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    Tips for practices to best deal with new overtime pay rules

    Editor’s Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Carol Gibbons, RN, BSN, NHA, who is CEO of CJ Consulting, which specializes in healthcare revenue cycle management. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.


    Department of Labor changes this year are causing many healthcare businesses to reevaluate overtime requirements.

    Over the years, many employers have utilized the exempt status for many midlevel employees to manage the overtime burden more efficiently. These employees work more than 40 hours per week most of the time and their salary takes that into consideration. In exchange, they have more flexibility to adjust work hours, take time off for an appointment without using PTO and can be available after hours if needed. 


    In the news: What new rules on overtime pay mean to physician practices


    The new guidelines from the Department of Labor require that any employee who makes less than $913 per week or $47,476 annually, cannot be an exempt employee and must be paid overtime for more than 40 hours worked in a week. To further muddle the matter, a federal judge in Texas granted a preliminary injunction against the rule, putting it on hold for the time being. I am sure you have seen articles stating that you need to make changes, but the majority of providers have not even started to consider what these changes could mean to morale of employees.  

    After much discussion with both with other managers and with a labor attorney, I have developed some suggestions for my practices to guide them through the process of changing employees from exempt to non-exempt status.  

    The first step in this process is to communicate to all employees that there have been changes in the overtime guidelines involving exempt and non-exempt employees. The Department of Labor (DOL) has issued new rules on recording work time and who can qualify as exempt employees, meaning they can be paid on a salaried basis and not paid for overtime. 


    Hot topic: Should doctors extend their practice hours?


    There is a DOL fact sheet that I recommend you print and use as a discussion tool. Your communication with employees should reinforce that nothing in this rule changes the job description of any employee or changes their salary. It just means that you are now required to track actual time worked and pay overtime. 

    Emphasize that the rule changes the administrative process of documenting time worked, but does not impact job responsibilities in any way and certainly does not diminish the employee’s value to the business.

    The second step is to review your handbook. Does the handbook address that all overtime must be approved by a supervisor? If not, now is a good time to make changes to your policies, because employees who were previously paid by salary may take advantage of their new status to work extra hours to improve their biweekly paycheck.    

    Next: Should you increase salaries instead of paying overtime?

    Carol Gibbons RN, BSN, NHA
    Carol Gibbons brings 30 years of nursing and management experience to CJ Consulting to assist healthcare businesses in revenue cycle ...


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