A widespread myth regarding the FLSA is that employees who are “on salary” do not need to be paid overtime. This misunderstanding of the law creates a significant risk that healthcare entities may be violating the law by failing to pay their employees overtime merely because they are salaried. While being paid on a salary basis is a requirement for a healthcare employee to be exempt from overtime, the employee’s duties must also qualify for one of the FLSA exemptions, which, for healthcare workers, is most often the “learned professional” exemption.
In order to qualify for the learned professional exemption, an employee must be paid a minimum of $684 per week or $35,568 annually on a salary basis. In addition, the employee’s primary duty must be the performance of work requiring advanced knowledge in a field of science or learning, and the advanced knowledge must customarily be acquired through a prolonged course of instruction. Work requiring “advanced knowledge” is work that is predominantly intellectual in character and which requires the exercise of discretion and judgment.
These requirements can be easily applied to some employees in a healthcare setting, such as a physician (generally exempt) on one hand, and a medical records clerk on the other (non-exempt). The exemptions applicability to other positions at a healthcare facility is not as clear-cut. Generally, a registered nurse, who must complete multiple years of training and education and is subject to examination by a state licensing board is exempt from overtime payment under the FLSA. Conversely, a licensed practical nurse or a medical aide would generally not be exempt from overtime even if paid on a salary basis. Nurse practitioners, who generally undergo a higher level of training than RNs, would generally be exempt if they are, in fact, practicing medicine. Similarly, physician assistants who have completed a four-year course of study including graduating from an accredited PA program and who have received commission certification, are generally exempt when actually practicing medicine. Medical technologists who have completed a total of four years of study including a year at an accredited medical technology school also may be exempt. However, the mere fact that an employee such as an x-ray technician or ultrasound technician is regularly involved in the use of medical technology is insufficient alone to meet the requirements of the exemption even if earning a salary. A registered dietitian working in a clinical setting who is responsible for counseling individuals with health problems, such as patients with diabetes or dialysis patients, would also generally be exempt from overtime if paid on a salary basis.
If you are concerned that you may have incorrectly classified a healthcare worker as exempt from overtime, ask the following three questions: (1) Is the employee being paid a salary of at least $684 per week or $35,568 annually? (2) Is the employee performing a job for which they needed to complete a significant number of years of education and that is subject to oversight by a licensing board? (3) Is the employee permitted to exercise judgment and discretion in the performance of their job? If an employer cannot definitively answer “Yes” to each of these questions, there is a distinct possibility that they have misclassified the employee.
Correctly applying the learned professional exemption can be challenging, while misapplying it can have significant and expensive consequences. If you own or are an administrator of a healthcare entity and need guidance as to how to classify employees, the lawyers at Luchansky Law are here to help. Call us at (410) 522-1020.