Dental Management: Paying Employees Overtime

Dental management: paying employees for overtime workHow Classifications Affect Payment of Overtime

If your first thought was, “This doesn’t apply to me. I don’t pay overtime,” then let’s review. All states either follow the federal Fair Labor Standards Act or the individual state’s wage and hour laws. All wage and hour laws are dependent on classifying your employees correctly as exempt (from wage and hour law) or non-exempt (not exempt from wage and hour law).

With a few exceptions, nearly all employees in dental offices are non-exempt with the exception of the doctor(s), associates and office managers (if they truly manage the staff and office functions). Almost everyone else is non-exempt.

There are some long-held traditions in the dental industry that can get you in trouble under certain conditions:

  • Paying hygienists on a per diem basis
  • Paying everyone on a salary basis to make it easy to do payroll

Let’s examine the pitfalls by considering a typical dental practice as an example. Let’s assume that ABC Practice starts the workday at 7:45 am with morning huddle and sees their first patient at 8:00 am. They end their day at some time between 5:00 and 5:30 pm. The team takes a one-hour lunch. The total hours worked each day is somewhere between 8 and 8¾ hours Monday through Thursday each week.

Most states require that you pay overtime when someone works over 40 hours in a workweek. (A workweek is seven 24-hour days and usually starts at 12:01 on Sunday morning and ends at midnight Saturday night.) Forty hours is standard, with only a few states as exceptions (for example, in Kansas it’s 46 hours, and in Minnesota it’s 48). In several states (CA, NV, and AK), overtime accumulates past 8 hours in a day and then over 40 hours in a workweek.

If you are in one of the majority of states that pay overtime over 40 hours in a workweek, and you have the same type of schedule as ABC Practice, then your employees would work less than 40 hours per week, and they would generally not be eligible for overtime. But in the states where overtime is figured over 8 hours in a day, the employees at ABC Practice would likely incur overtime frequently.

What are the traps that catch dentists, no matter what their state laws are?

  • Not keeping accurate time records. This can be done on your dental software as well as using other methods. You won’t be able to prove someone is owed—or not owed–overtime without accurate time records. And it is legally required.
  • Employees are not required to clock out for lunch. This adds an hour every day.
  • Hygienists are not required to keep time records. This means that all their hours are counted as work hours, including lunch.

More on these issues in a future article.

Barbara Freet, PHRBarbara Freet, PHR is the President of Human Resource Advisors in Lafayette, CA. She has been working with dental practices in all 50 states for over 14 years and has owned and managed her HR consulting firm for over 20 years. If you have questions regarding any part of the employment relationship, please call Barbara or her staff at (925) 283-7305.

Working Interviews: Dentists, Beware the Pitfalls!

Human resource advisor Barbara Freet, PHR presents a special feature about how working interviews for hiring dental professionals can be a lot more complicated than it might seem…

Working interviews for dental professionalsI am frequently asked questions about issues stemming from working interviews. The concept seems so simple, and it’s one that is embedded in the dental industry. However, in practice, it can turn out to be quite complex.

First of all, lots of doctors don’t realize that asking someone to do actual work means they must be paid. I can’t tell you how many times doctors have called me in astonishment when someone who came in for a working interview turned around and took them to the Labor Commissioner because they weren’t paid.

Then an argument commences about how much the interviewee should be paid. The applicant may expect to be paid as much as they asked for in the interview (or, if not discussed, the amount the person thinks they deserve). The doctor is often under the impression that it should be less because it is part of the interviewing process. Then the battle begins. Usually the doctor loses, because he or she never gave the candidate anything in writing about what to expect.

Next, if doctors have applicants doing working interviews and do pay them, then they become employees of the practice. If they are working on “real” patients and seeing patient records (Personal Health Information — PHI under HIPAA), the doctor shouldn’t be surprised to find the practice liable for mistakes made by job candidates.

Because this is an industry standard, I suggest following a few simple guidelines. I have talked to my labor attorney about this, and this is what he suggests as well.

  • Go through all the steps in the interview process before having someone come in for a working interview. That includes interview AND REFERENCE CHECKS. We all know that people are on their best behavior during interviews and working interviews, but that is why references should have been thoroughly checked before this step. Often this isn’t done because doctors say, “She did great in the working interview…I never knew such a good assistant could be so awful to work with!”
  • Give the candidate a letter telling them one of two things: 1) this is a “voluntary unpaid part of the interview process,” or 2) this is a paid day at x rate of pay. The letter makes no promises of employment and is clear about the hours the interviewee should expect to be in the office. (I have a template of such a letter.)
  • I like the “voluntary unpaid part of the interview process” option, but it has to be done properly. The applicant has to come into the office for less than a full day, e.g. 5 hours. S/he should be looking at a “dummy chart” that has been prepared ahead of time and is used for this purpose. It can have many things in it that the person has to address, and it can be a mess. This allows the doctor and team to compare “apples to apples” with all candidates, as they all deal with this file (or files). If the doctor wants the applicant to exhibit their clinical skills, it would be better if they did so on team members and not patients. The team member is going to be able to judge the applicant’s “touch” personally while the doctor and any assisting team members see what s/he does as well. With proper planning, this can be accomplished effectively. (I understand that doctors don’t like to give up production hours, but an effective interview is an investment in the practice.)
  • If the doctor pays for the day at the hourly rate stated in the letter, then the applicant should be paid that very day in full. If s/he is scheduled to be there more than one day, then the wages paid may go over the cutoff for not taking out taxes (which is still $600). If you pay the candidate over $600, then the applicant is considered an employee, even if briefly! If they are under the IRS amount, then a 1099 must be sent at the end of the year.
  • The next issue that commonly comes up is this: If the person is considered an employee, then does the doctor have to pay Unemployment Insurance even if they are there only a day or two? The answer is probably no. But how UI works will be handled in another article.

If you have questions specific to this or other issues, please give us a call. We have dental clients in every state and will be happy to assist you.

Dental human resource advisorsBarbara Freet, PHR is the President of Human Resource Advisors in Lafayette, CA. She has been working with dental practices in all 50 states for over 14 years and has owned and managed her HR consulting firm for over 20 years. If you have questions regarding any part of the employment relationship, please call Barbara or her staff at (925) 283-7305.

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