Making Staff Nonexempt

November 1, 2007

I am a surgeon in solo practice with three employees. All of my staff are on salary. The MA who also does front-office work is chronically late and often needs to leave early. I read in a recent article in Physicians Practice that it’s not up to me whether my staff are exempt or nonexempt and figure my employees should actually be paid hourly. Is that right? Plus, I currently give all my staff every third Friday afternoon off without pay and pay them for holidays. I’d like to stop the Fridays off. What do I need to do?

Question: I am a surgeon in solo practice with three employees. All of my staff are on salary. The MA who also does front-office work is chronically late and often needs to leave early. I read in a recent article in Physicians Practice that it’s not up to me whether my staff are exempt or nonexempt and figure my employees should actually be paid hourly. Is that right? Plus, I currently give all my staff every third Friday afternoon off without pay and pay them for holidays. I’d like to stop the Fridays off. What do I need to do?

Answer: All your staff members probably qualify as nonexempt employees. “Nonexempt” means the employee is not exempt from the Fair Labor Standards Act of 1938 (FLSA), which requires a minimum wage and overtime pay. Generally, all staff in a medical practice are nonexempt - and must be paid at least 1.5 times their regular rates of pay for all hours they work in addition to a 40-hour workweek.

So I’d switch them all to an hourly wage and pay them based on time worked, which you should track closely and pay time-and-a-half for overtime. Then, any hours they don’t work, and which are not designated paid holiday/vacation/sick days, are unpaid. And if an employee arrives late or leaves early, she doesn’t get paid for the time she isn’t there (whether you want to put up with that is another issue).

You set the hours, so if you want them to work Fridays, you can just say that. I’d give them a month’s notice so they can adjust their schedules. You’ll just want to be sensitive about announcing the change. You might even play out for employees what their actual salary will probably look like. Also, make sure your employment contracts with staff, if they exist, don’t bind you in any way.