ARE YOU MISCLASSIFYING YOUR PHYSICIAN ASSISTANTS? ARE PHYSICIAN'S ASSISTANTS ENTITLED TO OVERTIME PAY?

The Fair Labor Standards Act is a federal statute which requires a payment of minimum wages and overtime to workers. 21 USC, Section 201, et. seq.

While the statute is usually referred to as protecting "Blue Collar Workers" and workers' rights with respect to lower wage earners, the statute also has clear implications for professional employees and high wage earners. By way of example, physician's assistants fall into a gray area as it relates to various exemptions under the Fair Labor Standards Act.

Essentially, there are three exemptions under the Fair Labor Standards Act known as the "White Collar Exemptions." These exemptions are the administrative exemption, the professional exemption, and the managerial exemption. Each of the exemptions require the payment of a salary at a minimum of $455.00 a week or greater.

Under the professional exemption, a four-year degree is also required and independence and discretion in the performance of duties. For administrative exemptions, the employee in question must exercise independent judgment and discretion.

The managerial exemption requires that the employee supervise at least two or more full-time employees and that their managerial decisions in regards to the supervising of employees be given "particular weight." Particular weight has been defined by the statute as requiring their involvement in decisions of hiring, firing, and recommending discipline, termination, pay increases, and the like.

Finally, the Administrative exemption requires that the employee's primary duty involve the general management of the company. The employee must be involved in making business-like decisions which include things such as budgeting, forecasting, determining financial wealth and goals, and other high level executive decisions.

Many physicians' practices and organizations prefer to pay a physician's assistant on an hourly basis. Because the exemption clearly requires the payment of a salary in order for an employee to be exempt, often times the employer destroys the exemption altogether.

However, physician practices should be wary in characterizing physician's assistants as exempt salaried individuals because another element of the exemption requires that they have independent discretion over the patient. Many state and federal laws require that PA's be closely supervised by an appropriately licensed physician.

Recently, a number of large organizations have been sued in the class action like vehicle under the Fair Labor Standards Act known as a collective action and have had to pay out thousands of dollars for misclassified employees. It is strongly urged that physician practices seek the advice of a board certified labor and employment attorney in order to determine the exempt status of all of their employees, particularly those who fall in a gray area which may cause them to be the victim of a lawsuit.