“I have a dental practice and just got hit with a claim for not paying an employee correctly. However, she’s per diem and I pay her for each day worked. What did I do wrong?”
Your HR Survival Tip
There are several ways the “per” something payment methods can go wrong for you. While most of these work just fine in other states, never forget you are in California and nothing is the same here.
Below are some examples of what we see go wrong and why:
- Per Diem — Per diem means a daily rate. This is quite common in the healthcare field. You might not be aware that many dental hygienists are paid per diem because they might only work 1-2 days a week at your dentist’s office and another 2-3 days at other offices. However, in California, you must remember we pay overtime for any time worked over 8 hours and that includes per diem workers. So if your per diem worker doesn’t stop work after 8 hours, you’ll owe the per diem rate plus overtime.
- Per Week — This isn’t an official method of paying but you might be using it without knowing it’s wrong. Let’s say you have hourly employees who have agreed to work for a certain amount of money each week. You’ve agreed the workweek includes one day with a little overtime and a couple of shorter days. The amount of pay is intended to cover 40 hours of regular time and 2 hours of overtime, even though the employee may not actually work a full 40-hour week due to the short days. Sounds fair and keeps payroll easy, right? The problem is, again, California. You must pay overtime as a separate line item in payroll as proof of payment. The Labor Commissioner would say the weekly amount is only paying for regular time and can’t include overtime…and you still owe for that overtime.
- Per Pay Period — This happens too often. You have an hourly employee who works no overtime so you both agree to just pay him the same amount each pay period. No fuss, no muss. There are two problems here. First, you must reconcile that pay with hours worked so you haven’t really eliminated any work from your side…and we can only hope you’re still making that employee clock in and out. The other problem is that you cannot legally use this method if you have a semi-monthly pay period (twice per month). Semi-monthly breaks down to 86.67 hours per pay period. An hourly employee will typically work either 10 or 11 days each pay period. Each time there were 11 days in the pay period you could be fined for not paying in full (88 hours). The 10-day pay period where you paid more than needed cannot count toward the 88 hours due the next pay period. Frankly, it’s just easier overall to stick with paying for time worked and submitted on a timecard.
Worse than the “sunshine tax” we all pay, are the employment laws that will make you pay even more if you choose to ignore them or aren’t even aware of them. California is quite fierce in its protection of employees who aren’t paid correctly or on time.
Leave a Reply