‍Hiring employees to work at your therapy practice introduces a new set of responsibilities you, as employer, must be ready to shoulder.

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Not only do clients rely on you and your practice for mental health services, but now your employees rely on you for their livelihoods. That means taking care of everything from making sure everybody is paid on time to resolving disputes between employees.

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But don’t let your new responsibilities get in the way of the excitement, opportunity, and—yes—even fun of running a group practice. 

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By taking a big-picture look at everything that needs doing, and seeing how all the different pieces work together, you can start building a group practice your employees will love being a part of.

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Here’s what you need to know to get started.

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Note: This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Heads up: employees vs. contractors

This playbook is geared towards group practices hiring and managing employees.

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Employees are different from contractors in a number of important ways, requiring more complex payroll treatment, plus more tax and legal obligations on your part. 

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For more on the difference between the two, check out our guide to hiring independent contractors.

Why managing employees matters for therapy practices

For your group practice to succeed, you need to become adept at all parts of managing employees—from interviewing new hires to helping current employees prepare for next steps in their careers.

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Here are four reasons why.

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Employee retention

It costs you time and money to find and hire new employees. That means every employee you hire is an investment. When you have high turnover—therapists frequently leave your practice, only to be replaced by new ones—you waste your resources as a business. Happy employees are more likely to stick around long term.

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Employee performance

The happier the therapists working at your practice are, the better they’ll be at their jobs. They’re more likely to fill their client lists to capacity, participate in group projects, and stick around—in a word, to invest themselves in your group practice—if they’re happy to be a part of it.

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Better experiences for clients

When a therapist quits working at your practice, or when they frequently miss appointments due to burnout, it can disrupt the lives of clients relying on them for care. And administrative SNAFUs like double-booked office space or unexpected business closures only add to the trouble. Good employee management means better client experiences. Not to mention, if employees don’t do well, then it can result in bad reviews and even board issues.

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Fewer lawsuits

Failing, through bad management, to give employees their legal due can result in legal action. That not only has a negative impact financially, but could give your practice a bad reputation, losing you clients and future hires.

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Fewer costs

Without people management, you don't know how to say no to requests for more money, so you end up giving people whatever they ask and ultimately you can't afford that so it comes out of your own paycheck. Additionally, employees who aren't managed well can cost the practice money through making costly mistakes like not charging cards properly.

Hiring employees for your therapy practice

Managing employees for your therapy practice is easier when you have a great team to begin with. For a deep dive on finding and hiring employees for your therapy practice, check out How to Grow Your Solo Therapy Practice Into a Group Practice.

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Here’s a summary of the eight steps.

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1. Write a job description, including duties, expectations, compensation, and benefits.
2. Reach out to your professional network. You may be able to find your next employee without even creating a job listing. According to Elizabeth Earnshaw, LMFT, “word of mouth hiring is the best because you already know that the person that works for you is somebody that you really can work alongside and provide quality care.”
3. If talking to your network doesn’t find you the perfect match, decide where you’ll post the listing. Your options aren’t limited to online job boards. Consider local news publications, career centers, and community groups.
4. Create your job listing based on this therapist job description example.
5. Plan a hiring workflow that includes multiple points of contact (a screening interview by phone, an in-person interview, a team interview with other employees taking notes).
6. Weed out applicants whose CVs don’t fit the role, then schedule interviews.
7. Conduct interviews. What questions will you ask? How do you know if someone is a good fit? What information will you share with them? What internal process do you go through for making hiring decisions?
8. After the multi-step interview process (including reviewing the potential hire with team members if you have existing employees aid in the interview), draft an offer letter and hiring contract
9. Once the applicant accepts, begin the onboarding process.

Onboarding new employees at your therapy practice

Onboarding is the process of giving new employees what they need to become part of your therapy practice’s team and start successfully treating clients. That includes everything from setting up benefits and payroll to introducing them to all the other members of your team.

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Even if you’re hiring your first employee, it’s a good idea to have an onboarding plan in place. It will help them become comfortable working at your new group practice and help you check off all the boxes when it comes to tax forms and payroll setup.

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Heads up: Our state-by-state hiring guide covers every state (plus Washington, D.C.) and gives you all the steps you need to take, at the state level, to formally hire employees.

Create onboarding lists

Before your new employee’s first day, create two onboarding lists: one for you and one for them.

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The onboarding list includes every task each of you needs to finish in order to complete the onboarding process. 

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You can find a sample onboarding list in our guide to growing your solo therapy practice into a group practice.

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Onboarding List — Employer (you)

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• Enter new employee information in your payroll software
• Add the new employee to your malpractice insurance
• Create email, EHR, teleconferencing, and other accounts for them
• Set up and provide them with a work phone
• Add them to your practice’s schedule
• Set up benefits package in payroll
• Schedule an in-person training session

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Onboarding List — Employee (new hire)

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• Sign and accept the offer letter
• Register with your HR/payroll platform (provide a link)
• Submit W-2 or W-4 forms via your payroll platform
• Send you a copy of their license
• Provide CAQH and NPI numbers
• Complete HIPAA training
• Panel with particular insurance companies
• Provide a bio and professional headshot for your website
• Provide links to their public-facing social media accounts
• Log into their email, EHR, and teleconferencing accounts

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Naturally, the contents of these lists will vary according to the needs of your practice and its employees. The important thing is to have the list on hand before you start onboarding—so you’re never left wondering what step to take next.

Plan an orientation session

Schedule a full or half day for your new employee to come in when you can give them the materials they need to get started and familiarize them with your office space. 

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If possible, schedule the orientation for a day when other employees are available, so you can introduce the new hire to the rest of your team.

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Create an orientation checklist—different from your onboarding checklists—including everything your new employee needs for their orientation.

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Here’s an example.

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Orientation Day Checklist

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• Copy of employee contract
• Copy of employee handbook (more on this below)
• Office swipe card and/or office codes
• Login info for their company email or Google Workspace account
• Email invites for EHR, scheduling software, teleconferencing software, and their payroll dashboard
• Company work phone
• Company work laptop
• Business cards

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These are the tools they need to start working in an official capacity. But in order to help your new hire feel at home working for your practice, consider putting together a welcome package as well, including a welcome letter, gift certificates to local businesses, or an invitation to an after-work get-together with the rest of your staff.

Training your new employee

Block off time to train your new hire in any systems or processes in your office that can’t be covered with documentation. For instance:

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• Processes for enabling or disabling alarms (if your employee will be the first to arrive or the last to leave the office)
• Safety procedures in case of fire, earthquake, or natural disasters
• HIPAA-compliance requirements and procedures
• How to access safe walk, community policing, and similar resources in your neighborhood
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Essential documents for therapy practice new hires

This is a list of documents you need to keep on hand for the sake of legal and tax compliance, as well as having everything you need to manage an employee’s payroll distributions and benefits. 

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If these documents are scattered across different apps, accounts, and software systems, try either to combine them all on one drive, or create backup copies that can be kept in a single location. It means you’ll be less likely to lose track of important documents and spend less time searching when you need them.

Employee Form I-9

You and your new employee must complete Form I-9, which US Citizenship and Immigration Services (USCIS) uses to verify that an individual is eligible for employment in the USA.

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On top of completing the form, you’re required to keep it on file for three years after hiring, or one year after the employee quits (whichever comes first). 

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Both you and your employee have jobs to do when filing this form:

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• Your employee must complete Section 1 of Form I-9, providing personal information like their name, address, and date of birth. They also need to attest to the fact that they’re eligible for employment in the USA. And it’s up to them to provide identifying documents (more on that in a moment).
• You, the employer, are responsible for completing Section 2 of the form. This involves examining and making records of all the documents the employee provides to verify their identity and their eligibility to work in the USA. 

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Form I-9 includes a list of documents your new employee may use to verify their identity and eligibility, split into three lists:

List A

Documents proving both the holder’s identity and their right to work in the USA. Only one of the following needs to be provided:

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• U.S. Passport or U.S. Passport Card
• Permanent Resident Card (Form I-551)
• Employment Authorization Document (Form I-766)
• Foreign Passport with an I-94 or I-94A and an I-551 stamp (if applicable)
• Certificate of Citizenship (Form N-560 or N-561)
• Certificate of Naturalization (Form N-550 or N-570)

List B

If the employee doesn’t provide a document from List A, they must provide one of the following:

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• Driver's License or State ID Card issued by a U.S. state or outlying possession
• Federal or State Government ID Card with a photograph
• School ID Card with a photograph (if under 18)
• Voter's Registration Card
• U.S. Military Card or Draft Record
• Military Dependent’s ID Card
• Tribal ID Card (if issued by a federally recognized tribe)
• Employment Authorization Document (if it does not fall under List A)

List C

If the employee doesn’t provide a document from List A, then in addition to a document from List B, they must provide one of the following:

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• Social Security Card (issued by the Social Security Administration)
• Birth Certificate issued by a U.S. state or outlying possession
• U.S. Citizen ID Card (Form I-197)
• Certificate of Birth Abroad (Form FS-545 or FS-240)
• Employment Authorization Document (Form I-766, if not used in List A)
• Current Immigration Document (such as Form I-94, Form I-95, or Form I-551)

Employee general file

An employee’s general file includes everything they provide when they join your practice, and everything they provide if or when they leave:

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• Job application forms
• CV and cover letter 
• Letters of recommendation
• Employment contract
• Any past employment documents, eg. a certificate of employment
• Offer letter
• Education and training records
• Emergency contacts
• Payroll and benefits information
• Performance appraisal documents
• Resignation letter and exit interview files

Employee medical file

An employee’s medical file includes everything you need to administer and provide their medical benefits. If you use a payroll platform to manage employee benefits, this information may be stored there:

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• Information about beneficiaries
• Health and life insurance application forms and certificates
• Requests for paid or unpaid leave
• Forms related to the Family Medical Leave Act (FMLA)
• Physician’s recommendations, diagnosis, or notes
• Doctor’s prescriptions
• Documentation of medical leaves, including emergency care for family members
• Accident and injury reports

How to create an employee handbook for your therapy practice

An employee handbook serves as one centralized document that lays out expectations for employees, outlines company policies, and answers common questions.

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The exact contents of your employee handbook will depend on the specifics of how you run your therapy practice and requirements in your state. Different states require employers to supply different documents (eg. anti-harassment policies) to their employees.

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If you only have one or two employees working for you, you may not have an employee handbook yet. But once your practice expands beyond those first one or two employees, you’ll save yourself time and effort by creating a handbook to give every new hire.

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The US Chamber of Commerce’s blog suggests a few options for employee handbook templates. Whatever method you use to write your employee handbook, it should include the following.

COVID-19 policy

With COVID-19 now a part of daily life, it’s important you set clear expectations for employees when it comes to masks, social distancing, testing, up-to-date vaccinations, and staying isolated while sick. 

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State laws vary considerably when it comes to employers enforcing mask-wearing and vaccine mandates. Contact state employment authorities for up-to-date information so you can be sure your policy complies.

At-will employment

An at-will employment disclaimer notes that—barring employed contracts or public policies—either you or the employee can end your relationship for any reason, so long as the reason is legal. One exception: Montana. The State of Montana does not recognize at-will employment.

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It’s HR best practice to include this disclaimer at the beginning of your employee handbook.

Anti-harassment policy

An anti-harassment policy lays out your practice’s stance on harassment, defines unacceptable behaviors, and outlines procedures for reporting and resolving incidents.

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A growing number of states require employers to provide anti-harassment policies. Some are limited to certain industries, but if your therapy practice operates in any one of the states below, you may be required to provide a policy:

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• California 
• Connecticut (if you have three or more employees)
• Illinois 
• Maine (must be redistributed annually to all employees)
• Massachusetts (if you have six or more employees) (must be redistributed annually to all employees)
• New York 
• Oregon 
• Rhode Island (if you have 50 or more employees)
• Vermont 

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For help getting started, check out this anti-harassment policy template. 

Anti-discrimination policy

The Equal Employment Opportunity Commission (EEOC)’s reporting portal should give you a sense of what forms of discrimination are illegal at the federal level.

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In addition to federal anti-discrimination laws, more states and jurisdictions are drafting their own laws against discrimination in the workplace. Laws also vary, state by state, on whether you are required to provide an anti-discrimination policy to employees. Check with your Secretary of State or state labor bureau for up-to-date information.

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Regardless of local laws, your anti-discrimination policy should:

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• List all characteristics protected by state, federal, and local laws
• Address who is covered by the policy (job applicants, employees, interns, contractors)
• Prohibit retaliation (on your part) against employees for filing complaints or helping with investigations
• Underline that all employment decisions are based upon the individual’s qualifications and abilities, with nothing to do with protected characteristics
• Govern all aspects of employment at your practice, including (but not limited to) hiring, selection for promotion, training, benefits, compensation, discipline, and termination
• Urge employee to report any cases of discrimination, and provide the right channels through which to do so
• State disciplinary action—including immediate termination—that will be used against any employee who violates the policy

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You can get a start on your anti-discrimination policy with employers’ resources from Workable.

Employment classification

This section should define the different classifications of full-time and part-time employment, as well as exempt and non-exempt employment statuses affecting benefits and overtime pay.

Leave and time off benefits

State and local laws vary as to holidays, vacation, and leave employers must guarantee their employees. And the benefits your practice in particular offers employees may affect your policy.

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Generally, though, your leave and time off benefits policy should include:

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• Who is eligible for different types of leave and time off
• What reasons qualify leave
• How much leave you will grant different employees
• Whether or not leave will accumulate and carry over
• Rules regarding paid and unpaid leave
• The amount of notice you need before an employee takes leave
• Continuation of benefits during leave
• Procedures for requesting leave
• Your duties as employer for recordkeeping and providing notice
• Reinstatement at the end of leave

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Consider including additional information that specifically applies to clinical therapists, eg. how much notice they are expected to give clients before taking leave, and procedures for referring clients to other therapists during leave.

Meal and break periods

Since most or all of your employees’ schedules are based on when they see clients, it may not be necessary to include policies for at-work meals and break periods. But check with state and local laws: you may be required to provide this information regardless.

Time tracking, scheduling, and pay

This section lays out expectations for employees tracking their work hours, including the system they should use to do so. 

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You should also explain how employees are expected to manage their schedules—whether with their own scheduling apps, or a shared office app—and how that intersects with the way office space is shared between multiple employees (ie. room/office scheduling).

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Importantly, this is also where you outline how employees are paid—whether you use a fee split plan (the employee collecting payment from their clients and paying a percentage to your practice, or vice versa) or a salary. 

Employee conduct

At its core, the employee conduct section describes how employees are expected to behave at work and how they can expect their colleagues to behave in turn. 

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That includes:

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• Clothing and grooming (dress code)
• Conduct using shared space and tools
• Alcohol or drug abuse 
• Confidentiality
• Conflict reporting and resolution
• Conflicts of interest
• Workplace violence
• Behavior towards clients (their own and others)
• Disciplinary action

Reasonable accommodations 

Under federal law (Americans with Disabilities Act and Title VII of the Civil Rights Act), as well as some state laws, you may be required to provide qualified employees reasonable accommodations if they have a disability or sincerely held religious beliefs and practices—so long as doing so would not cause your practice severe hardship.

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Outlining your policy towards reasonable accommodations may or may not be required by state or local laws, so check with local authorities. This reasonable accommodation FAQ may give you a better sense of what reasonable accommodation encompasses and how to provide it.

Employee signature

Include a section at the end of your employee handbook where your employee can physically or digitally sign, indicating that they’ve read the handbook and agree to its policies.

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Payroll and benefits for your therapy practice

Even if you’ve just only just onboarded your first employees, outsourcing payroll and benefits to a third party can save you a huge amount of time and energy while ensuring you remain compliant with federal and state labor laws. 

According to group practice owner Lisa Savage, LCSW, “bringing in experts, people that do this for a living, it takes the burden off of the business owner, and I think it also lends to your credibility as well.”

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Learn more from our guide to payroll solutions for therapy practices.

Benefits for employees of your therapy practice

When it comes time to decide what types of benefits you’ll offer employees at your practice, these are the ones to be aware of.

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Workers’ compensation

Your contributions to workers’ compensation insurance help to support an employee in the event they have to take time off due to injury or illness as a result of their job. States vary when it comes to your requirement as an employer to contribute to workers’ comp; see our state-by-state hiring guide for therapists for more info.

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Unemployment insurance

Managed at the state level, UI helps individuals make ends meet when they are between jobs. Like workers’ compensation, your duties to contribute to UI vary according to which state your business is based in and the types of workers you employ.

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Family and medical leave

Provisions for family and medical leave—paid or otherwise—give employees a means of taking time off work in the event of illness or injury. 

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Health insurance

A healthcare plan—whether traditional health insurance or a health spendings account (HSA)—can be a major benefit to your employees. Learn more from our article on how to choose a healthcare plan for your therapy practice.

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Dental and vision insurance

These may be covered as extended features of your practice’s healthcare plan, or with a separate plan or HSA.

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Retirement

Retirement savings accounts vary considerably in terms of how they operate. For the full rundown, see how to choose a retirement plan for your therapy practice.

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Wellness programs

If health plans aid employees in the event of unforeseen illness or injury, wellness programs help them maintain a high quality of life. Your wellness program may include a spending account for benefits like gym memberships, counseling, massage, nutritionists, or even outdoors equipment. 

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Paid time off and holidays

Paid time off and guaranteed holidays may not be as necessary for therapists who set their own schedules, but if any of your employees work standard work weeks, they’re a must have. 

Measuring employee performance at your therapy practice 

Performance reviews have a bad reputation. In fact, according to a Gallup poll, just one in five employees consider performance reviews useful. In the eyes of many employees, a review is a formality, a precursor to a change in compensation or a staffing shakeup—rarely a harbinger of good things to come. 

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The purpose of a review is to give employees actionable feedback on how they can become not just better employees but better professionals overall. Your goal as employer is twofold: 

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1. To continually improve how employees serve your practice, their colleagues, and their clients
2. To give employees productive feedback that helps them grow and improve as therapists and individuals

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Scheduling performance reviews as a recurring event—annually or bi-annually—helps reinforce to employees that reviews are routine, and part of the toolkit you use to keep the practice running smoothly. 

How to conduct a performance review for a therapist at your practice

Here’s a simplified overview of the steps you need to take to conduct a great performance review. For a deeper dive, check out this article from the Harvard Business Review.

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Prior to the review meeting, you may ask your employee to complete a self-evaluation, which you can go over together during steps 6 and 7.

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Set your criteria

Clarity and relevance are the keywords here. A written set of criteria will help the review run smoothly. For inspiration, have a look at this therapist evaluation checklist designed for grading trainee therapists, or this one from Employeepedia.

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Schedule time

You’re discussing employees’ livelihoods during their reviews. Make sure to schedule enough time for a thorough review, so they know you take it seriously.

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Demonstrate positive intent

During the lead-up to the review and the review itself, make it clear your goal is to help your employee grow in their role at your practice and develop their skills as a therapist. A performance review isn’t punitive. 

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State your own observations

Describe what you’ve observed of your employee’s work—both positives and negatives—from your position as head of the practice.

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Describe the impact of their actions

Again considering both positives and negatives—areas where your employee excels, and areas where there’s room for improvement—describe how your employee has impacted other therapists, clients, and the practice as a whole.

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Welcome the employee’s response

Once you’ve described your point of view, make space in the conversation for your employee to explain their own experience.

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Set goals for the future. Working together, set concrete goals—with timelines—for ways the employee can develop their skills and correct course where necessary.

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After the review is finished, schedule regular follow-ups to re-evaluate their performance, determine whether goals have been met, and give them more feedback as needed.

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Managing therapists at your practice

Keeping your staff members happy and your practice running smoothly demands a lot of day-to-day effort. 

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“I've been in management for a very long time, but it is hard. You're managing people. People are complex,” Lisa Savage, LCSW said. 

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If you’re new to managing people, here’s how to tackle some of the basic tasks your role requires.

How to hold meetings at your therapy practice

Regular meetings keep everyone on the same page, giving you a forum to deliver news, gather feedback, and ensure everyone’s voice is heard.

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Some guidelines:

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• Schedule regular staff meetings that every employee can attend, and make attendance mandatory
• Set a precise time to start and end the meeting 
• Present a clear agenda at the beginning of the meeting, with a dedicated block of time for each item 
• Assign a notetaker (or record the meeting and use a transcription app to create a document you can share after)
• When topics come up that aren’t relevant to everyone at the meeting, table them for later (e.g. plan separate side meetings to address them)

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Kim Scott, author of Radical Respect: How to Work Together Better, has written an article on how to run meetings that “don’t suck”. While it’s aimed at CEOs, most of the guidelines and advice may be adapted to running a group therapy practice.

How to communicate major changes to employees

When you make major changes at your practice—like hiring new senior staff members, moving locations, or expanding the business—they may make perfect sense to you. But to the therapists working at your practice, who don’t necessarily have behind-the-scenes insight into how your practice is run, big changes can be scary.

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Any time there’s a shakeup, set aside time to clearly communicate what’s going on. That could be a company-wide email, an agenda item at your next staff meeting, or even a special “all hands on deck” meeting if the matter is urgent.

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Four steps for sharing major changes with employees based on this Harvard Business School guide:

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Share a vision

Before diving into the details of what the big changes entail, paint a picture of what the outcome will be. How will your practice change? What are the new benefits everyone can expect to enjoy? How will it help therapists at your practice better serve their clients and develop professionally?

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Tell a story

Work the changes into the narrative of your group practice. Maybe it’s the story of a small practice growing bigger, to serve more clients in your community. Or maybe it’s the story of a successful practice tightening purse strings to weather economic storms, while staying true to its values.

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Make employees the heroes

Are these changes the effect of outside forces asserting their dominance over a helpless group of therapists—or are the therapists themselves, your staff, the people effecting the change? Make it clear that everyone has a role to play, and everyone will have an impact on what’s to come.

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Chart the path ahead

Explain how each member of your team is expected to contribute. If needed, specify that you’ll be following up with one-on-one meetings to get each employee onboard and give them clear directions.

How to discuss money with employees (when there is not extra money)

One of the most common difficult conversations new group practice owners have to face are about money.

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“There are going to be people who ask for more money and you have to say no because there isn't more money. I think you have to have harder conversations and you have to become the bad guy a little bit more,” Elizabeth Earnshawn, LMFT explained

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While you have insight into revenue, expenses, and long-term financial plans, your employees do not. Get ready for:

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• “So, I wanted to discuss my fee split...”
• “When can we hire an office manager?”
• “If the office had an espresso machine, we wouldn’t have to go out for coffee. Think of the savings!”
• “I need someone to do my social media for me.”
• “I think I need a personal assistant.”
• “When are we going to move to a bigger office?”
• “About that fee split…”

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When these topics come up, the most important thing is to explain that resources are not limitless, and while reduced fee splits or more employee perks may seem like a good idea now, they could have a long-term effect on your ability to keep the business running.

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Conversations with your staff about money is one of the situations where having an accountant can help. As head of the practice, you can’t defer to a higher authority. But “I talked to our accountant, and it’s just not possible right now” can help reinforce your position when you have to turn down requests.

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For a closer look at the topic, check out Payscale’s article on pay conversations when more money isn’t on the table. 

Company culture at your therapy practice

Good company culture is the result of all your efforts to manage your employees and keep your practice running smoothly. But here are some specific steps you can take to keep morale high and ensure good staff retention.

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Your conflict resolution strategy

Having a go-to playbook for successfully resolving conflicts between staff members helps stop problems before they start. Check out these five conflict resolution strategies.

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Recognizing individual milestones

Work anniversaries, professional growth, and other achievements deserve to be celebrated. Here’s how to recognize staff milestones at your practice.

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Offsites and other training

An offsite event helps shake everyone out of their day-to-day routine. It can help staff bond, while giving everyone a chance to upgrade their professional skills. Here’s how to plan a team offsite that actually works.

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Conferences and other events

Funding staff trips to conferences, workshops, and other events for therapists both contributes to their professional growth and helps build morale. Plus, the cost is tax deductible.

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Therapy for therapists

Giving therapists the resources to pursue their own therapeutic treatment helps prevent burnout. Besides that, it aids personal and professional growth—a win for them, and a win for your group practice.

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—

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Just getting your group practice off the ground? Check out our state-by-state hiring guide for therapy practices.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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