Pay Rate Increases for Licensed Physicians and Surgeons to Qualify for Overtime Exemption

California Labor Code section 515.6 exempts from overtime compensation certain licensed physicians and surgeons who receive set minimum hourly rates of pay. The California Department of Industrial Relations (DIR) is increasing this minimum, effective January 1, 2016.

To avoid this state’s requirements to pay premium rates after eight hours worked in a day or 40 in a week, employers will now have to pay eligible physicians and surgeons the minimum equivalent of $76.24 per hour, up from the current $75.19 rate.

To document qualification for this exemption, employers will need to pay the physician or surgeon the minimum hourly rate, keeping accurate track of hours worked. Physicians and surgeons paid on a lump sum salary (whether weekly or otherwise) will not qualify for this exemption.

Under Labor Code section 515.6, an employee is an exempt-from-overtime worker only if he or she is a licensed physician or surgeon “primarily engaged” (more than 50% of the time) in duties that require that licensure. California Business & Professions Code section 2052 specifies such duties, requiring a medical license for anyone who “diagnoses, treats, operates for, or prescribes for any ailment, blemish, deformity, disease, disfigurement, disorder, injury, or other physical or mental condition of any person.”

Employers relying on this exemption will of course need to implement this rate change by the January 1 deadline.

Licensed medical doctors may also qualify for other overtime exemptions, including the administrative, executive, or professional exemptions. Each such category carries its own distinct criteria.

For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth, November 9, 2015