EXECUTIVE SUMMARY

Within the past seven years, federal lawsuit filings regarding wage overtime rules have increased by 30%, a trend that should jar surgery centers into taking preventive actions.

  • First, conduct a self-audit to ensure the surgery center complies with all federal, state, and local wage and overtime laws.
  • Next, check to see whether hourly employees follow the center’s rules about when to clock in and clock out, and make certain all overtime — inadvertent or intended — is paid properly.
  • Unintended technical wage and overtime violations are common, but they can be prevented by maintaining and storing accurate records.

Increasingly, healthcare providers are running afoul of federal overtime wage laws. Since 2011, there has been a 30% increase in federal lawsuit filings of all such cases. ASCs can be especially vulnerable because of hourly employees starting their days earlier than scheduled or staying late when procedures run long.

“Healthcare practices are getting targeted in overtime violations,” says Salvatore Puccio, Esq., partner with Garfunkel Wild in Great Neck, NY. “ASCs, in particular, fall under the same types of issues as hospitals and physician practices. When procedures take longer than anticipated and staff have to stay longer, you run into risks with regard to overtime and recordkeeping.”

Surgery centers also might violate state and local laws when they are not fully aware of all requirements and rules.

“We’ve seen a number of healthcare agencies get audited and targeted for overtime violations, so what we’re trying to do is be preventive with ASCs, instead of reactionary,” Puccio explains.

Puccio speaks about employee overtime rules at national conferences. Here are his suggestions for how to stay compliant with overtime and other wage rules:

Conduct a self-audit. “Make sure you’re complying with federal and local laws,” Puccio says. “Often, there are changes at the state and local levels, and this causes potential problems and issues.”

For example, the state of New York is making a change regarding how on-call time is paid. The change will be different from current federal and state requirements. The proposed change would require paying employees for the time they are off duty, but on-call, and not only for the time they spend working if they are called into work. This on-call/but-not-at-work time would be subject to the minimum wage and potential overtime calculations, Puccio explains.

At print time, the exact rules were unknown; however, these new rules are expected to provide greater protections to employees and add additional requirements on employers, according to Puccio.

“For ASCs, this might impact non-exempt employees,” he says. “Exempt employees are not paid overtime.”

Monitor early arrivals and those working through lunch. One prevalent problem is that hourly nurses might work through their lunch hour because a surgical procedure requires extra time. When this happens, nurses must be paid for that extra work time, Puccio says.

“Some time settings automatically deduct a half hour for lunch, and someone would have to go through it and override it every day if an employee works through lunch,” he says.

Pre-shift and post-shift work also must be compensated.

“Where this comes into play is when someone’s shift starts at 9 a.m., but the person is required to prep the station and does this at 8:30 or 8:45 a.m.,” Puccio says. “What we’re seeing in practice is that while there might be a policy in place about paying employees if they come in early, it’s not always happening. It’s not that the employer is violating the law, but the employees are doing this themselves.”

Maybe some employees want to get a jumpstart to their day, so they arrive earlier than their scheduled shift and they don’t clock in. They might not ask to be compensated for this extra time.

“So, what happens is you have one disgruntled employee, who says, ‘I came in and everybody came in 10 or 15 minutes early,’” Puccio says. “These litigations result in class action lawsuits.”

Thus, one person’s complaint can result in thousands of dollars in legal fees and fines. ASCs can prevent this by making sure they maintain policies about pre-shift or after-shift work and how it’s compensated. Then, administrators must make sure they are enforcing the policy, even if employees are not on board with sticking strictly with their set shift hours. “For example, we were doing a presentation to a nonprofit healthcare facility, and we were hearing that nurses like to come in and do X, Y, and Z,” Puccio says. “You have to tell them they can’t do that, or they have to clock in and tell you they’re clocking in.”

Employers also will have to make sure that employees do not arrive early, spend the extra time in the lunch room, but count that as paid work time.

“It’s a fine line,” he says. “But if someone is working and is needed, then they have to be paid.”

Watch for small wage mistakes and technical violations. Probably 90% of wage infractions are unintentional technical violations, Puccio says.

“The amounts of those errors are usually very small, but the costs of paying attorney fees and penalties are higher,” he says. “What you face are back wages and liquidated damages, which are double the back wages, and attorneys’ fees.”

Mistakes can occur when employees’ overtime pay is miscalculated, or when records are not well-kept regarding overtime pay. “You need to maintain good records and maintain them for long periods of time because that’s your best defense,” Puccio advises.

ASC employers must account for each mistake. If a mistake is systemic, affecting more than a single worker, then there could be a class-wide settlement, ranging from $25,000 to hundreds of thousands of dollars, depending on how many times the mistake had occurred.

“It’s a cost you want to avoid if you can and put that money back into your infrastructure and patient care,” Puccio says.

To avoid this type of mistake, ask an expert to review the way wages are determined and paid, comparing the ASC’s practice to all wage regulations.

Follow all policies and laws when firing employees. “It’s very common that after an employee is terminated for cause, employees go to attorneys, thinking they were discriminated against,” Puccio says. “What their attorneys also are doing is inspecting and scrutinizing the pay practices of the employer.”