Rebecca Boartfield
Tim Twigg
Understanding wage and hour overtime rules (both federal and state) is important in any well-run business. Unfortunately, a common and costly wage and hour mistake made by dentists involves the failure to correctly pay overtime.
In most states, the overtime “trigger” is 40 hours in a week. This means that employees receive one and a half times their regular hourly rate of pay for any hours worked over 40 during a workweek. Some states have daily overtime triggers, which means employees receive overtime pay when the hours worked in a day exceed the defined daily limit.
We find that the mistakes employers make regarding overtime stem from one or more of the myths about overtime.
Myth 1:
Salaried employees are not entitled to overtime pay.
The Fair Labor Standards Act, which regulates wage and hour laws, classifies employees into two categories: exempt and nonexempt. (Exempt employees are the only classification of employees who do not earn overtime. “Salaried” is not a category for overtime purposes.) The requirements for exempt status are such that most, if not all, dental employees will not qualify and are therefore nonexempt. Nonexempt employees can be paid a salary, a daily rate, or an hourly rate. Regardless of how wages are paid, nonexempt employees are entitled to overtime pay at all times.
Myth 2:
Employees who don’t get approval to work overtime don’t have to be paid for it.
Regardless of whether or not the work was permitted, you must pay when overtime work has been performed. While you can’t mess with employees’ pay, you can discipline them for failing to follow proper procedures. Clearly communicate to your employees their schedules and your attitude about them working overtime. If working overtime is not permissible, make this clear and require employees to get your approval prior to working overtime. Once employees understand your expectations, then a failure to follow your guidelines should result in disciplinary action, but not paying them is not an option.
Myth 3:
If their overtime is not included on their time sheets, they don’t get the extra pay.
Unfortunately, the burden is on employers to prove that employees were paid properly. Relying strictly on time sheets may not be enough evidence if the Department of Labor (DOL) is investigating a complaint against you. The DOL will try to determine if there is other evidence present (such as your appointment book) at the time the employee’s wages were paid to determine whether the employer knew or should have known that overtime was worked and didn’t pay for it. Be sure you verify with the employee that his or her time card is correct and includes all overtime hours in order to pay the person correctly the first time.
Myth 4:
Employees can choose time off instead of overtime pay if that’s what they want.
At this time, comp time, or time off in lieu of paying overtime, is not permitted in the private sector.
Myth 5:
When staff is paid overtime for any time they work more than 40 hours in a week, they need not be paid for the daily overtime hours required by state regulations.
Employers who are covered by daily overtime regulations in their state must pay overtime for any time worked more than the daily limit and/or 40 hours in a workweek. One does not eliminate the other. To avoid duplicating or pyramiding overtime, most DOL agencies provide that the employee must be paid overtime for all hours in the workweek in excess of the applicable daily maximum or in excess of the applicable weekly maximum, whichever is greater.
Remember the adage, “If it seems too good to be true, it probably is”? This is true of any solution to overtime pay that you may have heard about. The fact is that both federal and state governments want employees to be paid a premium for working beyond either weekly or daily overtime definitions. The government doesn’t make it easy to get out of it, ever. When in doubt, pay it, and don’t believe anyone who thinks they have a great solution for getting out of overtime without verifying their information first. It could very well be a very costly mistake.
Tim Twigg is the president of Bent Ericksen & Associates and Rebecca Boartfield is an HR compliance consultant. For more than 30 years, the company has been a leading authority in human resources and personnel issues, helping dentists successfully deal with ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more, call (800) 679-2760 or visit bentericksen.com.
