Shift Differential: If an employee is paid a shift differential, this must be included in the calculation of the employee’s regular rate of pay used to compute overtime pay. Employees who earn shift differential must also have their “regular rate of pay” adjusted to reflect the shift differential. While not necessary, such structures can help employers track pay equity and enhance the employee journey. ... shift differentials, on-call pay and commissions. A Notice of Proposed Rulemaking is expected any day. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. It also failed to keep accurate records of all time worked. Shift differential pay will not be made for staff member’s non-work hours such as vacation, sick, and holiday leaves. Q. Dwayne … There’s no exception to this rule; it’s federal law. The regular rate of pay often is a complex formula that includes all “remuneration” provided for hours worked, such as hourly pay, shift differentials, salaries, piece rates, commissions, and most bonuses. The main question you have to ask is: what kind of non-working day is this? What Perks Must Employers Include in Overtime Pay Calculations? For example, if your regular pay rate is $10.42 and your overtime differential is 1-1/2, multiply $10.42 by 1.5. As an example, if the normal hourly rate is $12.50 per hour, and an employee receives a shift differential of $1.50 per hour, the regular rate of pay for that employee would be $14.00 per hour. Is it a rest day, a regular holiday, or a special non-working day? If the employee makes $10.00 per hour, then the overtime rate is $15.00 per hour [1 ½ times $10.00 = $15.00]. Yes, all shift differential pay must be included in the calculation of the regular rate of pay used to compute an employee's overtime rate. Shift Differentials -- Some employers pay a shift differential if an employee works at night, on Sundays, or on holidays. 306.4 PAID TIME OFF (PTO), SICK LEAVE, AND HOLIDAYS The employee worked 45 hours, 30 of which were during evening shifts, in a week. Employer practices vary widely on this issue. Hello, Yes, under the Fair Labor Standards Act, shift differentials must be included when calculating the employee's "regular rate of pay" for purposes of calculating overtime. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. Both employers also failed to maintain accurate time and payroll records, as required by law. Alleging violations of the federal Fair Labor Standards Act (FLSA) and New York’s Labor Law (NYLL), the 17-page case claims the failure of the defendants, who together manufacture stickers, to include the extra shift differential pay in overtime calculations was intentional and caused workers to … In addition to her basic 40 hour week, the employee works 32 hours of regularly scheduled nondive overtime between the hours of 3 p.m. and midnight (no night differential is payable since a majority of the employee's nonovertime hours were worked outside the parameters for night differential). A shift differential, or shift pay, is a premium employers pay to employees who work outside of normal business hours. An employee who makes $10 per hour will receive $15 per hour for holiday pay if they are paid time and a half ($10 x 1.5 = $15). If the differential is less than 50% of the employee's hourly rate of pay, it must be included in the calculation of the regular rate of pay used to compute the employee's overtime rate. At Bloomington, East, Kokomo, Northwest, and Southeast Indiana University will provide shift differential pay in the form of extra pay to Police Officers who work late night or early morning hours: 6pm to 5:59am. By failing to include the $2.00 shift differential into the Regular Rate, the employer would be paying only $15.00 per hour of overtime instead of $18.00. 4.4 Shift differential is added to an eligible employee’s hourly rate for evening or night shift hours actually worked. "The once seemingly impossible became quickly possible," Krispy Kreme's Terri Zandhuis said. Add the shift differential to the base wage, and then calculate overtime based on this combined figure. Multiply your regular pay rate by the overtime differential. 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Overtime team of attorneys can help employees collect the owed overtime, plus liquidated damages in an additional amount of the same owed overtime, and attorney’s fees and costs. Night Pay differential is in addition to overtime, Sunday, or holiday pay, and it is not included in the rate of basic pay used to compute overtime, Sunday, or holiday pay. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. (5 CFR 550.122(c)) Night shift differentials are included in the rates of basic pay for wage employees and are used as a basis for computing overtime Subscribe to HR Dive to get the must-read news & insights in your inbox. Overtime pay is 1 ½ times the employee’s “Regular Rate.” In many situations, the “Regular Rate” is simply the hourly pay rate. Different workweeks may be established for different employees or groups of employees, but averaging hours over two or more weeks is not permitted. By failing to include the $2.00 shift differential into the Regular Rate, the employer would be paying only $15.00 per hour of overtime instead of $18.00. The Ken S. Nugent, P.C. Employees are required by law to have at least one day (a full 24 hours) off every week. 5541 (2) is covered by the night pay provisions, including employees under the General Schedule. A. Non-discretionary bonuses include those that are offered to employees to encourage them to work more steadily, rapidly or efficiently, and bonuses designed to encourage employee… Night shift differential is included in the rates of basic pay for prevailing rate employees and is used as a basis for computing overtime pay, Sunday pay, holiday pay, and amounts of deductions for retirement and group life insurance. Employees working holiday shifts usually receive time and a half. The employee’s Regular Rate is $10.00 per hour plus this extra $2.00 per hour. 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