Do you know your rights and responsibilities?
By Julie C. Whiteley, RDH
I was recently involved in a conversation among dental hygienists regarding overtime pay. Opinions varied widely about what was “right,” and participants described differences in employers’ pay practices. In my experience, breaches of employment law are not always intentional. In small businesses, in particular, there is not always an expert on staff to ensure that pay practices meet legal requirements, particularly when laws and situations can be difficult to interpret.
As professionals, we need to be aware of our rights and responsibilities. My intent here is to provide clarification and a point of reference for situations that may need further dialogue or amendment.
“Is that legal?”
Whenever these discussions occur, people always want to ask, “Is that legal?” But before we can delve into that question, we need to review employment law. Employment law is not always black and white, and laws can be interpreted and applied differently in different situations. Furthermore, both federal and state laws govern pay practices. Federal laws apply to all states, but individual states may have more stringent rules that supersede federal law. Additionally, contracts, policies, and agreements may be in place between an employer and employee, but a contract or policy in conflict with existing employment law is not enforceable.
Are hygienists exempt or nonexempt employees?
The Fair Labor Standards Act (FLSA) establishes federal minimum wage, overtime pay, reporting, and other labor laws. The Department of Labor administers and enforces these laws through the Wage and Hour Division.
The FLSA classifies jobs as exempt from minimum wage and overtime regulations or as nonexempt. Salaried employees are considered exempt. According to the Department of Labor, being salaried means an employee regularly receives a predetermined amount of compensation each pay period, and it is not based on the number of hours worked.1 Exempt means those employees are exempt from the requirement to be paid overtime for hours worked in excess of 40 each week.1 Employers may elect to provide benefits or perks for exempt employees who work overtime, but it is not a requirement.1
The way a job is classified has nothing to do with the employer or employee’s choice, written contract, job title, or job description. It is also not based on whether the employer elects to pay the employee a salary or by the hour. It is based on the actual duties of the job in accordance with FLSA guidelines.
The specific job duties are evaluated against exemption categories, such as executive, administrative, professional, computer, outside sales, and others. A category that could possibly apply to dental hygienists is the professional exemption. The professional exemption is described by the FLSA as follows:
“The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; the advanced knowledge must be in a field of science or learning; and the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual information.”2
Here’s the bottom line: It is illegal to have nonexempt employees who are working off the clock, even if they volunteer to do so.
There is also a salary basis requirement for any exemption. To qualify, employees must be paid no less than $455 per week.2 Adjusting this base to $913 was proposed in 2016, but at the time of this article, this new threshold has not been finalized.2
Under federal regulations, only those hygienists who have completed four academic years of study in an accredited school approved by the American Dental Association potentially qualify for professional exemption.3 I have not been able to get a clear answer to this, but the question also arises as to how much discretion hygienists can exercise independently, as many state practice regulations require hygienists to work under the supervision of a dentist. Misclassification of an employee as exempt can be costly to the employer in fines, taxes, and back pay. As mentioned previously, the application of employment law is not always clear. In areas where there is question, it is best to speak with an employment lawyer or with a representative from the Department of Labor.
Should hygienists be paid overtime?
Most practicing hygienists are considered nonexempt employees—that means eligibility for overtime. In most states, overtime is paid at a rate of time and one half for any hours worked over 40 in a workweek. A workweek is not the same as a pay period or a calendar week. An FLSA workweek is a fixed, regularly recurring period of 168 hours (seven consecutive 24-hour periods) that the employer adopts in order to maintain FLSA compliance.4 In some states, such as California, the overtime rate goes into effect for any hours worked over eight in a given day. It is wise to check with your state’s Department of Labor for the particulars in your area.
Often, nonexempt hygienists are paid at an hourly rate. Nonexempt employees, however, can be designated as commissioned or piece rate. Additionally, they can be paid as “salaried, nonexempt.” This means that the employer chooses to pay a daily, weekly, or annual salary. On a federal level, this means the employee is still entitled to overtime pay for hours worked over 40 in a week, regardless of the fact the employee is paid salary, commission, or piece rate. The rate would be calculated at time and one half times the earnings averaged per hour for the workweek.5 Bear in mind that state laws may have different parameters for daily versus weekly overtime calculations, but state law can be no less than what federal law allows. Furthermore, for every hour worked, the employee must earn at least the minimum wage for that state. There is a federal minimum wage of $7.25 per hour, but many individual states have their own minimum, which is higher than the federal.6
Does paid time off count toward overtime?
Some employees receive paid time off either as a benefit or in accordance with a state law. For example, some states have a mandatory paid sick time law. When an employee has taken paid time off during the workweek, those hours are not counted as hours worked when considering overtime.7 Here’s an example: An employee takes one paid sick day and then proceeds to work four 10-hour days the remainder of the week. Although her compensable hours are 48, those additional eight hours over 40 are to be paid at straight time. Whether hours are considered overtime is based on actual hours worked, not paid time off.
Are commissions and bonuses considered in the overtime rate?
Some hygienists receive commission or bonuses based on goals or services rendered.
Discretionary bonuses are unexpected rewards (e.g., an exemplary performance bonus, a year-end bonus based on profits, or a holiday gift). These are not considered when determining the overtime rate.
Nondiscretionary bonuses are supplemental income (e.g., a bonus promised based on meeting criteria, such as a production goal, or income associated with a commission or incentive program). These are to be considered part of “regular pay” when determining the overtime rate.8
It may be helpful to look at an example: Suppose a hygienist made $35 per hour, earned a $100 production-based bonus, and worked 43 hours in the same week.
• $35 per hour x 43 hours worked + $100 bonus = $1,605 total compensation rate before overtime
• $1,605 divided by 43 hours worked = $37.32 (regular rate by which to calculate time and one half)
• $37.32 x 1.5 = $55.98 (overtime rate)
The three hours over 40 in this example are to be paid at a rate of $55.98 per hour for that week. Again, please keep in mind that these examples are based on federal laws. Some states base overtime on a daily calculation.
Can an employer ask you to adjust your hours to avoid overtime or extra hours worked over the normal schedule?
Yes, but the off-the-clock employee cannot perform any work.
Consider hygienists who are told they are only on the clock from the time of seating the first patient to dismissing the last. We all know that there is so much more to a successful hygiene department than seeing patients. Preparing for the day, writing charts, reviewing the schedule and planned treatment, keeping equipment maintained, managing inventory, sharpening instruments, and a host of other important tasks that may vary by workplace can be tough to accomplish while balancing a packed schedule.
Furthermore, we all know that schedules do not always run on time, people are late, appointments can evolve into more than initially planned, and so on. As much as good time management is essential and using any open time well is also important, it is equally important to keep the lines of communication open. Often practice owners or managers may not be aware of the necessary “extras” that you do.
Here’s the bottom line: It is illegal to have nonexempt employees who are working off the clock, even if they volunteer to do so. If it is work that is essential to the job and needs to be done, time and resources need to be allotted for it. Nonexempt employees found to be working off the clock result in employer fines, assessments for back taxes, and back wages.
Under the FLSA, employers are not required to guarantee a certain number of hours. There may, however, be a state law or an employment agreement, written or verbal, between the employer and employee that may supersede this.9 It is always best to have any agreements in writing. Agreements can be modified as long as the changes are not in conflict with employment laws. Changes should be made in advance, communicated clearly, and done in writing.
If I receive two different pay rates, how does this affect my overtime rate?
It is legal for an employer to pay wages at different rates to the same employee for different levels of work. For example, employers can opt to pay meetings or administrative work at a rate lower than the normal rate of pay. These hours count toward overtime as hours worked. The overtime rate is a weighted average of the two pay rates for that workweek. It is also allowed, under specified conditions within the FLSA, to calculate the time and one half based on the hourly rate that was in effect when the overtime work was performed.10
In most cases, when work is allocated properly and schedules are managed well, there shouldn’t be an excess of hours to work or the need to adjust pay downward. Adjusting pay downward can be a demotivator for employees and can cause a potential increase in turnover, resulting in the loss of valuable team members and a lack of continuity in the office. Mutual respect and fair treatment go a long way toward a positive, productive working relationship. It is important to have discussions ahead of time regarding policies and circumstances to be sure both parties are comfortable and all employment laws are followed. In the case where an employee may not like an employment policy but no laws are being broken, the employee needs to decide if that position is a good fit for them. Finally, all policies and agreements are best done in writing for the protection of all involved.
Although we covered a lot of ground, this article is not all-encompassing. There is so much to employment law and compensation. My intent here was to cover some of the most frequently asked questions with regard to overtime. Ultimately, we need to be informed so that we can negotiate employment appropriately with employers. As I mentioned earlier, not all violations of pay practices are intentional. It is a very complicated area. One of the best protections besides reliable information and utilizing appropriate resources is direct dialogue in areas where we have questions. We need to feel comfortable being respectful but clear about what we know. Often the dialogue we have may provide someone else with information that they are missing, or we may learn something new.
Author’s note: Please note that this article is for general informational purposes only and is not providing legal advice. You should contact an attorney or your state labor board to obtain advice about any issues or problems.
Julie Whiteley, BS, RDH, is both a registered dental hygienist and a certified human resources specialist. She holds degrees in business administration and dental hygiene, and has worked extensively in both fields. She is also on the faculty of Massachusetts College of Pharmacy and Health Sciences University. She bridges her knowledge and experience from business, clinical hygiene, and teaching to deliver information and programs that enhance dental practices.
References
1. US Department of Labor Wage and Hour Division. Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act (FLSA). Washington, DC: US Department of Labor Wage and Hour Division; 2008.
2. US Department of Labor Wage and Hour Division. Fact Sheet #17D: Exemption for Professional Employees Under the Fair Labor Standards Act (FLSA). Washington, DC: US Department of Labor Wage and Hour Division; 2008.
3. Chapter 22: Executive, administrative, professional, computer, and outside sales exemptions. In: Department of Labor Wage and Hour Division. Department of Labor Wage and Hour Division Field Operations Handbook. Washington, DC: Department of Labor Wage and Hour Division; 2016: 22i14.
4. Calculating Overtime Pay in the United States. Society for Human Resources Management website. http://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/calculatingovertimepay.aspx. Published October 13, 2016.
5. Legal and Regulatory Issues: What Is the Meaning of ‘Salaried, Nonexempt’ Employee? Society for Human Resources Management website. http://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/whatisthemeaningofsalaried,nonexemptemployee.aspx. Published October 25, 2016.
6. HR Solutions Blog Team. Pay Rules: Commissioned and Tipped Employees. Run, Powered by ADP website. http://sbshrs.adpinfo.com/blog/pay-rules-commissioned-tipped-employees. Published February 1, 2016.
7. Overtime Pay: Must employers count holiday leave, vacation and sick leave hours taken during the workweek toward the overtime requirement? Society for Human Resources Management website. http://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/tvacationhoursttowardovertime.aspx. Published December 16, 2015.
8. Curry JL. A Wage and Hour Pitfall: Paying Bonuses to Non-Exempt Employees Can Lead to Trouble. Baker Donelson website. http://www.bakerdonelson.com/a-wage-and-hour-pitfall-paying-bonuses-to-non-exempt-employees-can-lead-to-trouble. Published March 10, 2017.
9. Kaczmarek C. Reporting-Time Pay: A Wage & Hour Winter Wonderland. Society for Human Resources Management website. http://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/reporting-time-pay.aspx. Published December 6, 2013.
10. US Department of Labor Wage and Hour Division. Fact Sheet #23: Overtime Pay Requirements of the FLSA. Washington, DC: US Department of Labor Wage and Hour Division; 2008.
11. Questions and Answers. US Department of Labor Wage and Hour Division website. http://www.dol.gov/whd/overtime/final2016/faq.htm#G1.
