Skilled Nursing Facility (SNF) leadership and finance staff need to understand how to navigate the complex world of SNF payroll compliance, as it is an essential part of observing federal, state, and local regulations to protect their organization from potential fines and penalties and foster a positive work environment.
For skilled nursing facilities, regulatory compliance is not only crucial for avoiding legal trouble regarding SNF payroll, but it’s also an essential part of providing quality care nursing and maintaining the facility’s reputation. Thus, leaders should ensure their staff is well informed and well trained on compliance, as ignorance of compliance obligations is not a valid legal defense.
For SNF payroll, there are some tips that staff can immediately implement in facilities. These include:
- Keeping accurate personnel records: SNF financial staff should ensure they keep and maintain employee contact information, tax forms, hours worked, overtime, vacation, and sick leave. Doing so ensures compliance with labor laws and protects a facility in the event of a long-term care audit or employee dispute.
- Managing employee expectations: Nurses, therapists, and other facility staff must understand their rights and obligations related to payroll. This includes understanding their pay schedules, deductions, overtime policies, and benefits. Ideally, these should be provided as a written copy to each employee to avoid confusion and misunderstandings.
- Understanding workplace pensions: Pensions are a crucial part of employment, especially for your staff who have been in the facility for a long time. Therefore, SNFs should ensure they are transparent about contribution requirements, enrollment processes, and reporting guidelines. Also, long-term care facilities should verify that they comply with the Employee Retirement Income Security Act (ERISA) and other relevant regulations.
- Using audit trails: Audit trails are particularly helpful during internal and external audits. They ensure the accuracy of financial records by providing a clear history of all changes made to SNF payroll data. Here, effective long-term care financial software systems can be invaluable.
- Staying up to date with payroll legislation: Payroll legislation and regulations are constantly evolving, which is why financial staff in charge of SNF payroll should stay informed about changes to federal, state, and local payroll laws to ensure ongoing compliance. This includes minimum wage laws, tax withholding requirements, and overtime regulations.
- Speaking to external payroll experts: Sometimes, it may be best for a facility to consult with payroll professionals or legal counsel to ensure they abide by the necessary regulations. This is especially true for new facilities.
- Getting feedback from other employees: SNF financial staff can benefit from regularly soliciting feedback from nurses, physical therapists, and other staff in the facility. By doing so, they can identify any issues or areas for improvement and ensure payroll processes are as smooth as possible for all parties.
- Considering a self-service model: This means adopting a SNF payroll system where staff can access their pay information, submit time-off requests, and update personal information. Doing so reduces the potential for errors while ensuring compliance with labor laws.
- Submitting payroll information on time: Finally, SNF financial staff should ensure they submit all payroll-related information to the appropriate federal or state authorities on time. This includes tax withholdings, pension contributions, and other required reporting.
By following these nine tips, a skilled nursing facility can better navigate the complexities of payroll compliance while ensuring quality care for its patients and residents. In the next section, we will dive deeper into two pieces of legislation relevant to SNF payrolls.
SNF HR Payroll and the Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) was first introduced in 1938 and has undergone numerous amendments to establish minimum wage, overtime pay, recordkeeping, and youth employment standards. This piece of legislation affects all employees in the private sector and in federal, state, and local governments.
SNF HR payroll staff need to fully understand this SNF payroll regulation and some of what it covers, including:
- Minimum wage requirements: As of the writing of this blog, the federal minimum wage is set at $7.25 per hour, meaning SNF employees cannot be paid any less than this per hour. It is worth noting that some states have a higher minimum wage than the federal minimum. In this case, the facility would have to adjust its SNF payroll to meet the standards set in its residing state.
- Overtime: All non-exempt employees must be paid at least one and a half times their regular rate of pay for any additional hours over their regular 40-hour work week. However, facilities can use the alternative “8 and 80” system. In this system, nursing care facilities can compensate employees—with whom they have a pre-established agreement—for overtime when they work over eight hours in a single day and exceed 80 hours within a 14-day timeframe. One should note that executive, administrative, and professional employees may be exempt from FLSA overtime requirements.
- Record-keeping requirements: Staff information such as hours worked, wages paid, and deductions made must be accurately kept by the SNF for at least three years. Also, the facility must safely keep information such as full name, social security number, address, occupation, and date of birth if the person is under 19 years. Ideally, the facility would use long-term care software for this.
- Youth employment: For non-agricultural jobs, the FLSA establishes a minimum employment age of 14. Therefore, 14 and 15-year-olds are permitted to work limited hours each day (outside of school hours) in designated occupations that do not hinder their education, health, or overall well-being. As for 16 and 17-year-olds, they are allowed to work unrestricted hours in any position that has not been deemed hazardous by the Secretary of Labor.
Some additional facts worth mentioning: Non-exempt employees working in an SNF must be compensated for all work benefiting the employer, including work done outside of scheduled shifts. Volunteers who do not expect pay and do not provide substantial economic benefits to the facility are not considered employees under the FLSA and, thus, are not entitled to the same protections.
Contact us here if you would like to maximize SNF payroll compliance through a long-term care EHR.
CMS Payroll Based Journal: What You Need To Know
In the long-term care space, there has always been a need for transparency and high-quality care. To promote transparency and ensure quality care in SNFs, the Centers for Medicare & Medicaid Services (CMS) introduced the CMS payroll based journal (PBJ) system.
The CMS Payroll Based Journal is an electronic data collection system that captures staffing and SNF payroll information. Meant to be fully understood by SNF human resources departments, PBJ was introduced under the Affordable Care Act to ensure that SNFs meet the required staffing levels to provide high-quality care to residents.
To facilitate compliance and streamline reporting processes, the CMS provides access to the PBJ system at no cost to all long-term care facilities. To access the PBJ system, SNF HR payroll staff must ensure their facilities first complete the registration process. The necessary registration and training materials for SNFs and nursing homes can be found in the Downloads section of the CMS PBJ webpage. Some of its key aspects are:
- Reporting requirements: SNFs must submit, on a quarterly basis, comprehensive payroll data and staff information to the CMS.
- Data accuracy: The information submitted must be precise and up to date, as the CMS uses this data to assess staffing levels and overall quality of care in the long-term care facility. Any discrepancies or errors in the data can negatively impact a facility’s quality rating.
- Staffing levels: Since one of the primary goals of the PBJ system is to ensure adequate staffing levels in SNFs, facilities must maintain sufficient staffing levels.
- Five-Star Quality Rating System: Staffing is a crucial component of the five-star rating system, and this is obtained from PBJ data. Thus, facilities must submit accurate and timely information to maintain or improve their quality rating.
The CMS Payroll-Based Journal has a role in promoting transparency and enhancing the quality of care in SNFs. By fully understanding it, SNFs can ensure they maintain adequate levels of staff, ensuring quality care and better care outcomes for their residents.
SNF Payroll Compliance and Using the Right EHR
Electronic Health Record (EHR) systems have been a game-changer in long-term care since their introduction. They streamline various aspects of healthcare management, including SNF payroll compliance.
And the game is about to be changed once again, as Experience Care is just announced that we are developing a new long-term care payroll system that will be the most robust and intuitive on the market. The system integrates seamlessly with the General Ledger to simplify the process of recording payroll transactions, reducing the risk of errors, and enhancing overall efficiency.
Also, the payroll system has time-saving features and automation that save users approximately a workday each month. Further, we are constantly improving this long-term care software is constantly as we consult with our users on what features they would like to see added. With Experience Care’s new long-term care payroll system, facilities can streamline their payroll processes, save time, and improve overall data accuracy.
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