HR Base Camp Roundup – March 15th, 2022

There were a number of discussions around exempt and non-exempt classification this week in HR Base Camp and CEDR’s HR Solution Center that naturally led to conversations about the legal way to pay overtime. Here’s a summary of the top HR Q&As from the past week:

  1. Are hygienists exempt from overtime requirements?
  2. Do you have to pay salaried and/or commission-based employees overtime?
  3. Can you make an employee use PTO when they miss work to go to an appointment?
  4. How do you pay a commission-based employee for their time at a convention?
  5. Can you offer a unique health expense reimbursement benefit to an employee who needs it?

 

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Are hygienists exempt from overtime requirements?

An office manager was curious about the exemption status of a dental hygienist.

Answer: The DOL routinely considers hygienists to be non-exempt regardless of how they’re paid since they won’t meet the criteria for the Professional Exemption

If you have misclassified a hygienist as exempt from overtime requirements, you are not alone. It’s a very common classification error. If you’re concerned one or more employees might be misclassified, or that you might not be paying overtime properly, a first step towards mitigation would be to perform an internal audit to make sure your employees are all classified correctly. When you and a professional audit your classifications and pay practices, this should be done confidentially.

Employee classification and wage compliance questions can be nuanced and complicated, which is one more reason to consult an HR professional to make sure you’re dotting your i’s and crossing your t’s when it comes to getting employee pay correct. Qualified and knowledgeable HR experts can also help you correct any mistakes before they become a bigger problem and liability for your practice.

 

Do you have to pay salaried and/or commission-based employees overtime?

Multiple employers were asking for clarification on how to pay overtime.

Answer: Paying employees on a salary or commission basis does not automatically mean that they are exempt from overtime requirements. Whether they need to be paid overtime or not depends on if they are properly classified as exempt or non-exempt. There are very specific criteria that an employee must meet in order to be classified as exempt. Unfortunately, misclassifications are extremely common. 

That said, it’s important to remember that all non-exempt employees must be paid overtime, regardless of how they are paid. Overtime is calculated based on an employee’s “regular rate of pay,” which includes, not just their daily or hourly rate, but also commissions, bonuses, and any other form of compensation. Depending on your state, overtime may be any hours over 40 per week or any hours over 8 per day. For a more detailed explanation, see our summary on the legal way to pay (and limit) overtime payments here

If you think you may have employees misclassified as exempt or may be incorrectly calculating overtime at your practice, work with an HR professional to make sure you’re in compliance with the laws that apply to your business.

 

Can you make an employee use PTO when they miss work to go to an appointment?

A full-time, salaried employee was missing work to take their child to various appointments. Their employer wanted to know if it was okay to make them use PTO for the missed time.

Answer: If this employee is properly classified as exempt, you can apply PTO to a partial-day absence, but you can’t deduct pay for those hours even if they run out of PTO. This means that, if they’re exempt and aren’t missing a full day and are simply leaving early/arriving late, they’ll get paid for the hours they’re out regardless of whether or not they use PTO. 

That being said, there’s no federal law that prohibits forcing employees to use their PTO. However, some states have their own laws about this, especially those with mandated sick leave laws. If there are no restrictions in your state against forced use, the decision to require PTO is up to you as the employer.

If you are unsure about the laws regarding forced use in your state, work with a qualified HR expert to determine your best course of action.

 

How do you pay a commission-based employee for attending a convention?

An employer wanted to know how they should pay a hygienist who was paid on a commission basis for their time spent at a professional training event.

Answer: Employers can typically set a different rate of pay for travel/training time that doesn’t involve the employee’s typical duties. You must notify the employee of this in advance and the pay must be at least minimum wage. We can’t help but note that hygienists are non-exempt employees and, while they can be paid a commission, employers must still establish a regular rate of pay.

This article on paying an employee different rates of pay for travel and training has additional guidance to help you determine what time you have to pay for and how to pay for it. 

As always, this guidance highlights just one of the many ways that working with a qualified HR professional can help you make sure you’re in line with your state’s laws on this subject. Some states have stricter requirements.

 

Can you offer a unique health expense reimbursement benefit to an employee who needs it?

A practice owner that did not have health benefits in place for their office wanted to know if it was okay to implement a medical reimbursement program just for a specific employee who they thought needed it.

Answer: This is a common question we see from small business owners. While the interest in creating such a reimbursement policy indicates a great deal of care for your team, offering “side deal” benefits to just one employee is not recommended. If you were to reimburse this employee for their healthcare costs or offer them a stipend but not extend the benefit to anyone else, it could set you up for discrimination claims in the future. This means that, in order to stay compliant and protect your practice, any health benefits offered should be available to all employees equally. Once more, there are specific provisions within the ACA which do not allow certain types of programs to be offered and still be tax neutral.

If you’re interested in setting up a healthcare benefit for all of your staff, it doesn’t necessarily have to be a group health plan. There are several other options available that may work better for your practice. Our online guide about healthcare options may be a good starting point.

Have an HR question you want answered? Ask CEDR’s HR experts in our private Facebook group, HR Base Camp.

Not a CEDR Member? Get additional guidance and updates in our private Facebook Group. Click to join!

Mar 14, 2022

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.
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