HR Solutions: Doctors' Notes, Exempt Pay, Overtime

Doctors' Notes, Exempt Pay, Overtime

January 1, 2008 | Regan Halvorsen, Lisa Orndorff and Bill Schaefer

HR Magazine, January 2008 Q: Is an employer permitted to ask for a doctor's note when an employee is out?

A: It depends on the circumstances that prompt the request and the employer's policies governing such requests. Sick leave: Yes. An employer may request a doctor's note as part of its sick leave or attendance policy. However, such a practice must be uniformly applied. The required note should include only that (name of employee) was seen on (date) at (time of appointment) and further may stipulate any period of partial or total incapacity to perform a job. Requesting more information could run afoul of the Americans with Disabilities Act (ADA).

ADA: Yes, but only as part of the accommodation process if the need for accommodation is not apparent. Employers are permitted to request information from a doctor to find out more about the employee's impairment and to determine whether it rises to the level of an ADA disability. This information may also be used to learn more about the severity of functional limitations and accommodation possibilities.

FMLA: Yes. The Family and Medical Leave Act (FMLA) allows employers to require certification from the worker's health care provider. Generally, employers may request recertification no more often than every 30 days. If an employee is returning from FMLA leave, this will likely be considered a fitness-for-duty request, which also has restrictions.

Contagious illnesses: No, or at least not without first seeking legal advice. If the employer believes that an employee has an illness that presents a direct threat to the health or safety of other individuals at work, the employer may wish to request a note from the employee's doctor stating that the employee is not contagious or to identify any workplace modifications that may be needed to protect the health and safety of others. However, such an inquiry could violate the ADA if the employer is unable to demonstrate job relatedness and that such a practice is consistent with business necessity. Even in situations where the illness is not a disability under the ADA, privacy and discrimination laws restrict an employer's ability to make non-job-related medical inquiries.

Workers' compensation: Yes. It is generally permissible for employers to require a doctor's note or release to return to work following a work-related injury or illness.

--RH

Q: Can we pay an exempt employee extra for working more than 40 hours in a week?

A: The nature of the duties of positions classified as exempt under the Fair Labor Standards Act (FLSA) often requires employees in those positions to work more than the regular 40 hours in a week. The FLSA doesn't require employers to provide extra compensation or compensatory time to exempt employees for extra hours worked, and up until the changes to the FLSA regulations in 2004, it was in the employer's best interest not to provide any type of extra compensation for fear that it would jeopardize the exempt status. The 2004 change gave employers more room to provide exempt employees extra compensation for extra time worked. The relevant regulation states that "additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include paid time off."

However, employers should remain cautious because a worker's exempt status might be harder to prove if the employee is paid time and a half, as nonexempt employees are. It may be safer to pay exempt employees extra compensation for extra hours worked in the form of flat sum or straight time.

Employers also may provide extra compensation in the form of time off, or compensatory time. Employers are free to structure compensatory time policies as they wish. For example, an employer may choose to provide compensatory time to an exempt employee for time worked over 40 hours in a week, or for any work over 45 hours in a week if that better fits the company's operating needs. A sample policy and sample form for administering compensatory time off can be found on the Society for Human Resource Management's (SHRM) web site.

--LO

Q: We would like to have a nonexempt employee work two jobs for us; however, each job has a different hourly rate of pay. Which rate of pay is used to calculate the employee's overtime pay?

A: Under federal law, there are two approaches an employer can take when handling this situation. The first method involves paying overtime based on the "regular rate," also referred to as the "weighted average."

To determine the regular rate, the total amount earned by the employee in both straight-time pay rates is divided by the total number of hours worked in that specific workweek.

For example, suppose your employee works a 38-hour week in her primary job and is paid $12 per hour. In that same week, she works 12 hours in her secondary position, where she is paid $9 per hour. The total number of hours worked is 50; therefore, your employee has worked 10 hours of overtime. With any nonexempt employee, federal law requires that overtime be paid for all hours worked in excess of 40 in any given workweek. In order to determine the regular rate, the calculation is as follows:

(38 hours x $12) = $456 and (12 hours x $9) = $108
$456 + $108 = $564
$564 ÷ 50 hours worked = $11.28 per hour. $11.28 is her "regular rate." To determine this employee's "overtime half-rate," multiply $11.28 by 0.5 for a total of $5.64. Then, multiply $5.64 by 10 overtime hours for a total of $56.40. This employee's total wages for the week will be $564 plus $56.40, which equals $620.40.

When calculating overtime using the second method, the employer and employee must reach an agreement in advance of the hours worked. They may agree to pay the employee one and one-half times the hourly non-overtime rate for all overtime hours worked based on the position worked when the overtime hours occurred.

Using the previous example, since the employee worked in the position that paid $9 per hour during all overtime hours, the overtime is paid using the $9 per hour straight rate and an "overtime rate" of $13.50 ($9 x 0.5 = $4.50; $9 + $4.50 = $13.50). The employee then earns $456 for the time worked in her primary position, $18 for the two straight hours worked in the secondary position (2 hours x $9), and $135 for the 10 hours of overtime (10 hours x $13.50) for a grand total of $600.

--BS

Regan Halvorsen, SPHR, Lisa Orndorff, SPHR, GPHR, and Bill Schaefer, SPHR, are HR knowledge advisors in SHRM's HR Knowledge Center.