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How California Employers Can Protect Themselves from Wage and Hour Claims

California has some of the most comprehensive wage and hour regulations in the entire country. All businesses and organizations that operate in California must comply with both federal and state wage and hour laws. A proactive approach is one of the keys to preventing claims. Here, our Fremont employment lawyer for preventing claims highlights best practices companies and organizations can use to protect themselves against wage and hour liability.

What Employers Should Know About Wage and Hour Laws in California

Wage and hour laws regulate worker hours, pay, and benefits. A key thing for employers in the Bay Area to know is that California’s wage and hour laws are among the most employee-protective in the country. Employers must comply with the federal Fair Labor Standards Act (FLSA), the California Labor Code, and all applicable Industrial Welfare Commission (IWC) Wage Orders. Here are some of the key requirements:

Employers must meet the state or local minimum wage
Employers must provide required meal and rest breaks
Employers must provide proper overtime compensation

California’s Labor Commissioner (DLSE) actively enforces wage and hour rules. Employees can file administrative wage claims or pursue civil actions for unpaid wages, missed breaks, or overtime violations. The state’s Private Attorneys General Act (PAGA) empowers employees to bring wage and hour claims against employers on behalf of similarly situated workers. Employers found in violation could face liability for unpaid wages, liquidated damages, penalties, and attorney’s fees

Best Practices for Employers to Prevent Wage and Hour Claims

1. Maintain Accurate Time-Keeping Systems

Time-keeping matters. You should use reliable, verifiable systems to record all hours worked, including start and end times, meal breaks, and off-the-clock work. Even small violations of time-keeping regulations can lead to serious liability.

2. Review Worker Classifications

Workers in California must be properly classified. Employers should confirm that exempt employees meet both the salary basis and duties tests. A company that misclassifies a worker, including improperly classifying them as an independent contractor, could face a wage and hour claim.

3. Implement Comprehensive Written Policies

Many employers in California can benefit from comprehensive written wage and hour policies. You should provide clear, accessible policies regarding overtime authorization, breaks, and other relevant procedures.

4. Train Supervisors and Managers

Proactive training of supervisory employees can help. Supervisors, managers, and the HR department (if there is one) must understand how wage and hour violations occur.

5. Conduct Regular Audits of Wage and Hour Policies

Finally, employers in California can prevent wage and hour claims by conducting regular, comprehensive audits of their wage and hour policies. An employer lawyer for employers can help.

Speak to Our Fremont Employment Lawyer for Employers today

Lynnette Ariathurai is a California business lawyer with extensive experience representing employers. If you have any questions or concerns about how to prevent wage and hour claims, please do not hesitate to contact us today for a fully confidential consultation. With an office in Fremont, we provide legal services to employers throughout the San Francisco Bay Area.

California wage and hour regulations, employer wage and hour policies, worker classification

Employer Guide – Protection and Guidelines

Employment law is complicated. California has among the most comprehensive, worker-friendly employment laws in the entire country. Employers must be in full compliance with the law. A proactive approach to labor and employment compliance can help businesses and organizations reduce their risk of liability. Lynnette Ariathurai is a solutions-focused California employment lawyer. If you have any questions about employment protections or employment guidelines, please do not hesitate to contact us for a fully private, no obligation consultation.

We Provide Legal Protection to Employers in California

Employer Representation

We are committed to representing employers in employment law matters. Our firm can help you develop workplace policies, employee handbooks, required training, and employment contracts to reduce your risk of legal/liability exposure. We also defend employers against federal and state claims, including discrimination, harassment, wage and hour disputes, and administrative complaints. Employers can rely on our proactive legal counsel.

Preventing Employee Claims

The best way to deal with employee claims is for the employer to prevent them from arising in the first place. A proactive approach can make the difference. We help employers in the Bay Area understand the ever-evolving state and federal requirements so that they remain fully compliant. Preventive support limits future lawsuits and preserves resources. If you have any questions about how to develop the right policy to prevent a claim from an employee, our attorney is here as a resource.

Defending Employee Claims

Even if your company does everything the right way, the employer could still face a claim from an employee. California employers face many types of employee allegations, from EEOC and Labor Commissioner complaints to attorney letters and lawsuits. We defend employers against federal and state claims, including discrimination, harassment, overtime, and leave disputes. Facing liability in an employment law claim has the potential to be very costly for an employer. If you have any questions about how an employer can deal with a claim from an employee, our California attorney is here to help.

Handling Discrimination Claims

California strictly enforces anti-discrimination laws. We help Bay Area employers with preventing, responding to, and resolving discrimination claims under federal and California law. Employers must understand Title VII and FEHA obligations to avoid protected-class discrimination legal exposure. Our California employment lawyer can review allegations, conduct impartial investigations, and advise employers on defense strategy.

Termination of Employees

Terminating an employee can be complicated. Even if it is “for cause.” California employers must follow strict rules when terminating employees. Our business law firm advises companies and organizations on lawful termination procedures that reduce risk under state and federal law. Guidance covers documentation, performance records, final pay requirements, wage statements, and timing obligations.

Contact Our Fremont Employment Lawyer Today

Lynnette Ariathurai is an experienced California employment lawyer. If you are an employer with questions about your rights or your options, we are here to help. Contact us today for a completely confidential, no obligation initial consultation. With an office in Fremont, we provide employment law representation throughout the region in California.

California employment law, employer liability, employer risk, employment law

Employer’s Guide to Paid Sick Leave, Family Leave, and Other Mandatory Leaves in California

California law sets strict standards for paid sick leave, family leave, and other forms of mandatory employee leave. Indeed, they are among the most comprehensive in the country. As an employer, you need to be sure that you are in full compliance with leave requirements. Mistakes, even unintentional ones, can expose a company to serious liability. Here, our Fremont employment lawyer provides a guide to paid sick leave, family leave, and other forms of mandatory leave in California.

What Employers Should Know About Paid Sick Leave in California

Under California’s Healthy Workplaces, Healthy Families Act (Cal. Lab. Code § 245–249), all employers must provide paid sick leave to employees who work for 30 or more days within a year. Employees accrue at least one hour of paid sick leave for every 30 hours worked, though employers may cap accrual at 48 hours (or six days) and use at 24 hours (or three days) per year. Accrued time carries over annually (unless an employer adopts a “front-load” policy granting the full leave at the start of each year). Employers can cap the maximum sick leave an employee may take annually at 5 days or 40 hours per year, in a written policy.

What Employers Should Know About Family Leave in California

California’s family leave obligations are primarily governed by the California Family Rights Act (CFRA). It is more comprehensive than the federal Family and Medical Leave Act (FMLA). Covered employers (those with five or more employees) must provide eligible workers up to 12 weeks of job-protected leave in a 12-month period for serious health conditions, bonding with a new child, or caring for a family member. One of several ways in which the CFRA goes beyond FMLA is by covering domestic partners, adult children, siblings, and grandparents. Unlike paid sick leave, family leave under CFRA/FMLA is unpaid. With that being said, employees may substitute accrued paid leave or receive wage replacement through California’s Paid Family Leave (PFL) program which is administered by the Employment Development Department (EDD).

What Employers Should Know About Other Mandatory Leave in California

Beyond sick leave and family leave, California law imposes several other mandatory leave obligations on employers. As an employer, it is your responsibility to be aware of all the different types of leave that apply. Here are some notable examples:

Pregnancy disability leave (PDL): Up to four months of unpaid, job-protected leave for employees disabled by pregnancy or related conditions (Cal. Gov. Code § 12945).
School/childcare leave: Employers who employ 25 or more employees at the same location must provide up to 40 hours annually for parents to enroll their child in school or a licensed child care provider, participate in activities of the school or licensed daycare, and to address school or childcare discipline and emergencies (Cal. Lab. Code § 230.8).
Jury duty and witness leave: Required unpaid leave for service as a juror or witness (Cal. Lab. Code §§ 230–230.1).
Domestic violence, sexual assault, and stalking leave: Unpaid time off to seek medical attention, counseling, or legal protection (Cal. Lab. Code §§ 230, 230.1).
Voting leave: Up to two hours of paid time to vote in a state or federal election if the employee does not have sufficient time outside of working hours to vote at a statewide election (Cal. Elec. Code § 14000).

Contact Our California Employment Lawyer for the Employer Today

Lynnette Ariathurai is a California employment attorney for employers who puts an emphasis on solutions-focused guidance and support. If you have any questions about sick, family, or other mandatory leave requirements in California, we can help. Contact us today for a strictly confidential consultation. From our Fremont office, our firm works with businesses and organizations throughout the Bay Area.

employee leave standards California, family leave standards California, mandatory leaves California, sick leave standards California

Attorney for Closing a Medical Practice in California

There are more than 75,000 actively licensed physicians in California who work across thousands of different medical practices (California Health Care Foundation). Of course, medical practices do not always last forever. New practices are being formed every month and many existing practices are being sold or even being closed down.

If you are a doctor in the Bay Area who is preparing to close your medical practice, it is imperative that you have a comprehensive understanding of your responsibilities. Within this article, our Fremont business lawyer for medical practices highlights the key things to know about closing down a medical practice in California.

Know Your Responsibilities When Closing Down Your Medical Practice

You Must Provide Adequate Written Notice to All Current Patients

There are strict rules regarding “patient abandonment” in California. Your practice does not want to be in violation as it closes down. The California Medical Board emphasizes that physicians must give sufficient advance notice—usually defined as somewhere between 30 and 60 days—so patients have time to secure alternate care and obtain their records. Written notices should be sent in writing either or both mail and email, and they should include the closure date and instructions for obtaining records.

You Must Maintain, Transfer, and Retain Medical Records

One of your big responsibilities when closing a medical practice in California is ensuring that medical records are properly handled. California requires physicians to keep medical records at least seven years from the last date of service for adults and, for minors, until age 25. You must either retain the charts yourself or designate a licensed custodian and disclose that custodian’s contact information in the patient‑notification letter.

You Must Safely Dispose of or Transfer Controlled Substances and Return DEA Forms

There are also strict rules for managing controlled substances. You should conduct a final inventory of Schedule II‑V drugs, cancel unused DEA 222 order forms by writing “VOID,” and mail them—along with your registration certificate—to the local Drug Enforcement Agency (DEA) office. Destruction of controlled substances must meet the federal “non‑retrievable” standard.

You Must Coordinate Continuing/Emergency Care as Appropriate

As a best practice, all medical practices in California should set up a proper system for coordinating continuing care and emergency care through their closure date. To do right by your patients, it is crucial that you take a proactive approach—especially if your practice has vulnerable patients.

You Must Notify Licensing Boards, Payers, and Credentialing Entities

Another requirement is to file a change‑of‑status form with the Medical Board, relinquish hospital privileges, and update your NPI profile. Medicare, Medi‑Cal, TriCare, and private plans generally require 30‑90 day’s notice to terminate provider agreements and to redirect electronic funds or capitation payments. Failure to cancel contracts in the proper manner can cause big problems.

You Must Properly Wind Down Business Operations

Finally, you need to develop a plan for the orderly wind down of your business operations. What this entails will depend, in part, on the specific nature of your medical practice. With that being said, there are many employment requirements. You should ensure that you give all employees written notice that meets California Labor Code requirements, pay final wages (including unused PTO) on the last day, and issue COBRA or Cal‑COBRA election forms.

Our California Business Lawyer Can Help You Close Down a Medical Practice

Lynnette Ariathurai is a California business attorney with the skills and experience to help physicians wind down their medical practice. If you have any questions about your responsibilities, please do not hesitate to contact us today. With an office in Fremont, we work with medical practices throughout the Bay Area.

close medical practice California, medical office closing, physician practice closure

Fee Splitting Laws for Physicians in California

If you are the owner and operator of a medical practice in California and you are preparing to bring on another physician or a management company, it is imperative to have a comprehensive understanding of our state’s fee-splitting laws. A key point is that California law prohibits doctors from splitting fees with non-licensed individuals and non-licensed entities. Here, our Fremont business attorney provides a more comprehensive guide to the fee splitting laws for physicians in California.

An Overview of Fee Splitting Laws for Physicians in California

California’s fee splitting laws prohibit physicians from receiving or giving compensation solely for referrals. State law bars arrangements where a physician’s primary financial gain stems from directing patients to a particular provider (California Code, BPC 650).

To be clear, a violation of the law is a big deal. It can lead to a medical practice facing fines. Further, under California law Cal. Corp. Code § 13408.5, the violation of fee-splitting laws or anti-kickback regulations “shall be grounds for the suspension or revocation of the certificate of registration of the professional corporation.”

Note: The California Physician Ownership Referral Act (PORA) restricts physician self-referrals within the state. It prohibits physicians from referring patients for certain designated health services to entities in which they or their immediate family members have a financial interest—unless a specific exception applies. All referrals should be based on medical need.

The Dos and Don’ts When Hiring Another Physician

DO Ensure the Compensation Structure is Lawful

Medical practice owners should confirm that any salary, bonus, or other compensation is based on legitimate work performed—not simply on referrals. Compliance with fee-shifting is a must.

DO Use Written Contracts for Physicians

Documentation is key. Medical practices should use clear, professionally drafted contracts outlining responsibilities, compensation terms, and the services provided.

DO Be Ready to Seek Professional Guidance

Physician compensation is complicated. It is also highly regulated. Medical practices should not hesitate to seek guidance from an experienced California business lawyer.

DON’T Tie Payment to Patient Referrals

Medical practices must strictly avoid incentives or percentage-based payments exclusively linked to patient volume or referrals. That could violate California fee-splitting laws.

DON’T Assume Federal Compliance is Sufficient in California

California law for fee-splitting and physical referrals is more strict than federal requirements. Meeting federal Anti-Kickback or Stark Law standards does not automatically satisfy our state law.

Know the Difference: Employees and Independent Contractors

A physician may be classified by a medical practice as either an employee or an independent contractor in California. The proper classification depends on case-specific factors, including their workplace responsibilities. Doctor-employees typically work under direct supervision, while independent contractors maintain substantial autonomy over their schedules and practice methods. Independent contractors must also have a written contract, a business license, and also provide their services to other medical practices.

Contact Our Fremont Business Lawyer for Medical Practices today

Lynnette Ariathurai is a California business lawyer with extensive experience working with medical practices. If you have any questions about fee splitting laws for physicians, we can help. Call us now or connect with us online for a fully confidential consultation. Our firm provides business law services across the region, including in Fremont, Union City, San Jose, Santa Clara, Newark, and Hayward.

California medical practice law, physician fee splitting California

Stealing Employees from a Nursing Practice in California

A nursing practice is about its people. It is the type of business that requires skilled, experienced nurses on staff to operate competitively. A great nurse is one that has had a lot of training—and many businesses make big investments into their nurses. This raises an important question: Is it legal to take the nurses from a competing business? The answer is generally “yes”—California law provides limited protections. Here, our Fremont business lawyer highlights the key things to know about our state’s regulations regarding stealing employees from a nursing practice.

California Law Largely Does Not Prohibit “Stealing” of Employees from Nursing Practices

California is an at-will employment state that, for the most part, protects an employee’s ability to move from one job to another. Indeed, there is strong public policy in favor of employee mobility and competition and the medical field, including nursing, is no exception. Indeed, non-compete agreements are largely unenforceable in our state. Further, there is no law that stops the stealing of employees from another medical practice in California.

The exception (workplace raids): There is an exception in California for so-called “workplace raids.” If a competitor engages in unfair practices—such as intentionally targeting another business’s employees with the intent to disrupt or interfere with that business—it may be unlawful. It could give rise to a claim under California Business and Professions Code § 17200.

Nursing Practices Have a General Right to Recruit from Competing Businesses

Like other businesses, nursing practices have a general right to compete in the marketplace. Among other things, this means that they have the right to recruit or “steal” employees from competing firms by offering them better opportunities. It could be higher pay, better benefits, or more favorable working conditions. As long as the recruitment is done without violating the law it is legally permissible in California.

How Nursing Practices Can Protect their Investment in Human Capital

Although a nursing practice cannot stop a competing business from trying to recruit their employees, there are steps that employers in the health care industry in California can take to protect their investment in human capital. Options include:

Employment contracts: To protect their investment in human capital, nursing practices can use employment contracts. A California employment lawyer can help you structure nursing contracts in a manner that helps prevent workers from leaving to take an offer at a competing business.
Non-solicitation agreements: While non-compete clauses are unenforceable in California, non-solicitation agreements that prevent former employees from soliciting the company’s clients or employees may be enforceable if they are reasonable in scope
Trade secret protections: Nursing practices should also safeguard their trade secrets and confidential information. Under the California Uniform Trade Secrets Act, businesses can take legal action against anyone who misappropriated their trade secrets.

Contact Our California Business Lawyer for Nursing Practice Today

Lynnette Ariathurai is a California business attorney with the skills and experience to represent nursing practices. If you have any questions about nursing practice employee stealing/poaching, please do not hesitate to contact us today for a confidential initial consultation. With a law office in Fremont, we represent nursing practices throughout the San Francisco Bay Area including San Jose, San Mateo, Hayward, and Newark.

California workplace raid law, employee poaching, employee stealing

Discrimination Policy Lawyer for Business

We Draft and Review Anti-Discrimination Policies for Businesses in California

Lynnette Ariathurai is an experienced discrimination policy attorney for businesses in California. As of 2016, all companies and organizations with five or more employees are required to draft and distribute a legally compliant anti-discrimination policy. The right discrimination policy can help to prevent claims and reduce your risk of liability if an issue does arise. Contact us at our Fremont law office today for a confidential consultation with a California discrimination policy lawyer.

Know the Law: California has Strong Anti-Discrimination Provisions

California has strict anti-discrimination requirements for businesses. As explained by the California Civil Rights Department, our state’s Fair Employment and Housing Act (FEHA) applies to businesses and organizations with five or more employees. The law in California prohibits discriminatory practices in the workplace based on several different protected characteristics, including:

Race
Color
National origin
Sex
Gender
Sexual orientation
Gender identity
Age (40 plus)
Disability status
Medical conditions
Pregnancy status

Note: FEHA prohibits employers from retaliating against a worker who raises a complaint of discrimination. Any complaint must be taken seriously by employers—even if not well-supported.

Employers Must Distribute Written Anti-Discrimination Policy

In 2016, California changed its workplace regulations. Employers that are covered by FEHA—those with five or more employees, including part-time workers—must write and distribute a legally compliant anti-discrimination policy that meets the requirements of 2 CCR §11023. The policy should clearly confirm an employer’s commitment to preventing discrimination, harassment, and retaliation. Among other things, a written workplace anti-discrimination policy should highlight the law and provide basic complaint procedures for affected employees.

Your Anti-Discrimination Policy Should Be Drafted by a Lawyer

No employer wants to face liability from a discrimination claim. Indeed, preventing discrimination complaints from employees is highly desirable. The right (written) anti-discrimination policy can make a big difference. Professional expertise is a must. Employers should consult with an employment lawyer who can ensure that the policy is properly drafted and that it complies with all the requirements of FEHA and other laws/regulations in California. Your attorney can also tailor the policy to the specific needs of your business or organization.

How to Handle an Employee’s Discrimination Complaint (Be Proactive)

Even the best anti-discrimination policy cannot guarantee that no employee complaint will ever arise. Employers need to be ready to accept a complaint, independently investigate the allegations, and develop a defense strategy. There is no one-size-fits-all response to a worker’s discrimination complaint and/or harassment complaint. While these cases are generally best resolved before a lawsuit is filed, employers need to be prepared to fight aggressively to protect their interests.

Contact Our California Business Lawyer for Help with an Anti-Discrimination Policy

Lynnette Ariathurai is a business law attorney who helps companies prevent and resolve discrimination complaints. If you have any questions about writing an anti-discrimination policy, we are here to help. Contact us today for your confidential initial consultation. With an office in Fremont, we help businesses draft discrimination policies throughout the Bay Area including San Jose, San Mateo, Hayward, and Newark.

anti-discrimination policy, California anti-discrimination law, discrimination claims

Understand the Regulations Surrounding Employee Recruitment and Hiring in California

Businesses and organizations make major investments into finding, recruiting, hiring, and training employees. If a direct competitor tries to swoop in and take all your qualified staff, it could cause serious harm to your business. California law provides some limited legal protection in this scenario—but employee poaching is technically not a prohibited practice. In this article, our Fremont business law attorney provides an overview of the key things companies should know about the regulations surrounding employee recruitment and hiring in California.

Know the Law: California is an At-Will Employment State—But Workplace Raids are Banned

Businesses in California are right to be worried about protecting their human capital. Companies make tremendous investments into training employees. A competitor may try to come in and take your qualified staff. At the same time, California is an “at-will” employment state. Employees can leave a company for any reason. The law does not stop them from joining a competitor.

In fact, California allows businesses to recruit directly from competitors. State law does not specifically ban the practice of employee poaching—whereby businesses actively seek out and hire workers from their competitors. As frustrating as it can be to deal with a competitor that is recruiting your employees, it is not an unlawful practice.

With that being said, there is an important limit: California does bar workforce raids. That is viewed as an anti-competitive, monopolistic practice. A competitor that attempts to raid your staff—meaning they aggressively try to hire many (or all) of your employees at once—may be in violation of state law. A workforce “raid” is distinct from lawful hiring recruitment.

The Best Legal Strategy to Protect Against Employee Poaching: Employment Agreements

Employers are not entirely helpless against the forceful recruiting of their staff. One of the best approaches to safeguard against employee poaching is to use well-written employment agreements. These contracts should clearly outline the terms of employment—including job responsibilities, salary, benefits, and duration. A contract may be structured so that an employee is strongly (financially) disincentivized from joining a competitor for a predetermined time.

In California, businesses should avoid including non-compete provisions within an employment agreement. Non-competes are not enforceable in California. Indeed, in September of 2023, California Governor Gavin Newsom signed Senate Bill 699 into law—legislation that further expands the state’s ban on non-compete agreements. In other words, an employment agreement cannot directly bar an employee from joining a competing firm in the future.

The bottom line on understanding the regulations surrounding employee recruitment and hiring in California: the state allows competing businesses to recruit directly from each other’s staff—as long as they avoid anti-competitive mass “raids.” Companies can use employment agreements to help retain their staff.

Get Help from Our Fremont, CA Business Law Attorney Today

Lynnette Ariathurai is a business lawyer with considerable experience helping companies navigate California’s employment, recruitment, and employee poaching laws. If you have questions about your rights, your options, or protecting your employees, please do not hesitate to contact us today. With an office in Fremont, we work with businesses throughout the Bay Area.

California employment laws, employee poaching, employment agreements, workforce raids

Stealing Employees from a Medical Practice in California (Know the Law)

Medicine is a highly competitive field in the Bay Area. The Medical Board of California reports that there are nearly 170,000 licensed doctors in the state. There are many thousands of professional practices. This raises an important question: Can medical practices in California protect their competitors from stealing employees? The short answer is that our state has very limited regulations to protect business, but medical practices have some options for keeping staff. Here, our Fremont business lawyer for medical practices highlights the key things you should know about the laws around stealing employees from a competing business in California.

What Medical Practices Should Know About California Law on Stealing Employees

The most important piece of background information for medical practices to understand is that California is an at-will employment state. Either the employer or the employee can end their working relationship at any time for almost any reason, except for an illegal reason. Further, there is no employee poaching statute in California. Quite the contrary, a medical practice can lawfully recruit and hire the employees of a direct competitor.

That being said, there are limits. Most notably, the law strictly prohibits large-scale workplace raids of a competing business. It is a violation that occurs when a business—including a medical practice—intentionally targets another business and tries to hire away a significant number of its staff all at once to undermine that competing firm.

Medical Practices Can Use Employment Contracts to Protect Staff

While the law does not prohibit general employee “stealing” by competing business, there are proactive steps that medical practices in California can take to protect the investment that they made in finding, building, and training their staff. The best option is generally a well-drafted employment agreement. These contracts outline the terms and conditions of an employee’s relationship with the medical practice. While non-compete agreements are not valid in California, an employment agreement could help to keep your staff in place. It may require advance notice and/or the repayment of certain bonuses if your employee leaves the practice before the end of their agreement.

A Medical Practice in California May Protect Proprietary Business Information with an NDA

Although California medical practices ultimately have somewhat limited options for stopping an employee from joining a competitor, they have far stronger options for protecting their sensitive business information. A non-disclosure agreement (NDA) can provide much needed protection if an employee had access to proprietary information about your medical practice. An NDA is a legal document that requires employees to keep certain information confidential for a predetermined period.

Contact Our California Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a top-tier business attorney with extensive experience working with medical practices. If you have any questions about California law regarding the stealing of employees from a competing medical practice, we are here to help. Contact us today for a completely confidential initial case review. From our Fremont office, our firm serves clients throughout the Bay Area.

California employment laws, employee poaching, employee stealing, employment agreements, workforce raids

Legal Controls for a Group Medical Practice in California (Part I)

The California Hospital Association defines a group practice as a “medical practice comprised of two or more physicians organized to provide patient care services.” All group medical practices need a strong, well-developed legal structure plan. Understanding the role/responsibilities of the different players in the business is essential. In part one of this series, our Bay Area medical practice law attorney discusses legal controls for group medical practices in terms of shareholders, partners, the board of directors, and managing partners.

Shareholders

In California, a medical practice will generally be formed as a Professional Corporation (PC) under the state’s Moscone-Knox Professional Corporation Act. As a rule, a person must be licensed in the practice of medicine to be eligible to be a shareholder for a group medical practice.

Shareholders in a medical practice are typically the owners of the company. They have invested capital into the practice and, as a result, hold a vested interest in its success. Shareholders often have the power to vote on major decisions affecting the practice.

The rights and responsibilities of a shareholder in a group medical practice will depend, in part, on the structure of the business, including their stake in the company. A majority shareholder will have far more influence than a shareholder who owns a small stake.

The Board of Directors

The Board of Directors is responsible for the strategic direction and oversight of the medical practice. Members are often elected by the shareholders—and, in many cases—are shareholders themselves. Key responsibilities of the Board of Directors typically include establishing governance policies, ensuring the practice adheres to legal standards, financial oversight for the business, and strategy planning.

Managing Partner

The managing partner of a group medical practice is a person in a key leadership role. Most often, the managing partner is a senior physician who owns a significant stake in the business. The role of managing partner typically blends clinical medical expertise with strong business skills. Business leadership is important to ensure effective management of the medical practice’s operations.

The managing partner of a medical practice who is often the individual responsible for overseeing day-to-day operations and ensuring that the practice runs smoothly

Not just anyone can serve as the managing partner for a group medical practice In California. The role is highly regulated due to our state’s strict adherence to the Corporate Practice of Medicine (CPOM) doctrine. A medical practice must be owned and managed by licensed physicians—as such, the managing partner must be a licensed doctor.

Contact Our Bay Area Business Law Attorney for Group Medical Practices Attorney

Lynnette Ariathurai is a top-tier, solutions-driven advocate for clients. With extensive experience representing group medical practices, we have professional knowledge that you can rely on for questions about legal controls. Contact us today to set up your confidential consultation. From our Fremont law office, we work with group medical practices through the Bay Area.

California medical practice legal counsel, medical practice legal controls, medical practice legal structure, medical practice ownership