Double the Charges for FLSA Wage Violations in Dentistry
Rolling doubles in a game of Backgammon is a good thing. Double damages for violating wage laws and shorting your team members of money they’ve earned? Definitely not a good thing.
The thought of violating labor laws should send chills up the spine of any practice owner. One slip-up, intentional or not, can put a serious dent in your bank account -- and worse, damage the reputation of your dental practice.
Here’s what you need to know to stay on the right side of FLSA labor law.
Change in Administration Means a Change in Policy for Dental Practices
As of April 2021, the potential cost of violating the Fair Labor Standards Act (FLSA) has doubled -- returning to pre-Trump administration levels. What was already a costly mistake may now lead to the type of lawsuit that could put your practice out of business.
The U.S. Department of Labor (DOL) announced it will once again seek "double damages" when negotiating settlements with employers who violate the law. Also known as liquidated damages, if you fail to pay your dental staff correctly, they could recover an additional amount equal to the amount they should have received. In other words, you may be liable for “double pay” damages.
For example, if you told your dental or veterinary assistant that they weren’t eligible for overtime, and they were, they could sue you. If they calculated $2,000 in lost pay, you may be responsible for paying $4,000 — $2,000 for unpaid overtime and $2,000 as liquidated damages.
Remove ALL Guesswork From Employee Pay
Here’s the good news; despite this policy-hokey-pokey of double damages, paying employees what they’re owed isn’t a mystery. Simply put, there’s no reason for you to violate the overtime or minimum wage provisions of the federal FLSA.
It's time to crack down on any gray areas within your practice. You must examine who you have classified as exempt and non-exempt employees, focusing on overtime and other payroll policies. Your independent contractor relationships may also need to be addressed. If you don't, you may have to pay double "back pay" — and the bill you get slapped with can be significant.
Not to mention that paying your employees what they are owed is the right thing to do.
|Recommended Reading: Why Hygienists and Associate Dentists are Not Independent Contractors|
Stricter “Good Faith” Enforcement
"Double damages" isn't a new concept, and practices can no longer plead ignorance as a defense.
Here’s an example that should be cause for concern. In 2018, Smiley Dental Associates Inc., a dental practice in Nashville, Tennessee, suffered a heavy financial penalty for completely avoidable violations. The practice was ordered to pay $50,000 in back wages and liquidated damages to 10 employees because of minimum wage and overtime violations plus poor record keeping.
That’s $50,000 dollars for trying to squeeze work out of employees while blatantly ignoring the law. You wouldn’t do that though, would you?
During the summer of 2020, the Trump administration issued a policy that limited DOL investigators' ability to seek liquidated damages without clear evidence of bad faith. A return to a stricter view of “Good Faith” efforts is part of the April 9, 2021 Wage and Hour Division’s (WHD) bulletin.
What this means is that relying on an audit report from the DOL is no longer sufficient for a good faith argument. While honest mistakes do happen, and good faith arguments aren’t impossible, it’s not easy for a practice to get away with payroll discrepancies.
What should you do? Remain proactive. DOL agents won’t have any reason to knock on your door if you’re following DOL laws.
|Recommended Download: 9 Common HR Mistakes & How to Easily Fix Them|
Policies and Laws Change – Stay Compliant with HR for Health
Yes, human resources and the laws surrounding hourly and minimum wage policies are complex and confusing (especially for non-HR professionals).
Lucky for you, they don't need to be. Whether you're a veterinarian, physician, chiropractor, optometrist, dentist, or other healthcare professional, HR for Health takes the guesswork out of today's demanding labor laws and ensures compliance.
When you don't need to worry about HR risks, you can focus on what matters most: building a practice you're proud to own and your team is proud to work for. Don’t try to figure out ever-shifting wage policy on your own. Get the support you need.
Get an HR for Health demo today and see the magic in action for yourself!
About HR for Health
HR for Health is an all-in-one HR software solution dedicated to helping the dental, optometry, and veterinary industries. Our human resources platform features all the tools practice owners need to manage payroll, timekeeping, 401(k), and more with total integration and ease.
Whether you’re looking for HR support for a small business or you’re a large group dental practice, HR for Health has the solution to fit your practice and budget. Reach out to a HR for Health account representative to learn more, today: Schedule a Meeting