A special provision of the Fair Labor Standards Act allows hospitals and other health care institutions to average employee hours over a 14-day period instead of the usual single workweek overtime basis. Last week, the Department of Labor’s Wage and Hour Division issued an opinion letter that provides a liberal interpretation of facilities able to use this pay method. 

In the letter, a residential youth care facility asked whether it could employ the averaging method despite the fact that it is not a hospital or skilled nursing facility. The FLSA language applies this method to facilities “primarily engaged in the care of the sick, the aged, or the mentally ill.”

DOL responded that residential care facilities that provide non-critical care to patients who live on-site would qualify, as would facilities that care for emotionally disturbed persons and those that provide therapy to most residents through a licensed physician. While DOL does not conclude that the youth care facility in question meets this test, many of these types of residential care operations would qualify under this definition. Residential care employers that could qualify for the 14-day averaging method may want to check with legal counsel to determine if this allows more flexible scheduling without incurring overtime obligations.