Friday, January 14, 2011

Physicians' Assistants Entitled to Overtime - COTW #23

This week's employment law Case of the Week comes from a federal court in Pennsylvania (Eastern District): Cuttic v. Crozer-Chester Medical Center, 2011 WL 31399 (Jan. 5., 2011). The issue was whether physicians' assistants are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

Ordinarily, employees are entitled to "time-and-a-half" for overtime (hours worked past 40 per week) under the FLSA. The defendant medical center argued that the physician assistants (PAs) were exempt as "bona fide professionals." Bona fide professionals must be 1. paid a salary; and 2. perform primary duties "[r]equiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction." Here, the PAs were paid an hourly wage. So game over right?

Not so fast! An exception from the salary requirement exists for employees who hold a license or certificate to practice medicine or any of its branches. The PA in question had a valid license so this sounds promising...

Alas, it was not meant to be. Despite the PA license, "[t]he DOL (Department of Labor) has consistently interpreted the regulations . . . to require a PA to satisfy both the duties test and the salary-basis test." The Court also cited DOL interpretative guidance stating that employees who "serve these [medical] professionals" must meet the salary requirement. Giving deference to the DOL interpretation, the Court held that the physician assistant in question was entitled to overtime.

The implications of this case for employers are clear: Classify your employees properly; Read the DOL guidance.

It has been a tough start to 2011 for medical centers as the Supreme Court held earlier this week that medical residents must pay Social Security tax (FICA). See Mayo Foundation v. U.S. For more coverage, see me colleague Jon Stepanian's post on Defense of Medicine:
Supreme Court Rules That Medical Residents Are Subject to Social Security Tax.

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.