Fair wage questions involving key employees are common in veterinary practices. Employees often plead to make the move from
an hourly position to a salaried one believing it will increase their wages, give them more flexible hours and eliminate the
practice's need to pay out overtime. Practice owners or practice managers may unwittingly make this transition for the employee
without realizing the implications for all involved.
Use caution when transitioning employees from an hourly wage to a salary wage, as this move alone does not necessarily make
an employee exempt from overtime laws. Before making a final decision, gather all the facts and determine what will benefit
the employee and the practice and what is allowable by law.
Exempt versus nonexempt status
Your first task is to determine whether the employee would qualify for exempt status in a salaried position. Job titles and
positions have little to do with exempt status unless the employee falls into the "white-collar" category, which is described
in more detail below. Check the Department of Labor (DOL) website, http://dol.gov/, for the exact list of rules outlining whether an employee is eligible for exempt status under the Fair Labor Standards Act
But don't stop there—in addition to these federal guidelines, state laws may have their own definitions of exempt versus non-exempt.
In some states, specific job titles may exclude team members from an exempt status, thus making the practice owner liable
for overtime pay regardless of whether the employee is paid an hourly or salaried wage. Other states, like California, are
likely to have more rigid definitions of exempt status, so be sure to check out any state or local laws that may apply.
Explore and be aware of positions that are considered "white-collar." Employees in these positions—which include executives,
administrative employees, professionals, those engaged in outside sales and those conducting computer-related work—may be
considered exempt through the FLSA. Apply the following three questions set forth by the FLSA to determine whether an employee
in a white-collar position would be considered exempt under the law:
> Does the employee's salary meet the minimum requirements for salary level wages?
> Is the employee paid a regular, predetermined amount on a preset basis, such as weekly or biweekly? In addition, is the salary
unable to be reduced, except in specific circumstances?
> Are the assigned job duties and functions in alignment with the rules set forth by the FLSA for each position? (If you are
unsure, contacting an employment law attorney can help to clarify how these rules apply to your practice.)
While most veterinarians will be eligible for exemption status based on their professional abilities and perhaps even their
pay scale, veterinary technicians do not fall into this category and are therefore not exempt employees as described in the
Department of Labor Fact Sheet No. 170.
If the employee does not qualify as exempt, your decision is made. However, if the employee does qualify for exempt status,
consider other variables before making a final decision. For example, it's a good idea to review the total compensation package
in addition to the employee's hourly wage. And consider other factors, such as the practice budget, employee attributes and
the amount of continuing education the employee has pursued.