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The Anatomy of a Healthcare Employee’s Paycheck
As an HR Manager or Payroll Administrator in the healthcare industry, you’re responsible for making sure employees are receiving the correct type of pay based on the hours worked. Managing various pay rates can be challenging though, especially if you have to calculate them manually. This type of process can lead to paycheck errors and, even worse, upset employees.
Shift Differential Pay
Shift differential pay refers to the extra compensation an employee receives for hours worked that are outside of 8:00 am to 5:00 pm, Monday through Sunday. Some healthcare facilities operate 24/7, 365 days a year and need to properly staff their locations beyond normal day shift hours. Second, third, and holiday shifts can be undesirable, so employers need a way to incentivize employees to ensure these shifts are adequately staffed.
- Holiday shifts are usually paid at time and a half (1.5 times base pay rate).
- The Third shift pay rate is regularly higher than a second shift pay rate.
- Some companies don’t pay shift differentials and instead offer additional paid time off, pay shift differentials as a cash bonus, or provide premiums within the base salary.
It’s important to be up-to-date on how differential pay is being compensated, especially if new pay rates are being implemented and employees are noticing a change in their paychecks.
On-Call & Call-Back Pay
When someone is “on-call” they must remain on the work site while working or be within so many miles of the hospital or clinic. Most often, on-call employees can stay home and carry a beeper or cell phone so they can easily be reached when needed. On-call pay only includes the actual hours the employee worked at the hospital, not the time spent at home.
On-call and call-back shifts are common among healthcare employees, so it’s important to be familiar with the differentials in pay and verify the hours actually worked. This means less time spent correcting payroll errors after processing.
In-charge pay refers to the pay grade for a certain position. An example of this would be a Pharmacist-In-Charge (PIC) or a Charge Nurse. These employees have the sole responsibility of the supervision, management and state and federal regulations within their department. Whether delegating assignments or ordering medicine, these employees have to balance both managerial and clinical tasks in their positions.
Department Differential Pay
Employees, particularly in the healthcare industry, can work in multiple departments. For example, you could have a nurse that works in the emergency room one day and then in the outpatient clinic the next to ensure sufficient staffing. The pay for working in each of these departments could be entirely different.
Unless exempt, employees included in the Fair Labor Standards Act (FLSA) are required to receive overtime pay for hours worked over 40 in a workweek at a rate no less than 1.5 times their regular pay rate. The FLSA reports there is no limit on the amount of hours employees may work in any workweek.
Using Technology to Correctly Pay Your Healthcare Employees
We’ve discussed several types of employee pay rates you may encounter in the healthcare industry, but how do you track and manage them efficiently? You have to automate these workflows and the best way to accomplish this with HR technology.
A unified solution with a centralized database is designed for one-time data entry. The data is then synced across your payroll, HR, and attendance workflows eliminating the potential for errors. The right HR technology can help you automate even your most challenging workforce processes in the following ways:
- Advanced clock rules can be assigned to employees for shift differentials, overtime, and more, saving you valuable time.
- Multiple pay rates are calculated and applied to the correct workers automatically for accurate paychecks and happy employees.
- Track and manage employee schedules to avoid under or overstaffing for better control over labor expenses.
Avoid Payroll Headaches
From shift differential pay to overtime pay, healthcare employers have many types of pay rates to oversee. Managing those pay rates no longer needs to be a headache with the right HR technology in place. By implementing a solution to accurately and efficiently pay your employees, you can dedicate your workday to more strategic HR and healthcare-related tasks.
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