Workers in the healthcare industry in every state are covered by federal overtime pay laws under the Fair Labor Standards Act. Some states have enacted overtime pay laws which also cover these workers. As a general rule, employers must follow the overtime pay laws that are most beneficial to their workers. These laws apply to all types of healthcare businesses such as hospitals, clinics and home health agencies, as well as facilities providing convalescent, skilled nursing and residential care.
The FLSA requires workers to be paid one-and-a-half times their hourly rate of pay for every hour worked over 40 hours in a week. The work week is a fixed period of seven days, but is not required to be the same as the calendar week. In Alaska, California and Nevada, overtime pay is also required for time worked after eight hours in a day. Colorado requires overtime pay for time worked after working 12 hours in a day. As a general rule, employers cannot average a worker's hours over a two-week period or more to determine overtime pay.
Employers in the healthcare industry are given the option of using an alternate overtime pay system under the FLSA, commonly referred to as "8 and 80 Overtime System." Rather than using seven consecutive days as the work period, the 8 and 80 overtime system uses a work period of 14 consecutive days. Under this system, workers are entitled to overtime pay in two instances -- after working more than eight hours in one day and after working more than 80 hours in a 14-day period. Both the employer and workers must agree to the system before it can be used.
The FLSA requires employers to calculate overtime pay using a worker’s regular hourly rate, which can be no less than the federal minimum wage. As of August 2013, the federal minimum wage is $7.25 per hour. However, if a state's minimum wage is higher than the federal minimum, such as in Arizona -- where it is $7.80 per hour -- the employer must use the higher rate. According to the U.S. Department of Labor, employers in the healthcare industry tend to run afoul of overtime pay laws and the minimum wage requirement by not properly accounting for all of a worker's hours. For example, such problems usually occur when a worker’s meal break is frequently interrupted with a work request, whether by patients or facility managers. The interrupted meal break must be counted as work time.
Some employees are exempt from the FLSA overtime pay laws. The categories of exemptions include executive, administrative, professional, computer and outside sales employees. However, an employee's job title alone does not determine whether the exemption applies. To be exempt from overtime pay, an employee's job duties and compensation must meet specific requirements. For example, the professional exemption requires that the employee's rate of pay be $455 per week or more; his primary duties require advanced knowledge with the regular use of discretion and judgment; and the advanced knowledge be in a field of science or learning obtained from prolonged study. In the healthcare industry, this exemption generally applies to physicians and some registered nurses.