The Federal Fair Labor Standards Act (FLSA) requires that all "non-exempt" employees must receive overtime pay equal to one-and-one-half times their regular rate of pay for every hour over 40 hours worked during a work week. Individuals employed in a bona fide executive, administrative or professional capacity, the so-called "white collar" jobs, however, are "exempt" from this requirement and need not be paid overtime. Typically, to qualify for a white collar exemption, an employee must be paid on a salary or fee basis, unless the employee is licensed to practice law or medicine, and is "actually engaged in the practice" of law or medicine.
In a recent decision, Belt v. EmCare, Inc., the Fifth Circuit Court of Appeals, the federal appellate court for the Gulf Coast states, addressed for the first time whether nurse practitioners (NPs) and physician assistants (PAs) must be paid a salary to qualify for the overtime exemption. The complaining NPs and PAs provided health care services for EmCare in hospital emergency rooms in twenty states. EmCare paid the NPs and PAs on the same hourly basis for all hours worked, including overtime. The NPs and PAs sued under the FLSA, claiming that EmCare violated the statute by failing to pay them time and one-half compensation for overtime.
Applicable regulations provide that professions that "merely serve the medical profession" must be paid a salary to qualify for the overtime exemption. The regulations specify that pharmacists, nurses, therapists, technologists, sanitarians, dieticians, social workers, psychologists and psychometrists fall within this category, but the regulations do not address NPs and PAs.
The Fifth Circuit filled in this regulatory gap by placing significant weight on NPs and PAs not being licensed to practice medicine under any state's medical practices statute. The court concluded that NPs and PAs were not "practicing medicine," and, therefore, they must be paid a salary to qualify for an exemption from overtime pay.
The federal courts with jurisdiction over Maryland have not yet examined this issue. Nevertheless, health care employers should be cautious, because local federal courts could, but are not required to, follow the Fifth Circuit's lead. Moreover, wage and hour suits are the fastest growing category of employment litigation in the United States, and can be especially costly for employers. Successful employees are entitled to recover their back wages, plus a penalty equal to those back wages, their attorneys' fees and other litigation costs.