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How to steer clear of potential labor problems


As an employer, how you fire, hire, or even pay an employee can be scrutinized under labor laws. Whether you have one employee or a dozen, being familiar with-and knowing how to comply with-labor laws will add an extra layer of critical protection to your practice.

The day that you hired your first employee was the day that you took on an entirely new set of responsibilities and risks. Now, whether you have one employee or a dozen, being familiar with-and knowing how to comply with-labor laws will add an extra layer of critical protection to your practice.

If you've been in practice for a while, you're probably well aware that modern labor laws are designed strictly for the protection of workers, not their employers. That's why it's so important for you to be familiar with potential mistakes that can cause you sleepless nights and catastrophic losses. All it takes is a claim that you have violated one or more labor laws to set in motion a series of costly events.

Following are some areas that hold potential problems for physicians.

For the most part, minimum wage laws won't be a problem with your employees. However, if you use entry-level workers in your office, you must be certain that you are satisfying federal and state minimum wage requirements.

Federal minimum wage laws are contained in the Fair Labor Standards Act (FLSA). The FLSA applies to employees of practices that do at least $500,000 in business a year. Minimum wage provisions of the Act are regulated by the U.S. Wage and Hour Division (WHD). At the time of this writing, the minimum wage is $5.85 per hour. That will rise to $6.55 per hour, effective July 24. On July 24, 2009, the minimum wage will rise to $7.25 per hour.

Keep in mind that many states have their own minimum wage and labor laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.

Overtime pay

Except for employees who are specifically exempted under FLSA regulations (usually executive and administrative personnel), you must pay overtime for any hours worked in excess of 40 hours in a workweek. The overtime rate must be at least time and one-half the regular pay rate.

Be aware, however, that FLSA regulations do not require overtime pay for work on Saturdays, Sundays, or holidays, provided that the week's total is 40 hours or less. Extra pay for working weekends, holidays, or nights is a matter of agreement between the employer and the employee.

The Department of Labor (DOL) enforces the Fair Labor Standards Act, which sets basic minimum wage and overtime pay standards. You can learn more about these requirements at the DOL Web site, http://www.dol.gov/.

On the clock or off the clock

Compensable hours may seem like an obscure technical term, but failure to understand its significance could lead to a nasty problem. Consider this hypothetical situation: Twice a week, Dr. Smith runs out at lunch time to take care of errands. She always asks receptionist Brown to answer the phone while she's gone. Brown, on her own lunch hour, is happy to oblige.

By law, the lunch hours during which Brown performs these duties are compensable hours-time for which she must be paid because she was not totally relieved from duty.

Another potential pitfall in this area involves the employee who doesn't mind occasionally working after normal quitting time in order to help take care of an emergency. She doesn't put in for that time because she's conscientious. Those hours, too, are legally compensable hours. Your failure to include them as hours worked, even if the employee doesn't request payment, could lead to trouble down the road if an employee or former employee files an unfair labor charge.

Normal coffee breaks and meal periods must also be included as hours worked. Training time is another area of possible misunderstanding. On-the-job training must be included in compensable hours.

An exception to this rule is time spent at lectures or training programs, provided that attendance by the employee is entirely voluntary, takes place outside of normal working hours, and does not involve any actual work for the employer.

If your practice comes under FLSA regulations, you are required to display an official FLSA poster outlining FLSA provisions. You can obtain a poster at no charge from your local WHD office or by calling toll-free at 866/487-9243.

While there is no required format, every covered employer is required by law to keep complete and accurate records of hours worked by every non-exempt employee. The records should be retained at the place of employment for at least 2 years and they must be open to inspection by DOL representatives.

As far as timekeeping records are concerned, you may use any method you choose. Whether your system involves a time clock or manually written records, the most important requirement is that they be complete and accurate.

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