Veterinary employees: Exempt or non-exempt? That is the question! - DVM
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Veterinary employees: Exempt or non-exempt? That is the question!
Moving top-performing employees from hourly to salaried positions isn't always a win-win situation.


Responsibilities and expectations

Many employees and employers may believe the change from a non-exempt (hourly) position to an exempt (salary) position is a promotion that benefits all involved. However, employees may wind up working more hours for less pay, and employers may be subject to laws and regulations that leave them open to potential litigation.

Expectations are often different between hourly and salaried employees. The jump from non-exempt to exempt often comes with additional responsibilities or job functions. Instead of completing a task or assignment, the newly salaried employee may now be in charge of those who are completing the task or assignment as direct reports. Additional responsibilities may cause a salaried employee to spend more time working or following up on assignments than the hourly employee who completed them. For example, an hourly employee can reasonably expect that when her workday is complete, she may go home and forget about her job for the remainder of the day. For the salaried employee, the increased responsibility may infringe on her personal time, and she may find herself thinking about or completing work in the evening hours from home.

Total compensation strategies

The primary considerations when determining whether to take an hourly team member to salary include the overall practice budget, the impact of a wage increase or salary change and the total cost of compensation for the individual employee. If the anticipated amount of overtime is minimal, it may be best to continue on an hourly basis and budget for the overtime accordingly. However, if you anticipate that the amount of overtime will increase significantly, salaried pay may be helpful in controlling payroll costs. In that case, attempt to set a fair salary that reflects the potential additional work hours.

Always be sure to consider ancillary payroll costs, such as additional taxes, insurance, dues or licenses that may increase as an employee's wages and responsibilities increase. Payroll budgeting should be a factor in all wage-related decisions.

The final factor includes any additional benefits that the employee receives. Health, dental, vision and life insurance premiums paid by the practice, discounts given on employee animal care and bonuses are all a part of the employee's total compensation package. Employees and employers often fail to calculate the value of these additional benefits, but they should be a part of every wage discussion.

Making the transition—or not

No matter what your decision on the salary versus hourly discussion, the key to making your employee happy in her new position or in her existing hourly role is communication. Lay out your expectations as an employer as well as the role and responsibilities of the employee. Provide the details of what the employee will lose or gain from a change in wages. By being honest about your expectations and your decision to either pay a salary or hourly wage, you are setting the stage for open and honest communication in other areas as well.

Obtaining the advice of a human resources specialist or attorney may be helpful in determining whether this change will be beneficial. Membership in such organizations as the Society for Human Resource Management ( can also help, as it provides an additional resource when difficult HR questions like this come to light.

If you always strive to stay within the confines of federal, state and local laws, consider what's feasible for your practice budget going forward and think about the best interests of your faithful employees, it becomes a lot easier to determine the best course of action. Of course, if you are unsure, seek outside assistance to fully understand your role and responsibilities as a practice owner or practice manager.

Alicia Foss is a talent management and HR consultant for Marsha L. Heinke, CPA. Dr. Marsha Heinke offers tax, accounting and consulting services for veterinary practices. Projects include practice management consultation, practice valuations, succession planning, HR consultation and more.


Source: DVM360 MAGAZINE,
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