One of the early mistakes practice owners and managers may make when starting a new dental practice is violating state and federal wage and hour laws. Practices should familiarize themselves with the applicable laws and the common mistakes dental startups make when paying workers.
Understanding Wage and Hour Laws
Various state and federal wage and hour laws impose payroll compliance requirements for new dental practices. In rare cases, a dental startup that engages in interstate commerce will fall under the scope of the Fair Labor Standards Act. The FLSA establishes a worker’s right to a minimum wage (whether under the federal minimum wage or the state minimum wage if the worker’s state imposes a higher minimum wage). The FLSA also gives workers the right to overtime pay at one-and-a-half times their ordinary wage for every hour worked over 40 hours in a work week.
Most dental startups will fall within the scope of their state’s wage and hour laws, which may impose similar requirements as the FLSA, including giving workers the right to minimum wage and overtime pay.
Payroll laws also govern worker classification, including whether a worker qualifies as an employee entitled to the protection of wage and hour laws or an independent contractor. Worker classification also includes designating an employee as non-exempt (entitled to overtime pay) or exempt (not entitled to overtime pay).
Common Mistakes New Dental Practices Make
Some of the top mistakes that dental startups make regarding compliance with wage and hour laws include:
- Misclassifying Employees – New dental practices may violate wage and hour laws by misclassifying employees as independent contractors to avoid payroll taxes or designating regular employees as exempt from overtime pay.
- Inadequate Time Tracking – Wage and hour laws require employers to keep accurate records of the time employees spend working for the employer. Errors can also occur when employers round employees’ work hours inappropriately.
- Not Paying Overtime – Inaccurate time tracking may result in new dental practices failing to pay workers eligible for overtime one-and-a-half times their regular pay for hours they work over 40 in a work week.
- Unpaid Working Time – Dental startups may underpay workers by requiring them to perform work-related duties without compensating them, such as opening/closing the office or attending mandatory meetings and trainings.
- Off-the-Clock Work – New dental practices may violate wage and hour laws by requiring staff to engage in off-the-clock work, such as responding to emails, text messages, or phone calls outside of working hours or while on approved time off. Off-the-clock violations can also occur when practices require or acquiesce to employees working through uncompensated meal breaks.
Best Practices for Wage and Hour Compliance
Dental startups can ensure their compliance with applicable state and federal wage and hour laws through best practices such as:
- Developing Robust Timekeeping Practices – Practices should have reliable timekeeping systems and enforce policies to ensure staff accurately track their working hours.
- Auditing Employee Classifications – Dental practices can work with legal counsel to reassess workers’ roles to ensure proper employee/independent contractor or exempt/non-exempt employee classifications.
- Keeping Informed of Changes to Wage and Hour Laws – New practice owners can work with experienced employment law counsel to stay abreast of changes to wage and hour laws, including increases in minimum wage or new rules for employee classification.
- Obtaining Proper Training – Practice owners should ensure that office managers understand the relevant wage and hour laws to help managers avoid employee pay violations, such as having employees perform uncompensated work.
Contact a Dental Practice Law Firm Today for Help
When starting a new dental practice, understanding your business’s wage and hour compliance requirements can help you avoid significant legal problems soon after launching your new practice. Contact Mahan Law – Dental Attorney today for an initial consultation with an experienced dental practice attorney to discuss your legal obligations for paying your employees.
