8/13/2023 0 Comments Weekend differential paySo, if an employee is paid $10 per hour, they must receive an additional $5 per overtime hour worked ($15 per hour overtime pay). Under the FLSA, overtime pay is calculated at one and a half times the employee’s regular hourly rate. In addition to the FLSA’s strict rules, some states even go further, mandating additional overtime pay in certain situations. Where it can become confusing is in calculating overtime. Because hourly employees already record their hours in your time keeping system, you will know exactly how much shift differential pay they’re entitled to. Hourly EmployeesĬalculating shift differentials for hourly employees is not as difficult as it may seem. For example, if you need an employee who makes $15 per hour to work security overnight at an apartment complex, you may offer them an additional $3 per hour in shift differential pay for hours worked between 8 p.m. You may also choose to offer premium pay based on the hours the salaried employee works, although this is more complicated and requires detailed timekeeping records, something salaried employees aren’t always ready to do. A percentage of the employee’s salary/hourly rate will be more difficult to calculate, whereas a flat supplement on every paycheck will make payroll easier on you. If you expect your salaried employees to regularly work odd or undesirable hours, you can add shift differentials to every paycheck (or as a quarterly or annual bonus), in the form of a flat rate or percentage. We discuss this further in our calculating shift differential pay section below. This requires a unique calculation to first determine shift differential pay and then overtime pay. While all your employees can be eligible for shift differential, only nonexempt employees will be eligible for both overtime pay and shift differential. Under the Fair Labor Standards Act (FLSA), exempt employees are not subject to overtime laws and, therefore, not eligible for overtime pay. Your business may have two different classes of employees: exempt and nonexempt. Companies are free to offer shift differentials to all or just certain classes of employees.īe aware of employee classification as it relates to shift differentials. However, some companies want to offer this benefit to salaried employees as well. In most cases, only hourly employees are eligible for shift differential. To adhere to accurate pay calculations around shift differential consider using payroll software. If your business is considering a shift differential policy for your employees, you may benefit from time tracking software to help keep employee hours straight.
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