Sykes and Company, P.A. recommends pharmacists be paid a weekly or biweekly salary, not an hourly wage, and they should be exempt from overtime. Pharmacists may be exempt from overtime under the Professional Exemption, as a Learned Professional.
To qualify for the exemption, the following four conditions must be met:
- The employee must be compensated on a salary or fee basis at a rate not less than $684 per week.
- The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment.
- The advanced knowledge must be in a field of science or learning.
- The advanced knowledge must be customarily acquired by a prolonged course of
specialized intellectual instruction.
We bring this issue to your attention as some pharmacies pay their pharmacists an hourly rate. While the hourly rate certainly provides for a weekly salary of greater than $684 per week, an issue arises when a pharmacist works more than 40 hours during a workweek. The U.S. Department of Labor (DOL) defines a workweek as a “fixed and recurring period of 168 hours – seven consecutive 24-hour periods”. If compensated at an hourly wage, pharmacists must be paid at a rate of time and one-half for any hours over 40 during the workweek.
What is Your Pharmacy’s Workweek?
While the DOL has defined what the workweek is, the pharmacy owner must determine what time frame the workweek covers. Generally, employers use a Sunday 12:00 a.m. through Saturday 11:59 p.m. workweek, but you may use any time-period you wish. As a best practice, the workweek definition should be included in your employee manual to avoid any misinterpretation of when overtime may be paid, if applicable.
When submitting hours to your payroll service provider, be sure to specify the number of overtime hours for any employee paid an hourly rate, if the employee works over 40 hours during a workweek. It is possible that total hours worked for a biweekly pay period may be less than 80 hours and there will still be overtime due to the employee because the employee worked more than 40 hours during one week of the pay period.
How We Can Help
Sykes and Company, P.A. recommends that our clients separate working hours from non-working hours when reporting hours to their payroll service provider. Non-working hours are hours that the employer pays to the employee as a benefit, which include, but are not limited to Paid Time Off (PTO), Vacation, Sick, and Bereavement leave. Non-working hours do not have to be included when determining overtime hours for a workweek.
By separately stating these hours to the payroll service provider, the employer is substantiating to the employee how the hours on the paycheck are being calculated. This reporting process also serves as documentation for the federal and state departments of labor if the employer is ever audited by those agencies.
If you have any questions regarding your pharmacists’ pay, please feel free to call us to further discuss these important issues.