To pay or not to pay (overtime)
By Steven Conway, DC, DACBOH, JD, Esq.

After taking my staff to a national chiropractic convention, which happened to be on a weekend, one employee demanded I pay her overtime for the hours she was away. Since I paid for everything else, do I have to pay her overtime for attending the seminar?

The quick answer to your question is — it depends. It depends on her job classification and how many hours she worked during the week prior to it.

The basic rule to follow is this: Hourly employees must be paid overtime for any hours worked over 40 in one week, and salaried employees are exempt from overtime pay. However, a few exceptions to this general rule exist.

Federal and state regulations regulate employee classification and overtime exemptions. All businesses are required to follow the one that is most beneficial to the employee if there is a conflict between the two. In 2004, the federal government made modifications to job classifications, which may also have an impact in the way you classify your staff.

The problem in many offices is this: The CA receives a salary position classification without following the established guidelines to see if he or she actually qualifies. The perceived benefit to classifying all of your staff as salaried is there would be no overtime expenses. However, to properly claim the overtime salary exemption, the work performed must fit into the rules provided in the regulations.

Job titles alone do not determine exemption.

In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements outlined in the Department of Labor's regulations. Violations can lead to penalties and payments for lost wages.

Section 13(a)(1) of the Fair Labor Standards Act (FLSA) provides the information related to exemptions from overtime pay for employees employed as bona fide executive, administrative, professional, and outside sales employees.¹

The most common classification for salary exemption applicable to CAs within the chiropractic office would be the administrative professional. However, to qualify for the administrative employee exemption, all of the following must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;

• The employee's primary duty must be the performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer's customers; and

• The employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.²

The first criteria is pretty clear: You either pay that amount ($455) or not. The other two are somewhat subjective, but the wiggle room for interpretation is very small and will always defer to the employee's benefit, if challenged.

In reviewing the second (nonmanual labor), it appears to generally fit within the CA's delegated duties within the chiropractic office and should not be a major factor in the classification process.

The third one (discretion) appears to be the major factor in determining the CA's job classification. To understand the department's interpretation of the phrase "exercise of discretion and independent judgment," visit the Department of Labor's Web site (www.dol.gov) and click on "wages."

If you determine your CA is an hourly employee and overtime is due, there is one last factor to consider — the proper calculation of actual hours worked. You are not required to pay for all of the hours during the weekend seminar.

Properly calculate hours associated with travel and seminar attendance and exclude hours associated with meals or sleeping. Your local attorney can assist you with the rules and regulations associated with travel time in your state as there are differences between driving and flying. Once you have the basics, it will be easy to maintain the policies for future seminar trips.

It is your responsibility to properly classify your staff as salary or hourly based upon federal and state regulations. The classification of your staff, along with the correct calculations of hours worked in a specific week, will determine the requirement for paying seminar overtime or not.

Steven Conway, DC, DACBOH, JD, Esq., is a partner in True North Chiropractic Consultants LLC, which provides guidance and ethical solutions to the barriers found in chiropractic practices. He can be contacted through truenorthchiropracticconsultants.com or by e-mail at chirolaw@aol.com.

DISCLAIMER: This column is provided for educational purposes only. The accuracy or timeliness of the information presented is not warranted. The information is not presented as legal advice and no attorney-client relationship is established.

References
¹ Fair Labor Standards Act as defined by Regulations, 29 CFR Part 541. Section 13(a)(1)

² Fair Labor Standards Act as defined by Regulations, 29 CFR Part 541. Section 13(a)(1)