How Are Overtime Wages Calculated If I Earn Shift Differential Pay?
The Fair Labor Standards Act (FLSA) and many state laws generally require employers to pay their workers time and a half (1.5) of their “regular rate of pay.” However, an employee’s “regular rate of pay” is not always the same as their “base rate.” Therefore, an employer must include all pay or remuneration in the overtime wage calculation – including shift differentials.
Below are two examples illustrating how employers should include shift differential pay in their overtime calculations:
- Employee 1: Earns a base rate of $10.00 an hour and works 60 hours a week. She does not receive a shift differential. Employee 1 is entitled to 20 hours of overtime pay calculated at 1.5 times her regular pay rate. Employee 1’s regular rate of pay (RROP) remains the same as her base rate because there is no shift differential pay.
$10.00 x 60 hours = $600.00 (straight pay)
$600.00 ÷ 60 hours = $10.00 (RROP)
$10.00 x .5 = $5.00 an hour (overtime premium)
$5.00 x 20 hours = $100.00 (overtime pay)
Total Pay: $700.00
- Employee 2: Earns a base rate of $10.00 an hour and works 60 hours a week. She was paid an extra $2.00 an hour for 10 hours because she worked the night shift. Employee 2’s regular rate of pay (RROP) increases to $10.33, and her overtime premium increases to $5.17 per hour because the RROP calculation included her shift differential pay.
$10.00 x 60 hours = $600.00 (straight pay)
$2.00 x 10 hours = $20.00 (shift differential pay)
$400.00 + $20.00 = $620.00 (total remuneration)
$620.00 ÷ 60 = $10.33 (RROP)
$10.33 x .5 = $5.17 (overtime premium)
$5.17 x 20 hours = $103.40 (overtime pay)
Total Pay: $723.40
FLSA Shift Differential
Although the regular rate of pay (RROP) increase seems small in the above example, the difference can accumulate over time. The FLSA permits employees to recover up to three (3) years of unpaid overtime.
Further, employees can recover liquidated damages or an amount equal to what they should’ve received under the FLSA unless the employer can prove they acted in good faith and had a reasonable belief they acted in compliance. Additionally, employees can recover attorneys’ fees and costs under the FLSA. Many states’ laws also allow financial recovery.
Victims of Unpaid Bonus Overtime
Healthcare workers, home caregivers, and shift workers are routinely victims of incorrect overtime pay. Employers fail to include several types of pay when calculating overtime in an effort to increase their profits. Common examples include:
- Shift differential pay
- Incentive pay
- Covid pay
- Non-discretionary bonuses
- Commissions
Contact Us to Recover Your Shift Differential Overtime
If you earn shift differential pay or other pay such as commissions, incentive pay, Covid pay, or non-discretionary bonuses and work overtime, you may qualify for additional overtime wages. Let the experienced attorneys at Bohrer Brady, LLC review your pay to determine whether your employer owes you further compensation for your hours worked.
There is no charge for an initial, confidential consultation, and we will contact your employer. Our firm handles cases on a percentage basis, and most times, the employer must pay the attorneys’ fees and costs. You may be entitled to additional overtime pay, liquidated damages, attorneys’ fees, and costs.
Call or contact us today to receive the shift differential pay you deserve.
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