Healthcare hiring practices often include hands-on assessments where candidates demonstrate their clinical skills or shadow current staff. These “working interviews” serve as valuable evaluation tools, but they carry significant legal implications that many practices overlook. Working interview compensation represents a compliance landmine that has caught numerous healthcare employers off guard.
At HR for Health, we want to make sure that your practice is aware of common compensation issues and how to avoid them. What do you need to know about working interview compensation?
What are Working Interviews in Healthcare?
Working interviews take many forms in healthcare settings, from dental assistants positioning patients for X-rays to nursing candidates administering medications during trial shifts. Unlike standard interviews, where candidates simply answer questions, working interviews involve candidates performing actual job duties that may benefit the practice.
These assessments have gained popularity as healthcare employers seek to evaluate practical skills beyond what resumes and credentials reveal. A medical assistant candidate might process actual patient appointments while being observed, or a physical therapist might conduct real treatment sessions under supervision.
The value of working interviews lies in their ability to demonstrate real-world performance. However, this practical benefit creates a legal obligation when candidates perform work that would otherwise require paid staff to complete. The line between evaluation and exploitation becomes critically important to distinguish. Candidate compensation is key.
When Working Interviews Require Compensation
The Fair Labor Standards Act (FLSA) provides clear guidance on compensating individuals who perform work, regardless of their employment status. When candidates perform duties that generate value for the practice, compensation becomes legally required. The Department of Labor has repeatedly clarified that “auditions” don’t exempt employers from wage obligations when productive work occurs.
Federal regulations apply a simple test: if regular employees would be paid for performing the same tasks, interview candidates must receive compensation too. This standard doesn’t consider whether the work was voluntary, beneficial to the candidate’s experience, or temporary in nature.
Identifying Compensable Activities
Healthcare working interviews frequently involve tasks that clearly qualify for compensation. Direct patient interaction, whether taking blood pressure, conducting eye exams, or providing hygiene services, constitutes compensable work when it displaces regular staff duties.
Documentation activities represent another commonly overlooked category. When candidates enter data into electronic health records, complete insurance forms, or update patient files, they perform essential administrative work deserving compensation. These tasks directly contribute to practice operations and should be treated as paid work.
Equipment maintenance and preparation activities also qualify for payment. Sterilizing dental instruments, preparing exam rooms, or organizing medical supplies all involve productive labor that benefits the practice. Even brief periods performing these duties trigger compensation requirements.
The critical factor remains whether tasks performed during the interview provide actual benefit to the practice. If a dental hygienist candidate cleans teeth for real patients while being evaluated, that work generates revenue and requires payment. Comprehensive time tracking ensures accurate documentation of all compensable time.
The Risks of Unpaid Working Interview Compensation
Failing to compensate candidates properly exposes practices to multiple legal and financial risks. Department of Labor investigations often result from complaints by unsuccessful candidates who later learn they should have been paid for their interview time. These investigations typically examine not just the specific complaint but broader payroll documentation practices.
Back pay claims can accumulate quickly when multiple candidates file grievances. A dental practice facing claims from 20 unpaid working interviews over two years might owe thousands in retroactive wages plus penalties. These settlements often exceed the original cost of proper compensation by significant margins.
Common Misunderstandings About Working Interviews
- “It’s just an audition” misconception. Many practice managers operate under dangerous misconceptions about working interview compensation requirements. The notion that candidates are “just auditioning” fails to recognize that performing productive work creates employment obligations, even temporarily.
- Observation vs. productive work confusion. Another prevalent myth suggests that observation equals exemption from wage laws. While truly passive observation may not require compensation, the moment candidates engage in productive activities, even under supervision, payment becomes mandatory.
- Experience as compensation myth. The “mutual benefit” argument also fails legal scrutiny. Although candidates gain experience during working interviews, this doesn’t offset the employer’s obligation to pay for work performed.
- Hiring outcome affecting compensation rights. Some people believe that unsuccessful candidates forfeit compensation claims, but employment law protects all workers regardless of hiring outcomes. Even candidates deemed unqualified retain the right to payment for work performed during the assessment process.
- Volunteering during interviews. The misconception that candidates can “volunteer” their time during working interviews ignores fundamental labor law principles. Even explicit consent to work without pay doesn’t legally absolve employers from wage obligations when productive work occurs.
Best Practices for Conducting Paid Working Interviews
- Create standardized assessment protocols. Implementing compliant working interview practices requires structured approaches and clear documentation. Start by creating standardized assessment protocols that differentiate between observation and productive work.
- Develop comprehensive agreements. Develop comprehensive candidate agreements that specify compensation rates before interviews begin. These agreements should outline exactly which activities qualify for payment and establish hourly rates comparable to regular employees performing similar tasks.
- Establish time tracking systems. Establish time tracking protocols specifically for working interviews. Just as regular staff clock in and out, candidates should record their productive work hours using the same systems.
- Create dedicated payroll roles. Consider creating dedicated interview roles in your payroll system to streamline candidate payments. This approach ensures proper tax withholding, provides necessary documentation, and integrates seamlessly with existing compensation structures.
Managing the Financial and Administrative Aspects
Processing candidate payments requires careful attention to tax and administrative requirements. Workers’ compensation coverage extends to working interview candidates when they perform actual job duties. This insurance requirement adds another layer of complexity and cost to the working interview process, reinforcing the value of alternative assessment methods when possible.
Some practices establish separate candidate payment funds to streamline reimbursement procedures. This approach ensures prompt payment upon interview completion while maintaining clear financial tracking for accounting purposes. Quick payment reduces candidate dissatisfaction and demonstrates professional integrity.
Integrating working interview compensation with existing payroll systems often proves most efficient. Rather than creating separate payment processes, treating interview candidates as temporary employees within the current framework ensures workplace compliance while minimizing administrative burden.
Let HR for Health Help You Avoid Common Working Interview Mistakes
Working interview compensation represents just one of numerous critical HR mistakes that can significantly impact healthcare practice success. From employment classification errors to leave management challenges, our professionals are here to help practice leaders identify and prevent costly mistakes before they occur. HR for Health can help you address industry-unique challenges while providing actionable strategies for building compliant HR systems. It would be our honor to help your practice establish strong hiring compliance measures that can withstand the toughest challenges. Contact us today to learn more about how we can help you.
