Trimming the fat: End overtime use - and abuse

June 8, 2009

If staff overtime is common in your dermatology practice, it?s time to take note. Overtime is costly, and can be abused.

If staff overtime is common in your dermatology practice, it’s time to take note. Overtime is costly, and can be abused.

Discover when you’re legally obligated to pay overtime, as well as strategies to end this expense without negatively impacting your practice.

Overtime shouldn’t be a fact of life, but many busy dermatology practices find office hours routinely run late. When patient care spills past stopping time, you aren’t in a position to let all of your staff go home. But this necessity means staff overtime, which can be quite expensive. Indeed, if only four staff members are kept an hour beyond their full-time work schedule every day, you can rack up more than $10,000 in overtime costs per year.

Most dermatologists consider staff overtime a cost of doing business, but the reality is that even a busy practice can run without overtime while accommodating patients and delivering exceptional service.Here are some ways to meet the needs of patients and control your bottom line.


Know the facts

Understand wage laws related to overtime. If the employee qualifies for overtime, pay it. The pay must be at least one and one-half times the employee’s regular rate of pay.

You can’t use ‘time off in lieu’ of overtime (sometime abbreviated ‘TOIL’) to get out of your obligation.Time off in lieu of overtime is currently prohibited for private sector workers covered by overtime laws. If you don’t follow the law, you may find yourself getting a call from your state’s labor law regulators, an employee’s attorney, or both.


Know the terminology

‘Covered nonexempt employees’ are just that - not exempt from getting overtime. According to the federal Department of Labor’s Wage and Hour Division, ‘covered nonexempt employees’ must receive overtime pay for hours worked over 40 hours in a workweek.

Your office manager - and potentially other positions - may or may not fall under these guidelines. Just calling someone ’manager’ doesn’t necessarily exempt that person from federal or state overtime laws.


Define your workweek

An employee’s workweek is a fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods.

Within those parameters, your practice can define its own workweek. It need not coincide with the calendar week; it may begin and end on any day and at any hour of the day.Your practice cannot change how you define the workweek week-to-week to avoid paying overtime. Furthermore, averaging of hours over two weeks is not permitted.


Avoid misconceptions

Although federal law defines when you have to pay overtime and to whom, it does not restrict hours. Except for medical residents, transportation workers and certain others, there is no limit on the number of hours that employees 16 years or older may work in any workweek.

The Fair Labor Standards Act does not require overtime pay for work on weekends, holidays, or regular days of rest unless overtime is worked on those days. Although it’s not legally required, it’s not uncommon for dermatology practices to pay extra for weekend and holiday work.


Pay the right rate

Some states also have overtime laws. Where an employee is subject to both state and federal overtime laws, the employee is entitled to the overtime at whichever is the higher-paying standard.


Avoid abuse

Recognize that overtime can be abused. Overtime is lucrative, so it’s not uncommon to see employees interested in working enough hours to get it.

In a pinch, such as end-of-month charge entry, it can be quite valuable to have employees who are able and willing to put in a few hours of overtime. But don’t allow workers to abuse overtime by stretching an eight-hour day into 10, which, at time-and-a-half, means getting paid for 11 hours.

An effective time and attendance system is good business policy, and it can help you manage overtime. You can use the familiar punch clocks, but more convenient systems using biometric time clocks are now available at an affordable price.


Require approval

The most effective way to manage overtime is to establish a culture in which it is permitted only upon approval from a supervisor.

Give supervisors clear direction about when overtime is justified. Require that they document all overtime hours accrued each pay period - and the reason for them.Top-level management should review the volume and reason for overtime at least every quarter.


Charge back

Consider charging back costs to dermatologists who create overtime, for example, by routinely running behind or turning in charges only at the end of the month, which requires extra hours of support staff overtime. Although some may resist, it’s unfair for the entire practice to bear the cost of one dermatologist’s poor work habits.


Be creative

Many dermatology practices are expanding beyond traditional business hours, and these non-standard office hours can actually help avoid overtime. Seven a.m. start times coupled with appointments over the lunch hour are commonplace, particularly in urban markets.

These expanded hours need not mean overtime; actually, they can eliminate it. Let the expanded hours drive a new staffing model altogether.

Consider four 10-hour days, or assigning nine days of work with eight-and-three-quarters days in a pay period, with one day off. These are particularly appealing to staff who have long commutes.

Another alternative is to work the 40 hours in four-and-a-half days, with Friday afternoons off. If patient demand doesn’t allow you to drop a half-day a week year round, try the Fridays off schedule during the summer only.

These creative hours may do more than allow you to stem overtime, they can also mean a happier - and more productive - staff.


Schedule thoughtfully

At a minimum, pay careful attention to scheduling. You may have an employee scheduled to leave at 3 p.m. on Friday to avoid overtime. But what if she’s consistently staffed to be the only nurse available for your busiest physician during his Friday afternoon office hours? If so, you’re contributing to your own problem.

If overtime is plaguing your dermatology practice, getting a new time clock or changing your office hours may help.

Since you’re paying 150 percent per hour for this extra work, hiring someone on a part-time basis to fill this need may actually save your practice money. If there’s simply too much work to do, it may be time to hire more staff to do it. DT

For more information:

www.dol.gov/esa/whd/regs/compliance/whdfs23.pdf

stat http://www.dol.gov/esa/whd/state/state.htmes