$81 ($54 premium rate x 1.5 overtime rate). .homepage-block > .news-button {display:none} For example, if the employee worked 40 hours at $11 and 16 hours at $8, the following is the regular rate calculation: 40 hours x $11/hour + 16 hours x $8/hour =, $568 (total straight time compensation) ÷ 56 hours worked =, $15.21 (overtime rate) x 16 (overtime hours). The diner pays a $10 shift differential. What is a common shift differential pay amount for hourly employees? 3 evenings x 8 hours/evening x $1/hour (shift differential), Regular rate and half-time premium computation, $408 (total ST compensation) ÷ 48 (total hours worked) =, $ 8.50 (regular rate) + $ 4.25 (half-time premium) =, 8 overtime hours x $12.75 (overtime rate) =, Example: Two Different Shift Differentials. As their employer, you can take the same payroll deductions for their wages. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. These will be addressed specifically, below. For example in a 2 week period where Dwayne works 90 hours and 32 of those hours he earns an extra $1 in shift differential. 434.2 Night Differential 434.21 Policy. While employers are not required to pay their employees additional wages for overnight work, workers may find that wages can be higher on overnight shifts due to shift differentials. The additional half-time must be computed based on the regular rate of pay. Some employees have multiple hourly rates depending on the task they’re performing. Shift differentials don’t differ by employee: When you offer differential pay, you offer it to all employees who work those hours. Chris earns overtime for those three hours, calculated based on premium rate, $54 per hour. The FLSA requires overtime pay for the last three hours of his shift (35 hours worked + 8-hour shift = 43 hours). Melanie’s gross pay for the shift is $345 ($43.13 x 8 hours). Let’s say your guards are paid at rates commensurate with experience. The federal regulations regarding hours worked appear in 29 C.F.R. Think of restaurant workers who might be both bartenders and waiters. The assistant is paid $1 shift differential for each hour worked on the evening shift. Does this bonus have to be included in the regular rate for overtime purposes? Learn how real businesses are staying relevant and profitable (and are even growing) in a world that faces new challenges every day. Washington, DC 20210 The following applies: Night differential is paid in addition to any other premiums earned by the employee (see 434.8). All hours paid in cash at 1.5 times the employee’s hourly rate (plus differentials). Trying to decide between two popular software options? We may receive compensation from some partners and advertisers whose products appear here. This eight and eighty (8 and 80) exception allows employers to pay time and one-half the regular rate for all hours worked over eight in any workday and eighty hours in the fourteen-day period. Let’s say a hospital nurse, Chris, is working the overnight shift with a 20% differential on his $45 basic hourly rate. Normal work schedule requires more than 4 hours of work between midnight and 8:00 am = 50 cents for the shift. #block-googletagmanagerheader .field { padding-bottom:0 !important; } There was an error signing up. Check out these alternative options for popular software solutions. Our experts take you through step-by-step processes, providing tips and tricks to help you avoid common pitfalls along the way. If so, how does it need to be calculated? Then, find the average hourly rate by dividing total gross pay before overtime by the number of hours worked. Chris already worked 35 hours this week before going into the eight-hour shift. While most businesses pay shift differentials as a percentage of an employee’s basic rate, you can express the differential as a dollar amount. No. 4.15 Shift Differential Pay. We may receive compensation from partners and advertisers whose products appear here. When they work the night shift they are paid a shift differential of $2 an hour. Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from, and never influenced by, any advertiser or partner. Trump just signed off on a second COVID relief package, and it includes a lot -- such as simplified PPP loan forgiveness. Freshworks CRM software caters to businesses of all sizes. Hourly employees who work more than a 40-hour standard workweek are generally entitled to overtime pay, according to the Fair Labor Standards Act (FLSA). Shift 3 - paid when 1/2 of hours worked between midnight & 8:00 a.m. Must be applied to all hours worked in the entire shift. However, the FLSA does require that covered, nonexempt workers be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek. Chris’s premium pay is $54 per hour ($45 basic hourly rate x 1.2 shift differential). Welcome to WAGE//ADVOCATES – Wage, Hour, and Unpaid Overtime Lawyers. If an employee works overtime, must this bonus be included in their regular rate of pay for overtime purposes? 4.15.1 Shift differential is pay for working inconvenient hours and schedules authorized at the agency’s discretion. The diner is 24/7, so Melanie works the night shift sometimes. The jewelry store offers a 10% differential for second shift hours and a 20% differential for overnight hours (a night differential). You’ve extended your business hours for last-minute shoppers. There was a problem connecting. It’s hard to get employees to set their alarms for the middle of the night to get to work. Chris’s gross pay for the night shift is: Shift differentials and overtime together can significantly increase your payroll costs. Say that Scott earned $600 by working from 9 a.m. until 5 p.m. at $15 per hour for five days ($15 x 40 hours). A personal care assistant at an assisted living facility is paid $8 an hour and overtime on the basis of the 40 hour workweek system. For Melanie, that’s $28.75 ($230 / 8 hours). Registered nurses (RNs) at a skilled nursing facility are paid a basic hourly rate of $22 an hour. Fair Labor Standards Act (FLSA) FLSA Categories; Paid Time & Overtime; Compensatory Time; Shift Differential; Volunteers, Employees, and Independent Contractors; Knowledge Check; Department of Labor (DOL) Resources That one is easy! Looking to grow your skills? See Regulations 29 CFR 778.107. Webpages on this Topic "Is Extra Pay Required For Weekend Or Night Work?" Knowing that it won’t significantly affect how you do payroll, consider adding a shift differential the next time your business requires weekend or overnight work. Thank you for signing up. Thus, hospitals, residential care establishments, skilled nursing facilities, nursing facilities, assisted living facilities, residential care facilities and intermediate care facilities for intellectually and developmentally disabled individuals must comply with the minimum wage, overtime and youth employment requirements of the FLSA. Add in the differential pay before the overtime rate. Guards work in three shifts: 7 a.m. to 3 p.m., 3 p.m. to 11 p.m., and 11 p.m. to 7 a.m. When they work the night shift they are paid a shift differential of $2 an hour. Although the Fair Labor Standards Act (FLSA) does not require private employers to provide differential or premium pay to employees (outside of overtime pay of time and a half over 40 hours in a workweek), many employers will reward their employees with additional pay in various situations Our full review breaks down features, customer support, pricing, and other aspects of this platform. The FLSA requires employers pay overtime hours at 150% of an employee’s hourly pay, also known as time and a half, after 40 hours of work in a week. (See 5 U.S.C. Under the FLSA, the formula would be $660/42 hours worked ($15.71) * 0.5 = $7.86 * 2 hours = $15.72. .usa-footer .grid-container {padding-left: 30px!important;} The right product depends on who you are and what you need – but regardless, you want the best. @media only screen and (min-width: 0px){.agency-nav-container.nav-is-open {overflow-y: unset!important;}} Note: General Schedule employees are covered by a separate night pay authority. This guide will help you find some of the best construction software platforms out there, and provide everything you need to know about which solutions are best suited for your business. 1-866-4-US-WAGE Melanie’s blended overtime rate is $43.13 ($28.75 x 1.5 overtime rate). The site is secure. We explore how to calculate them and the most common questions about the process. Before sharing sensitive information, make sure you’re on a federal government site. She is paid on a 40-hour workweek overtime basis. Overtime compensation must be calculated on the regular rate, which will exceed the hourly rate when shift differentials are paid. Workplace Solutions. First, calculate her night differential pay for each of her hourly rates. Non Union Shift 2 - paid when at least ½ of hours worked are between 4:30 p.m. and midnight the following day. #views-exposed-form-manual-cloud-search-manual-cloud-search-results .form-actions{display:block;flex:1;} #tfa-entry-form .form-actions {justify-content:flex-start;} #node-agency-pages-layout-builder-form .form-actions {display:block;} #tfa-entry-form input {height:55px;} Her entire shift is subject to both shift differential and overtime pay. Her regular rate equaled $8.50 and her half-time premium is $4.25. Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. If your employee runs into cash problems, a payroll advance could help. Now we’ve launched The Blueprint, where we’re applying that same rigor and critical thinking to the world of business and software. Hourly Rates / Hourly Shift Differentials. In computing an employee’s regular rate under the 40 hour overtime system, the employer must add half of the bi-weekly bonus ($50) to the employee’s earnings (hourly rate times the total hours worked) for that week. Dwayne has earned $8.25 during 58 hours and $9.25 for 32 hours. Since regular hours of operation vary by industry, so do the hours that offer differential pay. FORM OF OTPAYMENT; Cash. The retention bonus must be included in the regular rate calculation in overtime weeks covered by the bonus period. All hours paid in cash at 1½ times the employee’s hourly rate (plus differentials). That is, the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs.