Practice Management Alert

Look to salary threshold, and don’t let insidious biases take over.

If you’re familiar with how wage and hour laws affect your practice’s workers’ pay, you may be wondering if what and how you pay your associates is both fair and legal.

“Associates are doctors and by definition should be considered exempt employees,” says Barbara Freet, PHR, president/CEO and founder of Human Resource Advisors in Walnut Creek, California.

However, your practice must pay associates a salary that meets the salary threshold (twice the minimum wage) to truly qualify for exempt status.

This leaves you with only two options, Freet says:

1) _“Pay the associate any other wage based on production, hours worked, absolutely anything else, and the associate is nonexempt and has to keep time records and be paid overtime”; or

2) _“pay a salary that meets the lowest threshold every payday and add on top of that a percentage of production or any other wages that you both agree to.”

This can get tricky if your associates aren’t working full time. “If your associate only works one day a week, or two days a week, or three days a week, you may not take the minimum salary threshold and prorate it. It is the minimum you must pay regardless of how many days your associate works,” Freet says.

However, there are workarounds. Your practice can lower the percentage of production pay or switch to a more “commission-style” system or pursue other strategies to make sure an associate is paid what she and your practice agreed upon.

There are other legality aspects to consider, too. If your practice is struggling — or has struggled, in the past — to make sure staff are paid fairly, based on skill and job duties, rather than other factors, you can also implement some safeguards.

For example, many states are beginning to outlaw questions about previous salary during the interview and hiring process. These inquiries have often penalized women, in particular, by paying them lower salaries throughout their careers than their male peers.

Additionally, implicit bias may factor into your practice’s compensation conversations. Do the human resources work now to avoid future problems or to mediate any current issues.

If your senior leadership is unaware of the disparity or aren’t addressing any of your concerns adequately, make sure they know what’s going on, say Margaret Strange, J.D., and Sarah Skubas, J.D., principals at Jackson-Lewis, P.C. in Hartford, Connecticut, on the company’s blog.

Base your compensation structures on objective and transparent criteria, and consider conducting a routine salary audit to make sure you stay on track, Strange and Skubas say.

If you handle human resources and you believe your practice’s policies on compensation need some spiffing up, utilize education and training on pay and gender issues. These could help both leaders and workers recognize any implicit biases they may have about women in the workplace, as well as give workers the vocabulary and tools they need to negotiate fair pay, Strange and Skubas suggest.

If you need more documentation when approaching this situation, look to the statistics gathered in the Doximity 2019 Physician Compensation Report, as well as the plethora of information available surrounding equal pay day (the day, every year, when women earn the same amount that men did in the previous calendar year).

For full transparency, add these policies to your employee handbook (see story in Practice Management Alert Volume 19, Number 7 for more information on employee handbooks).