Employed physicians: will your contract protect you from COVID-19 budget cuts?

With hospitals and medical practices being battered financially by COVID-19, some are already making cuts that affect physicians. It’s a good time for employed physicians to review their employment contracts — possibly with the help of an attorney — to examine “force majeure” clauses and other provisions that might allow employers to dock pay, furlough physicians, or even terminate employment without cause. Contracts may also spell out what recourse physicians have to challenge those decisions.

There are specific questions doctors should ask if their employers attempt to modify their contracts and request that they take a pay cut (e.g., “How long will this last?”), defer some salary (e.g., “Will this be repaid over several months or in a lump sum?”), or accept reduced hours (e.g., “How will this affect my benefits?”). Furlough, or temporary unpaid leave, brings up its own set of questions, such as, “Can I use paid time off or vacation hours to continue drawing income during this time?”

Various contract provisions may also affect terminations. Employers may be obligated to give a certain amount of notice prior to termination, and they may be required to give reasons for termination in writing and provide physicians an opportunity to respond. Physicians who are terminated will want to review their contracts to clarify whether the practice will cover malpractice insurance tail coverage and whether any non-compete clauses may affect their job search.

Physicians who lose their jobs should take note of the expansion of unemployment insurance under federal COVID-19 legislation.

Adapted from the AAFP resource COVID-19: Impacts to Physician Employment.

Posted on May 15, 2020 by FPM Editors