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 other exempt employee, a salary, you don’t have to pay time and 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 sales person, 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 increased.
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
3. 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.
Mike DeVries is a CERTIFIED FINANCIAL PLANNER ™, Enrolled Agent, and a Certified Healthcare Business Consultant focusing on helping healthcare professionals. If you would like to learn more about becoming a client, contact Mike at www.vmde.com.