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Overtime Pay: The Healthcare Industry

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The healthcare industry faces several challenges when it comes to staffing 24-hour facilities. Perhaps the biggest challenge is accurately calculating overtime pay for staff who work longer than 8 hours a day or more than 80 hours in the workweek. The solution most healthcare employers use is the 8 and 80 rule. If you’re unfamiliar with the 8 and 80 rules, keep reading how they could benefit you.

What is the 8/80 Rule?

Hospitals and healthcare facilities are the most common industries that implement the 8 and 80 rule. Nurses, on-call doctors, interns, and other hospital staff members require unique and flexible options when it comes time to calculate their weekly hours. Calculating these hours can quickly become complicated due to the Fair Labor Standards Act overtime regulations.

In other industries, employers are familiar with the regulations concerning overtime – if an employee works more than 40 hours in a week, they get paid time-and-a-half. However, the 8/80 rule is a notable exception for calculating overtime and is strictly regulated to hospitals and residential health care facilities.

The 8/80 rule states an employee will earn overtime for hours worked more than eight in any workday and over 80 in any regularly recurring two-week period. Now, hospital and residential health care facilities are not required to pay employees under this rule. It’s acceptable to have some staff employed under the traditional overtime rules and others under the 8/80 rule. What they cannot do is have one employee subjected to both methods.

What are some examples of the 8/80 rule?

The 8/80 rule is popular among nurses, doctors, and other hospital staff members because it allows for more scheduling flexibility. For example, if a nurse works 8 hours for six days in a row, despite working 48 hours in a single week, they would not be owed any overtime pay as long as the next week’s total hours do not exceed 80 hours for the two weeks.

Similarly, if another hourly hospital employee had the same schedule but worked a 10-hour shift on one of the days worked, the hospital only owes overtime pay for the extra two hours worked that day instead of 8 hours of overtime from the hours in Week 1. Let’s take a look:

Week 1

  • Sunday: 8
  • Monday: 8
  • Tuesday: 8
  • Wednesday: 8
  • Thursday: 8
  • Friday: 8
  • Saturday: 0

Total Hours Worked: 48

Week 2

  • Sunday: 0
  • Monday: 8
  • Tuesday: 0
  • Wednesday: 0
  • Thursday: 10
  • Friday: 8
  • Saturday: 0

Total Hours Worked: 26

  • Hourly total after 2-week work period: 74
  • Overtime hourly pay due: 2

Furthermore, if an hourly employee does not work more than 8 hours during any individual shift but still works more than 80 hours in the two weeks, the employer still pays less in overall overtime pay compared to the conventional overtime method.

Lastly, and perhaps the most complicated example, is when an employee works more than 8 hours in a shift and totals more than 80 hours in two weeks. In this scenario, any overtime payments due for going over the eight-hour mark are credited toward the overtime pay for hours worked over the 80-hour, two-week limit. This benefits both the employee and the employer; the benefit to the employee is that they are owed the larger of the sums, and the employer only has to pay one calculation of overtime, not the sum of both.

Keep in mind that wage and hourly rules differ by state, but residential health care facilities need to coordinate closely with employment law advisors to avoid fees and penalties associated with noncompliance.

Having the right time management software makes calculating employee hours much simpler. At Dominion, we offer user-friendly, customizable Time & Attendance software geared towards your needs.

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