On July 6th, the Department of Labor announced a proposed rule that would extend overtime protections to nearly 5 million white-collar workers within the first year of its implementation.
What impact might this have on a medical or dental practice?
Currently, if you pay your office manager, nurse, hygienist, or another exempt employee a salary, you don’t have to pay time and a half for hours worked in excess of forty hours per week.
In order for the overtime exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.
An exemption is available for employees that meet the conditions of working as an executive, administrative personnel, licensed professional, computer professional, outside salesperson, or a highly compensated employee.
In addition to meeting certain conditions to be defined as working in one of these categories, there are also minimum salary limits defined by the Fair Labor Standards Act (FLSA).
The factor that will impact your healthcare business relates to the change in the allowable base salary that will need to be paid to be exempt from overtime pay.
The minimum pay is slated to go from $23,660 to $50,440 – and this number will increase annually each year.
The salary limit for being considered a “highly compensated” employee will also increase.
The Department of Labor’s goal is to ensure more workers have the right to receive overtime pay. The proposed rules are currently in a commentary state – it’s expected that the rules will be finalized early next year.
3 Action Steps to Take Now
- Review current salary amounts. Request that your employees, with a salary level below $50,440, track their hours during their typical work week for a period of time. If the employee is working more than 40 hours per week, you may need to increase the salary level when the FLSA rules go into effect to keep this employee exempt from overtime pay. Or, you could convert them to an hourly paid employee and pay overtime for the hours worked over forty in one week.
- Evaluate your job descriptions. First of all, if you don’t have a job description for salaried employees, you should implement one – in fact, you should have a job description for every employee – including you, the doctor. Employees for whom you pay a salary and wish to be exempt from overtime pay, even if they are paid over the newly proposed salary limits, must be working in your office as described in one of the exempted job categories found in the FSLA regulations. For your information, I have enclosed a summarized fact sheet of the regulations – or, you can find them here online.
- Check your personnel policy manual. Do you have policies established and communicated to your team regarding overtime pay? Be sure that your personnel policy manual includes who will be eligible for overtime and how overtime is approved.
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