Physicians Practice Pearls: Don’t Let Overtime Take Over

May 1, 2008

Overtime pay is expensive. Here’s how to keep it under control.


I’m often asked how practices can control overtime pay. It’s so expensive.

Overtime pay is one and one half times the regular hourly rate, not two times or more. It is paid for hours worked in excess of 40 in a defined workweek - say, from 7 a.m. Monday until 6:59 a.m. the following Monday. Holiday, vacation, and sick leave do not qualify as hours worked and therefore do not result in overtime pay.

Salaried employees are exempt from overtime, but they must qualify for administrative or professional exemption status - usually 80 percent of their time has to be spent doing specific administrative or professional work. Any “comp” time granted for overtime must be given in the same week, which will then be recognized as normal pay.

So, how can you control the costs related to overtime? Here are some ideas.

  • Make it up on the back end. If one of your employees incurs two hours of overtime on Monday, give him two hours of comp time later that week. Track work hours closely to ensure no surprises on Friday. Develop a flex-time strategy.

  • Manage lunch breaks so that employees are not eating at their desks while answering phones and so on. Instead, give them time away from the work place. Some practices allow an hour, others 30 minutes; decide what’s best for your practice.

  • Stick to your schedule. Make patient activity fit within the 40-hour week. Then start and end clinic sessions on time.

  • Do only today’s work today. If there is work that can be put off, then put it off. This is not procrastination; it is prioritizing work.

  • Expect some overtime and deal with it. Some clinic days will become very busy due to flu season and the like. For those times, it will be necessary for some hourly employees to stay late. Just plan for it in your budget.

  • Review the workload of each employee and her ability to accomplish the level of work expected. About 25 percent of work performed in offices is either rework or unnecessary work. Take a serious look at work habits and patterns in terms of efficiency.

  • Supply needed tools. Ensure that adequate systems, procedures, and tools are available so staff can get their work done quickly. Eighty-five percent of the problems with staff are system problems, not those of an individual employee.

  • Identify patterns of overtime. Note certain days of the week, with certain doctors’ and employees’ habits. Ponder what the pattern is telling you about work performance, either good or bad, and address the issue accordingly.

  • Offer job sharing for key jobs by using two part-time employees to fill one position. For example, you may have two individuals older than 65 who have experience as receptionists and who both want to work, but not full-time. Let them set their schedule as to who works when, ensuring that you are covered during your business hours, five days a week.

Owen Dahl, FACHE, CHBC,

is a nationally recognized medical practice management consultant with over 24 years of experience in consulting for and managing medical practices, and he is the author of “Think Business! Medical Practice Quality, Efficiency, Profits.” He can be reached at odahl@comcast.net.

This article originally appeared in the May 2008 issue of

Physicians Practice.