment agreement

- determining what is cause can be complicated

- illegal to terminate pharmacists or other employees for refusing to violate a state law or public policy contained in a regulatory agency's rules

- courts have confronted cases in which pharmacists, based on claims of conscience, refuse to dispense contraceptives or other meds

- whether an employers decision to discipline employees for refusing to carry out duites for this reason will be actionable will depend on law of the jurisdiction

- cannot terminate if the refuse to participate in fraudulence- alternative options

- as salary increases, money management becomes more complex

- important to minimize bad debt and optimize/protect financial resources

- spending too much without having adequate resources to cover expenses can lead to financial difficulties

- individuals should consider the purpose, need and future consequences when purchasing items (need vs. want)

- avoid credit- leads to debt

- know state "usury laws"- max amt for loans

- remember depreciation, interest rates and taxes

- spending more than you earn

- borrowing needlessly to maintain lifestyle

- depending on credit cards

- refinancing and using loans to pay off others

- ignoring warning signs of problems

- making minimum payments on loans/credit cards

- lacking monetary goals or not reaching them

- having large number of credit cards

- using credit cards to make minimum balance payments

- make minumum payments only

- turned down for loan or credit card

- short term loans on regular basis

- credit card for basic needs with no cash

- financing vehicle for over 5 years

- little savings/emergency fund

- depend on friends/family as bail

- putting off saving for retirement

- developing a detailed plan for expenses/expenditures

- used to help identify where money is spent and set priorities on spending and wealth building

- can facilitate financial discipline

- expenses should not exceed outcome

- avoid temptation areas

- stick to a list to avoid impulse purchases

- recognize effors with affordable reward

- get a budget buddy for moral support

- charge purchases that you can pay back in full

- use debit cards- easier tracking and pay as you go

- ask questions about potential purchases

- consider long term goals

- due to combination of factors like disciplin, knowledge, skills and luck

- pursue education

- recognize hard work and self discipline

- accumulate wealth

- borrow money only when necessary

- balance career and personal life

- all individuals should develop a financial plan early in career

- assessment conducted based on current situation along with realistic evaluaiton of future potential

- saving for emergency reserve fund

- paying off debts

- saving for retirement

- saving for down payment on a house- 10% down

- saving for childs college education

**higher the risk, higher interest rate**

**student loans must be paid off still if bankrupt**

- make payments to yourself first

- identify needs vs. wants to narrow expenditures and savings goals

- opportunity cost of each purchase

- contract between borrower and lender

- borrower receives a benefit and agrees to repay the lender at a future date

- interest rate may increase depending on the risk of the borrower as assessed by the lender

- want high credit score- better credit, lower risk

- lenders assessment of a borrowers ability to repay debt

- based on FICO score- used by lenders to rate potential risk of borrowers

- ranges from 300-850

- based on types of credit in use, payment hx, length of credit hx, amounts owed and new credit

- maintained on all borrowers

- monitor monthly to yearly due to identity theft

- check for appropriate management

- lower interest rates and fees are generally best

- pay minimum balance at least before monthly due date or whole balance ideally to maintain score/report

- fundamental of finance and way to growth wealth

- date of receipt of money is critical in determining how much growth is possible

- contributions may be made on a one-time basis or regular basis

- dollar today is worth more than in the future

- receiving a fixed amount sooner is an advantage to begin earning interest

- represents an expressed charge for the use of money

- annual percentage rate (APR) applied to amount borrowed to determine interest expense

- on all loans

- simple: interest computed on the prinicpal and may cover one or more periods

- agreement between two parties where a lender agrees to lend an amount to the borrower to use over a specified time period and at a stated interest rate

- borrower agrees to pay back the loan in a single payment or with a series of payments

- include a portion of the principal amount plus interest expense

- takes simple interest a step further by applying interest over more than one time period

- use simple interest formula to calculate for first period

- 2nd and 3rd periods, apply interest rate to original principal and interest earned in first/subsequent periods

- more frequent

- longer you have to invest, greater effect of compounding on principal balance

- effected by time or fixed rate/term (adjustable rate mortgage)

- amount of money a principal amount invested today will grow to be at some future/maturity date

- future value will always be greater than current value due to interest rate

- difference b/w current and future value depends on number of time periods and interest rate

- equivalent value in today's dollars of a single payment or stream of payments to be received in the future after considering the effect of the interest (or return on investment)

- AKA discount rate- interest rate that an investment is earning for the investor- can be evaluated against other investment options

- chance the actual return on investment will be different than expected- includes possibility of losing or not gaining in value

- inflation is general rise in prices of goods over time

--> rate if expressed as %

--> interest rate should be higher than inflation for growth

- risk tolerance- degree of risk/loss an investor can accept in any investment- rate of return higher on volatile investments (aggressive, moderate or conservative)

- certificates of deposity, mutual funds, money market funds, real estate, stocks and bonds

- consider short/long term goals

- balancing current cash needs and savings for future

- liquid assets- converted to cash easily like cash, checking account, savingings account, money market funds

- most liquid investment

- little risk in loss of cash value- low rate of return

- any investment portfolios should include cash or cash equivalents

- short term investments that are convertible to a known cash amount or are close to maturity date

- certificate which represents the shareholders ownership in a corporation

- gives one privilege to vote in matters of operation

- value determined by marketplace and may flucuate daily

- gains/losses determined by price received when you sell the stock compared at price at which you purchased

- determines expected rate of return on investments

- actual return on an investment may be different from expected return- no gain or loss in value

- risk tolerance is the degree of risk (potential loss) an investor can accept in any investment

- more risk = greater return (younger), less risky = lower return

- classified as aggressive, moderate, conservative, growth, income or growth with income

- general rise in prices of goods and services over time expressed as a percentage

- buying power of the US dollar

- investors need to earn an interest rate higher than inflation to experience growth in money

- calculated monthly using consumer index price

- cash, savings account, certificate of deposit, money market funds (cash equivalent)

- bonds

- real estate

- stocks/mutual funds

**importance of making relationships with many professionals **

- short-term and long-term goal consideration

- balancing current cash needs or future savings

- liquidity level of investment/asset

- risk tolerance

- cash is most liquid asset

- little risk in loss of cash value so low rate of return

- any investment portfolio should include cash or cash equivalents

- certificate represents shareholders ownership in corporation

- value determined by marketplace

- fluctuate daily

- gain/losses = purchase price - sale price

- consider long term vs. short term gain/loss- long-term are taxed at lower rate

- common: voting rights, market appreciation, eligible for dividends

- preferred: no voting rights, guarantee regular dividend payment, do not fluctuate with market, value fluctuates with interest rates due to guaranteed dividend payment

- common = more risky, preferred = stable

- earning income and growth potential

- growth: increased revenue and earnings

- income: steady dividends

- value: undervalued stock with growth potential

- current market value- market price per share x # of outstanding shares

- small cap: high potential for growth but high risk (no dividend or high debt)

- mid cap: mid growth, earnings and dividends

- large cap: large pile of cash (retained earnings) or large amount of equipment, less risky, long hx of paying dividends

- issued/sold by a company or municipality to raise money/capital

- no ownership rights

- interest paid at stated rate

- bonds are traded on market with value adjusted to market price with a discount or premium

- market price based on investor perceptions of companys ability to pay det and current interest rates

- market fluctuates less on bond prices so less risky but more than cash equivalent

1. dollar cost averaging

2. portfolio diversification- invest in variety of options and classes to spread the risk inherent in any one investment

--> asset allocation- returns do not move together in response to market event

--> mutual funds

--> choose variety of companies to invest in

- net worth = assets - liabilities

- protection via insurance- right to compensation for a future loss in exchange for a periodic payment

- ex) health, professional, disability, longterm care, life, property

- know what is part of package with company- some might be limited amount or duration

 **disability- pre-tax money is taxed later, post-tax is not taxable when benefits received**

- language of business

- used to set goals and evaluate performance

- allows managers to evaluate effectiveness of company and take appropriate action

- develop formulaties, purchas equipment and manage staff/payroll

- internal: owners, managers, other employees

- external: current shareholders/owners, prospective shareholders/owners/investors and lenders/banks

- recording/bookkeeping, analysis, and reporting financial transactions of an entity

- system of for providing financial information

- auditing- correct mistakes

- formalized system of recording financial history of entity or organization

- looks backward

- report history of organization to itnerested people through reports

- financial reports- $$, quarterly, annual

- used by external people mainly

- provides financial information to help make improved decisions going forward

- used by internal people to make management decisions

- used to maximize future profits, health care quality, and payroll/benefits

- used to minimize morbidity or mortality

- assets - liabilities = net worth

- owners equity (sole prop), shareholders equity, book value (corp)

- assets- something of worth owned by entity

- liabilities- obligations owed to those outside the entity

- net worth- portion of assets available to ownders after liabilities are paid

- cash: revenue and expenses are recorded in the period in which they are received or expended in cash

- accrual: revenue and expenses are recorded i nthe period in which they are essentially earned or recieved, regardless whether cash is received or dispersed

--> receipts and expenses are matched

- recognized set of accounting procedures, standards and principles (standardized assumptions/labels)

- provides reliability and relevant information

- allows anyone to compare companies

- common language

all expenses directly associated with production of revenue must be reported in same period on the income statement

- match income with expenses for profit

- accounting entity

- sole proprietorship, corporation (profit/nonprofit), partnership

- key- what happens to profits

- assumption is that want to exist and succeed to make profit

- ongoing concern to thrive and survive

- look at short and longterm when making decisions

- keep records for beginning to make longterm decisions

- determine fiscal year AKA accounting period

- end of revenue cycle generally governs

- often monthly and annually

- record economic transactions based upon initial cost not current value

- ensures objectivity

- long-term assets

- exclude personal feelings

- express in cash or dollar

- delineate currency used

- based mainly on receipts/invoices

- objective evidence

- reasonable person standard- eliminate bias

- if you dont have objective data, rule on the side of being conservative

- inventory, fixtures, allocation of purchase price

- once you adapt a methodology in reporting, stick with it

- consistency for future reporting

- allows/provides comfort in comparisons

- if change, let reader know and why

- looks to significance of error

- financial statements are never perfect

- will it affect fairness of statements?

- will it affect financial users judgment?

- revenue must be earned

- when process of probiding goods/services is complete

- both business and customer agree is complete/earned

- actual cash collection is not required when recording revenues-

- can be in accounts receivable***

- iff account receivable collection is uncertain, must disclose reason (bad debt, uncollectable)

- if there is something that is not covered by an established rule that would inhibit the fairness of the information provided, you must disclose

- catchall rule

- relates to conservatism principle

- statement of financial position

- assets - liabilites = net worth

- what/how much do we have and what/how much do we owe

- picture of entity at a particular point in time/date

- typically done quarterly and annually

- from inception to cumulative balance

- profit/loss statement

- how much did we make

- reflects company's revenues - inflows of cash/assets or reduction of liabilities AND expenses - outflows of cash/assets or incurring liabilities

- over a specific period of time (ex. monthly)

- accounts are closed out at the end of each period

- statement of retained earnings

- reflext activities that relate to owndership and results of operations during specific operating periods

- dividends paid

- increase in retained earnings

- where did all our cash come from and where did it go

- reflect the sources/inflows and uses/outflows of cash for a specific period

- operating, investing (purchasing of equipment) or financing (debt incurred)