The Fair Labor Standards Act’s four categories of employment
Summary by AAPA’s Professional Advocacy Staff, updated December 2016
This document is for informational purposes only, and nothing herein is intended to be, or shall be construed as, legal or medical advice, or as a substitute for legal or medical advice. All information is being provided AS IS, and any reliance on such information is expressly at your own risk.
According to the federal Fair Labor Standards Act (FLSA), PAs can be classified as salaried employees exempt from the protections of FLSA, or hourly (non-exempt) employees entitled to overtime of at least time-and-one-half for any hours over 40 worked in one week (or for hospital-employed PAs, 80 hours over two weeks).
FLSA regulations were updated in a Final Rule published in the U.S. Federal Register on May 23, 2016. The new rules were to take effect December 1, 2016, but were stopped at the eleventh hour by federal injunction. The primary change relevant to PAs would have been an increase from $455 to $913 per week for the minimum salary required in defining a “learned professional,” the FLSA exempt employee category that includes PAs.
Until litigation and appeals run their course, employers will continue to operate under the 2004 regulations in place prior to issuance of the May 2016 Final Rule. More details are available here.
Learned professionals under FLSA
Employees, including PAs, are considered “learned professionals” when the following four criteria are met:
- They are paid on a salary or fee basis of not less than $455 per week
- Their work requires advanced knowledge, predominantly intellectual requiring consistent exercise of discretion and judgment,
- The advanced knowledge is in a field of science or learning, and
- The advanced knowledge is customarily acquired by a prolonged course of specialized intellectual instruction
*Note that the regulations published at § 541.600 assume implementation of the May 23, 2016 Final Rule and reflect the higher salary test of $913 per week, which is temporarily on hold.
Federal regulation specifically mentions PAs in the section on “learned professionals” where it states, “Physician assistants who have successfully completed four academic years of pre-professional and professional study, including graduation from a physician assistant program accredited by the Accreditation Review Commission on Education for the Physician Assistant, and who are certified by the National Commission on Certification of Physician Assistants generally meet the duties requirements for the learned professional 29 exemption.”
29 CFR V Subpart D, section 541.301(e)(4)
This does not mean that PAs must be classified as learned professionals. To be considered a “learned professional,” an individual has to meet all four criteria. Clearly, PAs meet the second, third, and fourth ones. This means that PAs are learned professionals and are not protected by federal overtime requirements if the employer chooses to pay them a salary, and it is a salary of at least $455 per week.
Alternatively, under the FLSA, employers may choose to pay PAs as hourly wage earners. If an employer chooses to pay PAs hourly, then the PAs do not fall into the “learned professionals” category or any other exempt category, and the employer is required under the law to pay them at least time-and-one-half for any hours over 40 worked in a week.
Special accommodation for hospitals
The FLSA provides a specific exception – applicable to hospitals and residential care facilities – to the usual rule that overtime is calculated on a seven-day work week basis. These employers can agree with their employees (or their representative, i.e. their union) to have a 14-day work week for purposes of calculating overtime. 29 CFR 778.601
There is an important caveat, however: if a hospital or residential care facility employer uses the 14-day work week, they are obligated to pay overtime for any hours worked in excess of 80 and they are obligated to pay overtime for all hours worked in excess of 8 hours in any given work day. Thus, if a hospital scheduled a PA (who is paid hourly) to work 8 10-hour shifts, the PA would be owed 16 hours of overtime, even though he or she only worked 80 hours in the 14-day period.
The regulations do not require the “double-counting” of overtime. Thus, if our hypothetical hospital scheduled a PA (who, again, is paid hourly) to work 10 10-hour shifts, the PA would be owed 20 hours of overtime, calculated either on the daily basis or on the +80 hours basis, but not on both (he or she is not entitled to 40 hours of overtime).
Practice of medicine
The law treats physicians differently. They are in a special exempt class that allows employers the option of paying salary or hourly compensation, without having to meet federal overtime requirements. 29 CFR V Subpart D, section 541.304, Practice of Law or Medicine
Section 541.304(b) states, “In the case of medicine, the exemption applies to “physicians and other practitioners licensed and practicing in the field of medical science and healing or any of the medical specialties practiced by physicians or practitioners. The term ‘physicians’ includes medical doctors (general practitioners and specialists), osteopathic physicians (doctors of osteopathy), podiatrists, dentists (doctors of dental medicine), and optometrists (doctors of optometry or bachelors of science in optometry).” The Department of Labor has consistently declined to expand that section to include physician assistants in its definition of “practitioners.” If it were to include PAs in that category, employers could pay PAs a salary or an hourly fee without having to pay a higher rate for overtime.