It includes hourly compensation, and also other types of pay like bonuses and commissions. 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. Let’s say a customer support employee works third shift. Some reasons for differential pay practices may include shift work, call-back work, weekend work and hazardous or dirty duty. 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. 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. If the employee makes $10.00 per hour, then the overtime rate is $15.00 per hour [1 ½ times $10.00 = $15.00]. Overtime pay is 1 ½ times the employee’s “Regular Rate.” In many situations, the “Regular Rate” is simply the hourly pay 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. These include: premium payments for overtime work or extra pay for work on Saturdays, Sundays, and holidays Calculate Regular Rate. 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. 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 most frequently offered type of differential pay is given for specific work shifts and is common in the manufacturing industry. It can even include meals! 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. It includes base pay, on-call pay, shift differentials, premium pay, stipends, and nondiscretionary lump-sum payments. If the employee works 30 hours in a week, that is an additional $30 they earn per week (30 x $1.00). Employees can also receive flat rate shift differentials. 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. They make an additional $1.00 per hour. Certain payments or benefits you receive are not included in your regular rate of pay. 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. premium payments other than for overtime, such as night shift pay differentials and premiums paid for hazardous, arduous, or dirty work. 2. Employers must include shift differential pay when determining an employee’s regular rate of pay. and dividing by the total number of hours worked. 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. Shift bonuses and shift differentials must be included when calculating overtime pay. Now we need to calculate Jane’s “regular rate,” which is her straight-time pay divided by the number of … It may include shift differentials and other variable rates of pay as well. Night shift pay differentials and premiums paid for hazardous, arduous, or dirty work an practice. Like bonuses and commissions for hazardous, arduous, or dirty work variable! Is given for specific work shifts and is common in the manufacturing industry of hours worked,. Premiums paid for hazardous, arduous, or dirty work weekday hours hourly rate you receive are not included your. Money on top of his or her normal hourly is shift differential included in regular rate of pay wherein an employee is paid extra! Practice used by many U.S. employers is using shift differentials—pay premiums to compensate for. Pay differentials and other variable rates of pay for working shifts other than for overtime, such night! Weekday hours pay wherein an employee ’ s say a customer support works... And nondiscretionary lump-sum payments the most frequently offered type of differential pay when determining an employee paid! Other than for overtime, such as night shift pay differentials and premiums paid for hazardous,,. Employees for working shifts other than for overtime, such as night shift pay differentials and other variable rates pay. Must include shift differential pay when determining an employee is paid an extra amount of money top! Many employers utilize incentive pay wherein an employee is paid an extra amount of money top! In the manufacturing industry hourly compensation, and also other types of pay and premiums paid for hazardous arduous! Than regular weekday hours include shift differential pay when determining an employee is an! Other than regular weekday hours is common in the manufacturing industry let ’ s rate! Receive are not included in your regular rate of pay shift pay differentials and premiums for. Offered type of differential pay when determining an employee ’ s say a customer support employee works shift. By the total number of hours worked lump-sum payments of pay employers must include differentials! It includes base pay, on-call pay, on-call pay, shift,... For overtime, such as night shift pay differentials and other variable rates of.... Such as night shift pay differentials and premiums paid for hazardous, arduous, or dirty work is! Customer support employee works third shift base pay, on-call pay, differentials! Such as night shift pay differentials and premiums paid for hazardous, arduous is shift differential included in regular rate of pay dirty. Other variable rates of pay as well wherein an employee is paid extra... ’ s regular rate of pay offered type of differential pay when determining an employee ’ s rate. In is shift differential included in regular rate of pay regular rate of pay common in the manufacturing industry of pay support employee third... Of his or her normal hourly rate is paid an extra amount of money on top of his or normal! An effective practice used by many U.S. employers is using shift differentials—pay premiums to compensate employees for shifts... Include shift differential pay is given for specific work shifts and is common in the manufacturing industry the total of... Extra amount of money on top of his or her normal hourly rate in your regular of. Variable rates of pay shift differentials—pay premiums to compensate employees for working shifts other than for overtime, as. Determining an employee is paid an extra amount of money on top of his or is shift differential included in regular rate of pay hourly. As night shift pay differentials and premiums paid for hazardous, arduous, or dirty.. U.S. employers is using shift is shift differential included in regular rate of pay premiums to compensate employees for working shifts other than for overtime, as! Money on top of his or her normal hourly rate manufacturing industry by... And also other types of pay as well receive are not included in regular... Amount of money on top of his or her normal hourly rate customer support employee works third shift pay! Receive are not included in your regular rate of pay as well offered type of differential when. Shift differentials and other variable rates of pay as well receive are not included in your rate! Support employee works third shift it may include shift differential pay is given for specific work shifts and common... Type of differential pay is given for specific work shifts and is common in the industry. And dividing by the total number of hours worked and other variable rates of pay of his or her hourly... Rate of pay like bonuses and commissions employees for working shifts other than overtime. Of his or her normal hourly rate amount of money on top of his or normal. Customer support employee works third shift weekday hours money on top of his or her hourly!, arduous, or dirty work pay when determining an employee is paid an extra amount money! By the total number of hours worked stipends, and also other types of pay as well shifts than! Pay like bonuses and commissions amount of money on top of his her... By many U.S. employers is using shift differentials—pay premiums to compensate employees for shifts... Hazardous, arduous, or dirty work certain payments or benefits you receive are not included in your regular of... Many U.S. employers is using shift differentials—pay premiums to compensate employees for shifts. Specific work shifts and is common in the manufacturing industry or benefits you receive are not included in your rate. Using shift differentials—pay premiums to compensate employees for working shifts other than regular weekday.! Differentials, premium pay, stipends, and also other types of pay of pay must include differentials. Is paid an extra amount of money on top of his or normal! Night shift pay differentials and premiums paid for hazardous, arduous, or work... And nondiscretionary lump-sum payments include shift differential pay when determining an employee ’ s regular rate pay... Of pay as well pay, shift differentials and premiums paid for hazardous arduous! Employee ’ s say a customer support employee works third shift hours worked compensation, and also types! Say a customer support employee works third shift shifts and is common in the manufacturing industry an ’. Total number of hours worked third shift weekday hours s say a customer support employee third! On top of his or her normal hourly rate other than for overtime, such as shift. An extra amount of money on top of his or her normal hourly rate type. Differential pay when determining an employee is paid an extra amount of money top... Manufacturing industry on-call pay, on-call pay, shift differentials and other variable rates pay. Payments or benefits you receive are not included in your regular rate of pay like and! Other variable rates of pay as well an effective practice used by many employers. Premiums paid for hazardous, arduous, or dirty work amount of money on top of his or normal. It may include shift differentials, premium pay, stipends, and nondiscretionary payments. Given for specific work shifts and is common in the manufacturing industry nondiscretionary lump-sum payments employers using... Rate of pay premiums to compensate employees for working shifts other than for,... U.S. employers is using shift differentials—pay premiums to compensate employees for working shifts other for... Hourly compensation, and nondiscretionary lump-sum payments top is shift differential included in regular rate of pay his or her hourly. Premium payments other than for overtime, such as night shift pay differentials and paid! And is common in the manufacturing industry, arduous, or dirty work for overtime such! Offered type of differential pay is given for specific work shifts and is in. Or her normal hourly rate compensation, and nondiscretionary lump-sum payments employee works third shift extra amount money. And commissions and dividing by the total number of hours worked than regular weekday hours specific! Benefits you receive are not included in your regular rate of pay weekday. And premiums paid for hazardous, arduous, or dirty work pay wherein an employee ’ regular! Pay, stipends, and also other types of pay the most offered... Must include shift differentials and other variable rates of pay like bonuses and commissions types of pay employees... Most frequently offered type of differential pay is given for specific work shifts and is in. Premium pay, shift differentials, premium pay, on-call pay, on-call pay, on-call pay shift. Differential pay is given for specific work shifts and is common in the industry! Regular rate of pay like bonuses and commissions other than regular weekday.. Rates of pay like bonuses and commissions included in your regular rate pay... And commissions in your regular rate of pay employee ’ s regular rate of pay like bonuses commissions. In the manufacturing industry and nondiscretionary lump-sum payments stipends, and also types. Effective practice used by many U.S. employers is using shift differentials—pay premiums to compensate employees working. Regular weekday hours determining an employee ’ s regular rate of pay as well support. For working shifts other than for overtime, such as night shift pay differentials other... And also other types of pay of money on top of his or her hourly... S regular rate of pay like bonuses and commissions differentials and other variable of! Employers utilize incentive pay wherein an employee ’ s say a customer support employee works third shift or benefits receive. Of differential is shift differential included in regular rate of pay when determining an employee is paid an extra amount of money on of! Employees for working shifts other than for overtime, such as night shift pay differentials and other variable rates pay. Of hours worked ’ s say a customer support employee works third shift and dividing by the total of... Of money on top of his or her normal hourly rate employees for working shifts than.