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August 19, 2005
Dear Name* ,
This is in response to your letter following up on a phone conversation you had with an investigator from
our Montgomery, Alabama office. You presented two questions regarding the Nurse Practitioner (NP) classification and shift differential pay for exempt
classifications of executive, administrative and professional employees under the Fair Labor Standards Act (FLSA), section 13(a)(1), copy enclosed. The
Regulations regarding the section 13(a)(1) exemption can be found at 29 C.F.R. Part 541, which were revised effective August 23, 2004. See 69 Fed. Reg. 22122; April 23, 2004.
You stated in your letter that your hospital needs a PRN-Nurse Practitioner (PRN) to cover shifts for
absent NPs and during periods of high patient load. The PRN will be paid on an hourly basis and is a nonexempt position. Additionally, you have an NP
position that is paid on a salary basis and is an exempt position. An NP who normally works the day shift is eligible for shift differential pay if he or
she is required to work evenings or nights.
First, you inquire as to
whether you may pay non-exempt NPs on an hourly basis without affecting the
exemption status of salaried NPs whom we will presume otherwise fulfill all the
requirements for the professional employee exemption found at 29 C.F.R. §
541.300, such as the requirements related to primary job duties and payment of
at least the minimum salary required. You recognized that paying the PRN
hourly disqualifies him or her from the professional employee exemption. It is
our opinion that having some employees within the same job classification who
perform the same duties but who are paid on a different (hourly) basis, does
not affect the status of any other exempt employees paid on a salary basis.
Exemptions under 29 C.F.R. Part 541 are not based upon a job title or job
classification, but upon the salary and duties of each individual employee.
See 29 C.F.R. § 541.2, copy enclosed. However, only if the NPs meet the salary
and duty requirements of Regulation 541, can they be exempt from the overtime
and minimum wage requirements of the FLSA.
Next, you ask whether paying exempt employees a shift differential pay for working evenings and nights will
affect their salary basis of pay. In addition, you would like to know whether
this shift differential premium must be paid on an entire shift basis, or if
the employees may be paid on an hourly basis only for the additional hours
worked during the evening shift. 29 C.F.R. § 541.602, copy enclosed, states
that an employee is compensated on a salary basis “if the employee regularly
receives each pay period on a weekly, or less frequent basis, a predetermined
amount constituting all or part of the employee's compensation, which
amount is not subject to reduction because of variations in the quality or
quantity of the work performed.” Emphasis added. The predetermined salary
does not have to include all of the compensation that the employee will
be paid. Furthermore, 29 C.F.R. § 541.604(a), copy enclosed, states that “the
exemption is not lost if an [otherwise] exempt employee who is guaranteed at
least $455 each week paid on a salary basis also receives additional
compensation based on hours worked for work beyond the normal workweek. Such
additional compensation may be paid on any basis (e.g., flat sum, bonus
payment, straight-time hourly amount, time and one-half or any other basis),
and may include paid time off.” Therefore, the exempt employees may be paid an
overtime premium or shift differential pay that may be paid on an hourly basis
without invalidating their otherwise-exempt status. Of course where an exempt
employee’s pay is computed on an hourly, daily, or shift basis, there must be a
reasonable relationship between the guaranteed salary and the amount actually
earned. 29 C.F.R. § 541.604(b).
This opinion is based
exclusively on the facts and circumstances described in your request and is
given on the basis of your representation, express or implied, that you have
provided a full and fair description of all the facts and circumstances that
would be pertinent to our consideration of the questions presented. Existence
of any other factual or historical background not contained in your request
might require a different conclusion than the one expressed herein. You have
represented that this opinion is not sought by a party to pending private
litigation concerning the issue addressed herein. You have also represented
that this opinion is not sought in connection with an investigation or
litigation between a client or firm and the Wage and Hour Division or the
Department of Labor. This opinion letter is issued as an official ruling of
the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. §
259. See 29 C.F.R. §§ 790.17(d), 790.19; Hultgren v. County of Lancaster, Nebraska, 913 F.2d 498, 507 (8th Cir. 1990).
We trust that the above is responsive to your inquiry.
Sincerely,
Alfred B. Robinson, Jr.
Deputy Administrator
Enclosures:
FLSA section 13(a)(1)
29 C.F.R. Part 541.600
29 C.F.R. § 541.2
* Note: The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. 552 (b)(7).
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