Hourly or Salary?

Episode #382 with Robyn Reis

Whether you decide on hourly or salary, be sure to do your homework! And to help you determine which may be best for your practice, Kirk Behrendt brings back Robyn Reis, an HR expert from Bent Ericksen, to share everything to consider when choosing hourly or salary for your employees. To learn about the benefits, pitfalls, and the laws you need to know, listen to Episode 382 of The Best Practices Show!

Main Takeaways:

There are advantages and pitfalls for both hourly and salary.

Consider every circumstance that a salary is going to cover.

Quarterly audits are essential for salaried team members.

Have all expectations in writing to avoid future problems.

Schedule regular check-ins with team members.

Be sure to follow the wage and hour laws in your state.

Quotes:

“It’s all about predictability. People think that when I give somebody a salary, it’s predictable. They know when they're going to get their paycheck, how much they're going to get paid. It works for a lot of people. But the caveats that go along with a salary are twofold. One is classification of the employee is first and foremost. And that is, are you exempt or nonexempt? No matter how you pay somebody — hourly, salary, commission, per diem, in blueberry pie — it has to be determined whether they're exempt or nonexempt. That's according to the federal Fair Labor Standards Act. And that's part of the Wage and Hour Division laws that govern how much taxes are taken out and all that good stuff.” (4:36—5:28)

“What you want to think about when it comes to that predetermined or predefined salary is, are you making sure that they're getting paid for the time that they work? So, even as a salaried employee classified as nonexempt, you still need to clock in and clock out. You still need to verify your time. That's part of the record retention requirements and the timekeeping. Again, keeps everything fair and equitable. People are being compensated for the time that they work.” (8:56—9:29)

“When you do give a salary to a nonexempt employee, you want to make sure that you're accommodating or counting on all the hours you expect them to work.” (10:45—10:56)

“[Expectations are] absolutely huge because a team member has to understand, a) how do they earn their paycheck, and b) when there are some incongruencies that there is something to go back to to say, ‘Wait a minute. This is what I understood.’ So, having it in writing is key. It’s not only for the team members’ understanding, but for protection of the doctor so that they can say, ‘Yes, I'm following all the employment compliance laws that I need to follow for my particular practice in my state, and this is where we start our relationship and our channels of communication.’” (13:23—14:05)

“Putting it in writing means that there is less chance of, ‘Wait, nobody ever told me that,’ or, ‘I thought it was this way.’ Putting it in writing lessens the chance of miscommunication. And when push comes to shove, there's no, ‘He said she said,’ or, ‘I thought she meant that,’ or, ‘He promised me this.’ Every lawyer everywhere will tell you, if it’s not in writing, it didn't happen, much like the patient records.” (14:05—14:31)

“Putting it in writing is really, really important for that employer-employee relationship. No misunderstanding, no question marks. ‘These are your hours. This is your schedule. This is what is expected of you. These are your benefits. And this is what you're going to be compensated.’” (14:52—15:10)

“The pitfalls are, when you do a salaried employee, you still have to watch your hours. They still have to track their hours. So, as a nonexempt employee, they still have to track their hours. I would recommend that somebody who pays their team on salary, once a quarter, go...