You ask three of your trusty employees to work an overnight shift to restock the store for the next day. A guard who works from 3 p.m. to 11 p.m. earns $16.50 per hour ($15 basic rate x 1.1 shift differential). An employee works as a nurses’ aide on a full time basis at $11 per hour. CRM software helps businesses manage, track, and improve all aspects of their customer relationships. Freshworks CRM software caters to businesses of all sizes. If employees work all the hours that they are scheduled to work in a pay period, they are given a $100 bonus. On weekends, the employee fills in as a receptionist and is paid $8 per hour. OT rate x OT hours. Think of restaurant workers who might be both bartenders and waiters. Check out these alternative options for popular software solutions. Workplace Solutions. 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. If your employee runs into cash problems, a payroll advance could help. #block-googletagmanagerheader .field { padding-bottom:0 !important; } Yes. First, calculate her night differential pay for each of her hourly rates. Always check to ensure calculations comply with both federal and state law. Webpages on this Topic "Is Extra Pay Required For Weekend Or Night Work?" Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from the advertising side of The Blueprint and our objectivity is an integral part of who we are. Under the FLSA, the additional half-time compensation must be paid on the regular rate which is defined as the total remuneration divided by the total hours worked. Links to your state labor department can be found at www.dol.gov/contacts/state_of. The second Monday is a holiday and the employee works that day -- a total of 84 hours worked in the pay period, In addition, the employee receives a 10% post differential. Don’t confuse shift differentials with overtime pay, which is federally mandated and kicks in when a non-exempt employee works more than 40 hours in a standard workweek. FORM OF OTPAYMENT; Cash. See how your choices perform when evaluated side-by-side. You can offer a standard $5 increase for second shift hours and a $10 increase on third shift hours. See Regulations 29 CFR 778.101 and 778.601. See Regulations 29 CFR 778.107. She’s paid $20 per hour when she’s cooking and $15 per hour when she’s cleaning. When an employee is paid on an hourly basis only, the overtime premium is calculated as 1.5 times that hourly rate of pay. For purposes of calculating overtime pay, section 7(e) of the FLSA provides that non-discretionary bonuses must be included in the regular rate of pay. Let’s say your guards are paid at rates commensurate with experience. Normal work schedule requires more than 4 hours of work between 4:30 pm and midnight = 40 cents for the shift. Shift differentials A shift differential is a premium rate paid to an employee as extra compensation for working a less desirable shift. Chris’s gross pay for the night shift is: Shift differentials and overtime together can significantly increase your payroll costs. They all just look at you with blank stares. Shift differential pay. What is a common shift differential pay amount for hourly employees? 10to8 is a cloud-based appointment scheduling software that simplifies and automates the process of scheduling, managing, and following up with appointments. Does this bonus have to be included in the regular rate? Her regular rate equaled $8.50 and her half-time premium is $4.25. Learn how using our software-specific feature walk-throughs and how tos. Enter your email to get this free report, “The Top 25 Tax Deductions Your Business Can Take – And 5 You Can’t.”. Then, find the average hourly rate by dividing total gross pay before overtime by the number of hours worked. Next, determine her gross pay without overtime by multiplying each premium hourly rate by the number of hours spent in each role. While most businesses pay shift differentials as a percentage of an employee’s basic rate, you can express the differential as a dollar amount. You’ve extended your business hours for last-minute shoppers. Melanie’s gross pay before overtime is $230 ($180 cooking + $50 cleaning). Before sharing sensitive information, make sure you’re on a federal government site. Amounts typically range between 5 and 15 percent of base salary. Get trustworthy advice to help your business grow. Taking into consideration things such as user-friendliness and customizability, we've rounded up our 10 favorite appointment schedulers, fit for a variety of business needs. Overtime Computation under the 40 Hours System. She is paid on a 40-hour workweek overtime basis. For example, guards who work the second shift still earn $15 per hour, leaving them with $120 in gross pay ($15 x 8 hours). 1-866-487-9243, Administrator Interpretations, Opinion and Ruling Letters, Resources for State and Local Governments, Fact Sheet #54 – The Health Care Industry and Calculating Overtime Pay, An employee paid biweekly at a rate of $12 per hour plus a $100 attendance bonus, working a schedule of 56 hours per week as shown in the chart below, would be due overtime pay as follows, Severe Storm and Flood Recovery Assistance. .usa-footer .grid-container {padding-left: 30px!important;} To use this exception, an employer must have a prior agreement or understanding with affected employees before the work is performed. The most common statutory exclusions in the long term care industry are vacation, holiday, and sick pay. CoConstruct is easy-to-use yet feature-packed software for home builders and remodelers. This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations. Many industries pay shift differentials to employees who work outside regular hours, but differential amounts and when they’re offered vary by industry. 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 the past 25+ years, The Motley Fool has been serving individual investors who are looking to improve their investing results and make their financial lives easier. See Regulations 29 CFR 778.200 and 778.208. /*-->*/. 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). We've tested, evaluated and curated the best software solutions for your specific business needs. If the same employee, paid at $12 an hour with a $100 attendance bonus, worked the same scheduled time for the bi-weekly period, under the 8 and 80 system, the employee would have worked 8 hours of overtime on Wednesday and 8 hours of overtime on Friday during the first week and 8 hours of overtime on Wednesday and 8 hours of overtime on Saturday during the second week, and would be due overtime pay as follows: 112 hours worked x $12/hour + $100 (attendance bonus) =, $1,444 (total ST compensation) ÷ 112 hours =, $12.89 (regular rate) x 80 (straight time hours) =, $19.34 (overtime rate) x 32 (overtime hours worked) =, Total earnings for the bi-weekly period =. ©2019-2021 The Motley Fool. Some jobs may be governed by a different FLSA overtime threshold. The federal regulations regarding hours worked appear in 29 C.F.R. Under the 40-hour workweek overtime plan: All hours worked over 40 in a workweek Under the 8 and 80 overtime system: All hours worked over eight in a day and 80 in a 14-day work period. 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. Renee, who works at the same company, also earned $600. Melanie’s blended overtime rate is $43.13 ($28.75 x 1.5 overtime rate). For example, some small businesses offer customer support from 9 a.m. to 5 p.m. All remuneration for employment (including shift differentials and bonuses) except those payments specifically excluded by statute. The diner is 24/7, so Melanie works the night shift sometimes. #block-googletagmanagerfooter .field { padding-bottom:0 !important; } Employers also must include shift differential pay when determining an employee’s regular rate of pay. Under the FLSA, the formula would be $660/42 hours worked ($15.71) * 0.5 = $7.86 * 2 hours = $15.72. .manual-search ul.usa-list li {max-width:100%;} You calculate shift differentials in step three of the payroll process, which calculates gross wages. Registered nurses (RNs) at a skilled nursing facility are paid a basic hourly rate of $22 an hour. The RNs working the above schedule worked eight hours of overtime on three days: Wednesday and Friday of the first week and Wednesday of the second week. All rights reserved. See Regulations 29 CFR 778.107. All hours paid in cash at 1.5 times the employee’s hourly rate (plus differentials). Picture this: It’s the holiday season, and inventory is flying off the shelves at your store. Payroll software helps companies manage payroll and benefits processing. The “regular rate” includes an employee’s hourly rate plus the value of some other types of compensation such as bonuses and shift differentials.