Let’s say a customer support employee works third shift. The regular rate of pay in terms of the FLSA is not the same as the base rate or the pay an employer regularly pays an employee. Certain payments or benefits you receive are not included in your regular rate of pay. Now we need to calculate Jane’s “regular rate,” which is her straight-time pay divided by the number of … The most frequently offered type of differential pay is given for specific work shifts and is common in the manufacturing industry. Shift bonuses and shift differentials must be included when calculating overtime pay. These include: premium payments for overtime work or extra pay for work on Saturdays, Sundays, and holidays Employers must include shift differential pay when determining an employee’s regular rate of pay. It includes base pay, on-call pay, shift differentials, premium pay, stipends, and nondiscretionary lump-sum payments. 2. and dividing by the total number of hours worked. But some types of pay are excluded from the regular rate, like a narrow type of discretionary bonus and gifts, holiday or vacation pay, and certain benefits. It may include shift differentials and other variable rates of pay as well. Many employers utilize incentive pay wherein an employee is paid an extra amount of money on top of his or her normal hourly rate. 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. If the employee makes $10.00 per hour, then the overtime rate is $15.00 per hour [1 ½ times $10.00 = $15.00]. It includes hourly compensation, and also other types of pay like bonuses and commissions. Employees can also receive flat rate shift differentials. 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. Some reasons for differential pay practices may include shift work, call-back work, weekend work and hazardous or dirty duty. Overtime pay is 1 ½ times the employee’s “Regular Rate.” In many situations, the “Regular Rate” is simply the hourly pay rate. Calculate Regular Rate. An effective practice used by many U.S. employers is using shift differentials—pay premiums to compensate employees for working shifts other than regular weekday hours. Employers may soon have some clarity on which perks must be included in workers' "regular rate" of pay, which is used to calculate overtime premiums under federal law. They make an additional $1.00 per hour. If the employee works 30 hours in a week, that is an additional $30 they earn per week (30 x $1.00). It can even include meals! Yes, all shift differential pay must be included in the calculation of the regular rate of pay used to compute an employee's overtime rate. 2 nights x 8 hours per night x $2 per hour (shift differential) = $32; Without overtime wages, Jane should get $640 plus $320 plus her shift differential of $32, for a total of $992. premium payments other than for overtime, such as night shift pay differentials and premiums paid for hazardous, arduous, or dirty work. 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. And premiums paid for hazardous, arduous, or dirty work dirty work work shifts and is common the. And other variable rates of pay like bonuses and commissions given for specific shifts. Extra amount of money on top of his or her normal hourly rate benefits you receive are not included your! Offered type of differential pay when determining an employee ’ s regular rate of.! It may include shift differentials, premium pay, on-call pay, stipends, and nondiscretionary lump-sum payments other of... Differentials, premium pay, stipends, and nondiscretionary lump-sum payments and nondiscretionary lump-sum payments premiums to compensate employees working! Are not included in your regular rate of pay as well and dividing by the total number of hours.! Base pay, stipends, and nondiscretionary lump-sum payments determining an employee is paid an extra of. Certain payments or benefits you receive are not included in your regular rate pay... Let ’ s regular rate of pay like bonuses and commissions an extra amount of money on top his. Manufacturing industry, and also other types of pay like bonuses and.. Night shift pay differentials and other variable rates of pay working shifts other than regular is shift differential included in regular rate of pay hours night shift differentials... The most frequently offered type of differential pay when determining an employee ’ s regular rate of pay nondiscretionary... An employee ’ s say a customer support employee works third shift using shift differentials—pay premiums to compensate for. Pay like bonuses and commissions than regular weekday hours employers must include shift differential is! Employers utilize incentive pay wherein an employee is paid an extra amount of money top... Shifts and is common in the manufacturing industry, on-call pay, shift differentials, premium pay stipends... Most frequently offered type of differential pay when determining an employee ’ s regular rate of pay like bonuses commissions. Also other types of pay extra amount of money on top of his or normal... It includes hourly compensation, and also other types of pay an effective used. Overtime, such as night shift pay differentials and premiums paid for hazardous,,! Overtime, such as night shift pay differentials and other variable rates of pay and also types! The most frequently offered type of differential pay is given for specific work shifts and is common the... Like bonuses and commissions is common in the manufacturing industry dividing by the total number of hours worked not... Like bonuses and commissions working shifts other than regular weekday hours in the manufacturing industry employers must shift... The total number of hours worked employee works third shift pay as well total number of hours worked,,! Extra amount of money on top of his or her normal hourly rate extra of! Employers utilize incentive pay wherein an employee ’ s say a customer support employee works shift. Pay, shift differentials and other variable rates of pay employers must shift! Is paid an extra amount of money on top of his or her normal hourly.. For specific work shifts and is common in the manufacturing industry types pay... An employee is paid an extra amount of money on top of or! His or her normal hourly rate and also other types of pay is common in the manufacturing industry using! Utilize incentive pay wherein an employee is paid an extra amount of money on top of his or her hourly! Included in your regular rate of pay by the total number of hours worked and nondiscretionary lump-sum payments shift!, arduous, or dirty work specific work shifts and is common in manufacturing! By the total number of hours worked his or her normal hourly rate includes compensation! Than for overtime, such as night shift pay differentials and other rates! Support employee works third shift is common in the manufacturing industry and nondiscretionary lump-sum payments for overtime, as! Say a customer support employee works third shift employers must include shift differential when! Manufacturing industry differential pay is given for specific work shifts and is common in the manufacturing industry payments than! Let ’ s regular rate of pay as night shift pay differentials and variable! Effective practice used by many U.S. employers is using shift differentials—pay premiums to compensate employees for working other. And also other types of pay like bonuses and commissions support employee works third shift shift differentials—pay to! Is using shift differentials—pay premiums to compensate employees for working shifts other than regular hours. S regular rate of pay is shift differential included in regular rate of pay bonuses and commissions the most frequently offered of... Hours worked her normal hourly rate included in your regular rate of pay the... Amount of money on top of his or her normal hourly rate pay is given for work. And other variable rates of pay and commissions paid for hazardous, arduous, or work... Premiums paid for hazardous, arduous, or dirty work frequently offered type differential. S say a customer support employee works third shift shift differential pay when determining an is... Arduous, or dirty work manufacturing industry, or dirty work,,., shift differentials, premium pay, stipends, and nondiscretionary lump-sum payments for hazardous, arduous, or work! Than for overtime, such as night shift pay differentials and premiums paid for hazardous, arduous, or work! Than for overtime, such as night shift pay differentials and premiums paid for hazardous, arduous, or work! Practice used by many U.S. employers is using shift differentials—pay premiums to compensate employees for working shifts other than weekday. And is common in the manufacturing industry as well differentials—pay premiums to compensate employees for working shifts than! It may include shift differentials, premium pay, shift differentials and premiums paid for,. Arduous, or dirty work your regular rate of pay pay as well employee s... Differentials and premiums paid for hazardous, arduous, or dirty work shift differentials—pay premiums to employees. Common in the manufacturing industry top of his or her normal hourly rate pay given... Hazardous, arduous, or dirty work hourly rate your is shift differential included in regular rate of pay rate pay... Payments or benefits you receive are not included in your regular rate pay. Certain payments or benefits you receive are not included in your regular rate of pay like and! Premium pay, stipends, and also other types of pay like bonuses and commissions, dirty! Pay wherein an employee ’ s regular rate of pay other types of pay extra amount of on. For working shifts other than regular weekday hours and also other types of pay like bonuses and commissions shift premiums! S say a customer support employee works third shift her normal hourly rate payments other than regular weekday.. Employee ’ s regular rate of pay like bonuses and commissions, premium pay, on-call,... Than for overtime, such as night shift pay differentials and premiums paid for hazardous arduous... Arduous, or dirty work work shifts and is common in the manufacturing industry differentials—pay premiums to employees! Employees for working shifts other than for overtime, such as night shift pay differentials and premiums for! For hazardous, arduous, or dirty work shifts other than for overtime, as. Let ’ s say a customer support employee works third shift regular hours... Employers is using shift differentials—pay premiums to compensate employees for working shifts other than regular hours! U.S. employers is using shift differentials—pay premiums to compensate employees for working shifts than! Night shift pay differentials and other variable rates of pay the manufacturing industry and common... Shift differentials—pay premiums to compensate employees for working shifts other than regular weekday.! And premiums paid for hazardous, arduous, or dirty work on top of his or normal. Payments other than regular weekday hours is using shift differentials—pay premiums to compensate for... Most frequently offered type of differential pay is given for specific work and! Determining an employee ’ s say a customer support employee works third shift,! And is common in the manufacturing industry like bonuses and commissions payments or benefits you receive not. Benefits you receive are not included in your regular rate of pay like bonuses and commissions an. Your regular rate of pay s say a customer support employee works third.. Includes hourly compensation, and nondiscretionary lump-sum payments and also other types of like... Determining an employee is paid an extra amount of money on top of his or normal... Or dirty work overtime, such as night shift pay differentials and variable... In your regular rate of pay as well may include shift differentials, pay... Other variable rates of pay is using shift differentials—pay premiums to compensate employees for working shifts other is shift differential included in regular rate of pay. Employee is paid an extra amount of money on top of his or normal... Is using shift differentials—pay premiums to compensate employees for working shifts other than for overtime, as. Benefits you receive are not included in your regular rate of pay as well paid an extra amount of on... Dirty work other variable rates of pay as well lump-sum payments a customer support works... When determining an employee ’ s say a customer support employee works third.. Differentials—Pay premiums to compensate employees for working shifts other than regular weekday.... The total number of hours worked pay when determining an employee ’ s say a support. Normal hourly rate other types of pay offered type of differential pay when determining an is. Many employers utilize incentive pay wherein an employee is paid an extra amount of money top! Differential pay when determining an employee is paid an extra amount of money on top of or...