Employers must include shift differential pay when determining an employee’s regular rate of pay. Here’s an example:
A personal care assistant at an assisted living facility is paid $8 an hour and overtime on the basis of the 40 hour workweek standard. She works three 8-hour day shifts at $8 an hour and three 8-hour evening shifts. The assistant is paid $1 shift differential for each hour worked on the evening shift. How much should she be paid for her 8 hours of overtime?
The additional half-time must be computed based on the regular rate of pay. The regular rate is defined as the total remuneration divided by the total hours worked. The assistant earned a total of $408 for the 48 hours that she worked ($8 an hour times 24 hours plus $9 an hour times 24 hours). Her regular rate equaled $8.50 and her half-time premium is $4.25. Her total earnings for the 8 hours of overtime are $102.
| Straight-time computation | |||
| 3 days x 8 hours/day x $8/hour | $192 | ||
| 3 evenings x 8 hours/evening x $8/hour | $192 | ||
| 3 evenings x 8 hours/evening x $1/hour (shift differential) |
$ 24 | ||
| Total ST earnings | $408 | ||
| Regular rate and half-time premium computation | |||
| $408 (total ST compensation) ÷ 48 (total hours worked) = | $ 8.50 (regular rate) | ||
| $ 8.50 (regular rate) x ½ = | $ 4.25 (half-time premium) | ||
| $ 8.50 (regular rate) + $ 4.25 (half-time premium) = | $12.75 (overtime rate) | ||
| Total compensation calculation | |||
| 40 hours x $ 8.50 (regular rate) = | $340 (straight time earnings) | ||
| 8 overtime hours x $12.75 (overtime rate) = | $102 (overtime earnings) | ||
| Total earnings |
$442 |
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Reference: OT with Multiple Rates? Weighted Rate OR Agreement HR Daily 10/13/2014.
