11/08/2017

Follow the law when paying overtime, travel, education and more


Jammed schedules, late patients, lunchtime meetings, excess overtime, early morning staff huddles, meal and rest break requirements: All can tempt practice owners to find myriad creative ways to manage employee costs. But practice owners who are unfamiliar with complex labor laws or are not paying wages appropriately could be risking an unwelcome invitation to a wage and hour claim or lawsuit.  

It is important that employers review and understand the basic principles of wage and hour laws. Employers must follow both the federal standards and California laws that provide greater protections for employees.

This article, part 2 of a two-part series, covers compensation for time worked; payment of overtime; meal and rest break requirements; and the requirements of paying for education and travel.

Compensating employees for all time worked, not just time scheduled

Although scheduled work hours for the practice may be 8 a.m. – 4:30 pm., in reality employees could be working additional hours and would therefore be entitled to be paid for those hours. Regardless of whether you, as the practice owner, know employees are working, California law stipulates that all time during which an employee is subject to the control of an employer, including all time the employee is required or permitted to work, is compensable time.

Typically, employees arrive ahead of scheduled work hours to prepare for patients, review records and participate in the morning huddle. Occasionally, they stay later due to patient delays. All time, whether approved or not, should be recorded and paid.

Additional problem areas of unrecorded work time that should be managed and compensated could include:

  • Working during meals
  • Taking work home
  • After-hour calls
  • Patient communication on handheld devices (practice or employee owned)
  • “Working interviews”

Employers should consider creating policies and practices prohibiting off-the-clock work. Policies should be specific in their definition of off-the-clock work. For example: no checking emails at home, no performing work in the morning before logging in and no running work errands after clocking out. Employers should regularly check in with employees to ensure that they are not performing off-the-clock work and discipline employees who breach the policy.

Payment of overtime: When is it owed?

California overtime law states that in the absence of an alternative workweek agreement, employers are required to compensate nonexempt employees’ overtime, whether authorized or not, as follows:

  • One and one-half times the employee’s regular rate of pay for time worked over eight hours in a workday (up to 12 hours), or over 40 hours in a workweek, or the first eight hours on the seventh consecutive workday worked in a workweek.
  • Two times the regular rate of pay for hours worked in excess of 12 hours a day or any hours over eight on the seventh consecutive day worked in a workweek.

What does this mean for practice owners? Overtime requirements apply to all types of rates for various hours worked. All nonexempt employees should accurately record their work hours and overtime calculated for “regular rate of pay.” Regular rate of pay can include a number of different wage sources, such as hourly earnings, “daily rate,” piecework earnings (i.e., per-patient compensation), non-discretionary bonuses or commissions. In no case may the regular rate of pay be less than the applicable minimum wage. 

Employers must provide sufficient rest and meal periods

California law requires that employers provide an unpaid 30-minute meal break within five hours of the beginning of a work shift, unless the workday is no more than six hours and the meal period is waived by mutual consent. 

Wage orders also require an employer to allow employees who work at least three and a half hours in a day to take two uninterrupted 10-minute paid rest breaks.

Breaks must be in the middle of each four-hour work period to the extent possible.

Failure of an employer to provide a required meal or rest break results in an obligation of the employer to pay one additional hour at the employee’s regular rate per workday for a missed or late meal break and an additional hour per day for a missed rest break. This obligation is required even if the delay is caused by an unusually busy schedule or a practice is short-staffed for any reason. These one-hour premiums constitute wages and are in addition to regular wages that are owed for any time worked, including any time worked during meal or rest breaks.

Again, the premium pay is owed only when the employer fails to provide the meal or rest break. It is not owed when the employee chooses not to take a meal or rest break.

In paying these premiums, employers should include a separate line item on the employee’s pay stub so that it is clear when the premium pay was paid. This will allow employers to easily demonstrate through payroll records that such premiums are paid when they are owed.

Dental practice owners should create schedules that allow their employees the ability to take these required breaks and empower employees to work together during the course of the workday to ensure each is able to take required breaks while maintaining a smooth patient schedule.

Additional information on meal and rest breaks is available in the CDA Practice Support resource “Sample Meal and Rest Break Policy.”

Basic rules for travel and education pay

Travel pay standards can be confusing for employers. There are both federal and state laws that apply to paying for travel and education time, and employers should follow whichever law is more favorable to the employee. The federal standard asks whether the employee’s time is spent for the benefit of the employer. In California’s labor code, the standard includes how much of the employee’s time is subject to the control of the employer.

Commute time traveling to and from the employee’s regular place of work is not compensable work time. But when an employee travels to a continuing education course required by the employer, any time beyond the regular commute time and time attending the course (minus off-duty mealtime) is compensable time.

Practice owners should do a periodic review of their employee manuals and update them when necessary to ensure practice policies are compliant with local, state and federal regulations. Such a review can include performing an audit of employee timekeeping systems to verify that employees are taking appropriate meal breaks, tracking all working hours and properly compensating employees who are entitled to overtime pay.

The complexity of managing employees is not likely to get any easier in the future. Most errors can be traced to little mistakes that could be avoided by knowing basic employment laws. Sadly, little mistakes can result in big fines. Practice owners need to keep up with nuances in wage and hour laws.

Find employment law resources in the Practice Support section of the CDA website. Read part 1 of this series, which covers the updated Wage Order 4-2001 and wage statement requirements.



Related Items

Beginning Jan. 1, 2018, employers of every size will be required to register with the Employment Development Department’s e-Services for Business and file all wage reports and employment tax returns and pay all contributions for unemployment insurance premiums electronically. The electronic filing requirements of Assembly Bill 1245 are intended to increase the accuracy and security of data and improve the processing speed of returns and payments.

Practice owners who are unfamiliar with complex labor laws or are not paying wages appropriately could be risking an unwelcome invitation to a wage and hour claim or lawsuit. It is important that employers review and understand the basic principles of wage and hour laws and follow both the federal standards and California laws that provide greater protections for employees.

Many dentists dream of opening their own practices. And while they may have spent years refining their clinical skills, they are often less familiar with the business side of dentistry. This is especially true when it comes to employment law, an area of frequent claims against dental practice owners. Dentists should heed particular caution to the rules and regulations surrounding meal and rest periods.

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