Shift Pay

smokey

We pay certain employees shift pay which is like salary by day. These are not exempt people. Does the new salary minimum ($455 week) affect this? Do we have to pay 1/5 of $455 per day or can we pay any amount?

santire

Forgive me for not understanding why you refer to shift pay being like salary when the employee is apparently non-exempt. Shift pay is typically an incentive for a non-exempt employee working certain less desirable shifts such as night verses day. However, as to the new salary figure of $455, it is not a minimum and is not related to characterizations such as shift pay. It is a floor. In other words, if someone is paid less than $455 per week (about $23,600 per year) the employee is classfied as nonexempt. If the employee is paid above the floor, the employee's exemption depends on fitting into one of the exempt classifications. Another rule will apply if the employee is paid more than $100,000 per year - that is a whole different subject. Now back to the question of prorating the $455 by 1/5. That depends on whether you pay the shift differential by the week or by the day. Regardless of how you prorate it over the week, as to the relationship between the $455 and the concept of shift pay, on one hand there is none. As described above, the $455 is a figure that distinguishes between a presumed non-exempt and the need to refer to the classification rules to determine the exemption. Assuming the employee is non-exempt, if the employee is paid a base wage in addition to the differential $455 per week, the shift differential would be averaged in with the base wage for 40 hours to compute the actual base wage for the employee and for purposes of calculating overtime. Hope this helps. Though the new rules are intended to simplify our dealing with exempt verses nonexempt, they are not all that simple.
Stanley P. Santire, J.D.

smokey

Thanks for the clarification on shift pay. You mention overtime. Does overtime have to be paid for work over the 8hour shift? Thank you again.

Don D

FLSA only requires that overtime be paid for all hours worked in excess of 40 in a work-week. Some states have daily overtime laws and some companies have such policies. The federal regs don't require over-8 overtime.

smokey

When I say shift pay I mean a certain amount each day. For instance $100.00 per day for each day worked. Most casinos use this type of shift pay. Hence my reference of "salary by day". We do also use hourly shift pay as an incentive but that does not have anything to do with my question. Hope this clarifies my question