A small article about trauma in the journal JAMA last week has big implications about the business of hospital finances. In short, it shows that the U.S. spends more on...
FLSA is the Fair Labor Standards Act. This is about to have a huge impact on hospital employees who work part-time or who job-share. The FLSA was originally drafted in 1932 by Senator Hugo Black. It established the 40-hour work week, designated that overtime had to be paid at time and a half, and directed that children under age 16 cannot work during school hours. Every few years, there are amendments passed by Congress and there are rule changes enacted by the Department of Labor.
The newest rule change will go into effect on December 1, 2016 and will require anyone making less than $47,476 per year to get paid overtime if they exceed their work hours. On the surface, this doesn’t sound too bad – workers making relatively lower incomes cannot be taken advantage of by being required to work excessively long. But here’s the catch: it doesn’t matter if you are a full-time employee or a part-time employee. So, if an employee is part-time at 50% and in a position that would normally pay a salary of $94,000 per year, that employee now needs to be paid overtime if they work more than 20 hours per week since their annual income is $47,000.
The implication of this is that they now have to be paid hourly (including clocking in and clocking out) rather than being paid an annual fixed salary. But here is the problem… you can’t just change one employee to hourly pay, you have to change the job title to hourly pay which means that you have to change all of the employees with that particular job from salaried to hourly. That’s a problem because most of the hospital employees who went to graduate school to learn a profession want to be treated like they are in a profession and get a salary.
So you have a few options, none of which is great:
- Increase the employee’s part-time percentage. The problem with that is that is that some employees only want to work 50% time and may not be very happy if they are required to go to 70% time.
- Change the job title from salaried to hourly. The problem with that is that you could lose those full-time employees in that job title who want to get a salary rather than be paid hourly.
- Change the employee to your contingent pool. The problem with that is that the employee may no longer qualify for full fringe benefits.
If you have 2 employees who are job-sharing a single position (for example, because they have children at home and want to work half-time at this point in their lives), then they are particularly vulnerable because it may become too difficult and expensive for an employer to permit job-sharing.
I certainly don’t have the solution but I do worry that in a hospital, where a lot of the employees are women, that the FLSA rule change may inadvertently restrict part-time employment options for them. Some of the best and most talented employees I work with are part-time. We agree to hire them part-time because they are so good and 2 fantastic 50% employees are a lot better than 1 mediocre 100% employee.
We’ll find a way to make it work because we can’t afford to lose many of our part-time employees. Hopefully, in the future, the Department of labor will make another rule change to define the $47,476 as applying to a 100% full-time employee so that we do not inadvertently create barriers to part-time employment.
September 17, 2016