Shift differential pay must be included in the calculation of a staff member’s regular rate for overtime pay purposes. 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… The most frequently offered type of differential pay is given for specific work shifts and is … Earlier this year, the 4th Circuit shot down a "blended rate" that used a single rate for all hours worked, both overtime and non-overtime hours. It also failed to keep accurate records of all time worked. For example, if your regular pay rate is $10.42 and your overtime differential is 1-1/2, multiply $10.42 by 1.5. Their regular rate of pay for the week is $17.21 per hour (($769.23 salary + $40 shift differential) / 47 hours). A Notice of Proposed Rulemaking is expected any day. This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. Workers frequently ask us – should my bonus be included in my overtime pay rate? It can even include meals! (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 There’s no exception to this rule; it’s federal law. Shift Differentials -- Some employers pay a shift differential if an employee works at night, on Sundays, or on holidays. What Perks Must Employers Include in Overtime Pay Calculations? 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. Here are two rules to consider when calculating overtime pay: Do not include in the 40 base hours such special hours as holidays, jury duty, sick time, or vacations. Employees are required by law to have at least one day (a full 24 hours) off every week. says, EEOC to update conciliation process as Trump administration enters final days, Biden taps former union president for labor secretary, EEOC takes second swing at wellness rules, Employers may take FFCRA tax credit for leave through March, Labor Department says. The employers paid less overtime than was due because they failed to include shift bonuses and shift differentials when computing overtime pay. 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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 … Subscribe to HR Dive to get the must-read news & insights in your inbox. Is this in compliance with the FLSA overtime standard? While shift differentials are entirely up to a company, they have to be included in overtime pay calculations. Therefore, the overtime rate for that week is $25.82 per hour. Both employers also failed to maintain accurate time and payroll records, as required by law. The Ken S. Nugent, P.C. The differential may not be counted toward overtime pay that might be due - the regular rate is simply higher because the hourly rate itself is higher. 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. An individual who meets the definition of "employee" in 5 U.S.C. Yes, because you work six hours, and the minimum wage for your workday that includes a split shift is $77 (6 hours times $11 plus an additional $11 for the split shift premium). Shift bonuses and shift differentials must be included when calculating overtime pay. After an investigation by the U.S.Wage and Hour Division, Hubbell Inc. will pay $138,753 in back wages and liquidated damages to 829 employees for violating overtime and record keeping provisions of the Fair Labor Standards Act (FLSA) at its distribution facility in Jefferson, Georgia. The employee worked 45 hours, 30 of which were during evening shifts, in a week. 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. 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. (See 5 U.S.C. When an employer offers workers a shift differential, that rate of pay must be used to determine the employee’s overtime earnings if she works more than 40 hours in a … A shift differential, or shift pay, is a premium employers pay to employees who work outside of normal business hours. This web site is designed for general information only. 7. If your employer uses a double time rate, multiply your regular rate by two. The free newsletter covering the top industry headlines. 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. An employee is entitled to compensation for overtime as provided by federal and state law. Employees working holiday shifts usually receive time and a half. 4.4 Shift differential is added to an eligible employee’s hourly rate for evening or night shift hours actually worked. The regular rate of pay is calculated by determining the staff member's total pay for the workweek, including base rate, shift differential pay, etc. Overtime pay must be calculated as 1.5 times your employee’s hourly pay, including shift differential pay. The FLSA requires that covered nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and a half for hours worked beyond 40 in a given week, though many states and municipalities have more stringent requirements. 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