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Healthcare Industry Welcomes Changes to Overtime Wage Guidance

In a step viewed optimistically by healthcare businesses, the United States Department of Labor ("DOL") has withdrawn two Obama-era guidance letters used to interpret the overtime wage provisions of the Fair Labor Standards Act.

The first guidance letter concerned independent contractors, and set forth the DOL's now-former position that most workers were employees, not independent contractors, and thus eligible for overtime wages.The second guidance letter formulated a strict position on whether a party is a "joint employer" of a worker simultaneously employed by another business, and therefore obligated to pay overtime wages. Both guidance letters were seen as pro-employee.

The withdrawal of these guidance letters should portend well for health care businesses.Many healthcare businesses rely on independently contracted professional, clinical and administrative staff (for further discussion on paying overtime wages to professional employees, see our blog post here).Moreover, joint employment claims frequently arise in health care businesses, which are often affiliated, formally and informally, with another health care employer, i.e. through shared staff or limited common ownership.As such, for healthcare businesses, the withdrawal of these guidance letters should be welcome news regarding overtime wage obligations, and a positive indicator of the DOL's general position going forward. 

If you have any questions or require legal guidance with respect to overtime wages or other employment issues, please feel to call one of our experienced healthcare employment attorneys at 212.668.0200 or email the firm at info@mdrxlaw.com.

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Sunday, March 29, 2020