Employees can also receive flat rate shift differentials. 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. Some reasons for differential pay practices may include shift work, call-back work, weekend work and hazardous or dirty duty. and dividing by the total number of hours worked. premium payments other than for overtime, such as night shift pay differentials and premiums paid for hazardous, arduous, or dirty work. If the employee makes $10.00 per hour, then the overtime rate is $15.00 per hour [1 ½ times $10.00 = $15.00]. The most frequently offered type of differential pay is given for specific work shifts and is common in the manufacturing industry. 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. 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. 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. Calculate Regular Rate. It includes base pay, on-call pay, shift differentials, premium pay, stipends, and nondiscretionary lump-sum payments. 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. 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. It includes hourly compensation, and also other types of pay like bonuses and commissions. Many employers utilize incentive pay wherein an employee is paid an extra amount of money on top of his or her normal hourly 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. 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. 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. 2. They make an additional $1.00 per hour. Overtime pay is 1 ½ times the employee’s “Regular Rate.” In many situations, the “Regular Rate” is simply the hourly pay rate. Now we need to calculate Jane’s “regular rate,” which is her straight-time pay divided by the number of … Let’s say a customer support employee works third shift. 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