By: Kathy Nicholls
Medical transcriptionists are often paid based on their production. In most cases, the compensation is based on how many lines a person can transcribe, which is multiplied by their rate per line. Sounds pretty straightforward, right? Of course, first that does presume you understand how a line is defined. We’ve had that discussion here many times so we won’t go into that one again right now.
One question that is often asked is when someone is paid on production, what about overtime pay? First, let’s be really clear that overtime is only something that is given to those who work as an employee of a company. It does not apply if you are an independent contractor. If you are classified, as some MTs have been, as a “statutory employee,” then it does apply to you. In the past, there has been a misunderstanding that overtime laws don’t apply to the statutory employee category; this is incorrect.
So how does it work? If you are an employee paid on production, are you eligible for overtime pay? In that same light, what other things might apply to compensation?
First, these issues are determined by the Fair Labor Standards Act. It requires that an employee who is “non-exempt” be paid at least minimum wage AND is entitled to overtime pay for all hours worked over 40 in a week. It would seem a simple thing, right?
You might ask why I am also including minimum wage in this discussion. When someone is just starting in this profession, it’s not uncommon for them to be slower than they will eventually be. If you are paid on production, that significantly decreases your income. At no time, however, should your pay be less than the Federal minimum wage of $7.25 per hour. That means gone are the days when new employees were told to just “work until you get your line quota in.” That doesn’t work without both being sure it it paid at least minimum wage and paying if the person works more than 40 hours in one work week. Yes, that does mean you should be keeping a timesheet for yourself and your employer. It serves as verification of hours worked. Remember, too, that your state laws may have a higher minimum wage. If that is the case, that’s the rate that should be used as the standard. For example, Oregon’s minimum wage is $8.40, so if you live in Oregon, that’s the figure you use. This applies based on where the employee lives and work, not where the employer is located.
Now let’s talk about overtime. You’ve all been there. The workload suddenly increases and everyone is asked to do a little extra to meet the deadlines for the customer. In that case, if you are an employee, you are entitled to be paid overtime pay at one and a half times your normal hourly rate.
I just heard you say, “hourly rate? I’m paid on production!” Yes, and you still have an hourly rate. The way to arrive at your hourly rate is take your total lines, times your rate of pay, and divide that by the total hours worked. That will give you your average hourly rate. Using that rate, you can then calculate what you are due in overtime pay. Let’s do an example for that:
Total lines for the week: 8,500
Line rate of pay: $0.08 per line
Total pay (lines times rate): $680.00
Total Hours Worked: 50 (You have 10 hours of overtime)
Your Average Hourly Rate: $13.60
Remember that while overtime is paid at one and a half times the hourly rate, your production pay above has already paid you for the hour, so what you’re missing is the “half” of the overtime pay. So, for each hour of overtime pay, you would get an additional $6.80, for a total of $68.00 ($6.80 times the 10 hours of overtime).
Your Total Pay: $748.00
The law also says it is not okay to “average” two weeks of hours, nor is “compensated time, or comp time” okay to use in lieu of paying overtime. It also specifically says that an agreement between and employer and employee does not negate the employee’s right to overtime pay. Many times an employer will say overtime is not allowed unless it is preapproved. Even that does not negate the law. I’ve heard MTs talk about being the only person working a graveyard shift where a stat report came in and it had to be done, throwing that person into an overtime situation. What IS okay there is for your employer to ask you to take that extra time off on another day, as long as it’s in the same week. If it happened to be the last day of your work week, then overtime applies.
While it’s easy to say employers are responsible here, I believe medical transcriptionists have a responsibility to know and understand what their rights are. When interviewing for a position as an employee, this is definitely a topic you should cover! It is a part of understanding fully how you are compensated.
Have you had a time when you had to deal with the issue of either minimum wage or overtime pay? If so, let’s chat about how you handled it!
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