Going over and above beyond working hours can be considered as a generous sacrifice by the employer. Also, the opportunity to work on a differential pay shift gives the employee a sense of recognition and dedication. Benefits of Shift Differential Benefits to EmployeesĮmployees benefit from shift differential pay by making additional money on top of their gross salary. So, if the employee works two shifts a month, they will eventually earn $200 as the differential pay. If a salaried employee earns $1000 per month, the employer might add 10% as the differential pay for every shift worked. Salaried employees, on the other hand, usually get it as a percentage.įor example, if an hourly employee receives a differential pay of 10% and earns $30 per hour during usual shifts, the employee would earn $33 per hour, with the $3 as the differential pay. The employer will consider factors such as an employee’s wages, experience, responsibilities, hours, and whether the employee is salaried or hourly.įor an hourly employee, the shift differential pay can come as an additional flat amount per hour or a percentage of the base rate. Typically, the employer will decide what differential pay an employee gets. So, if you’re still wondering which businesses offer shift pay, here are some of them: Therefore, industries offering the package can work up to 24 hours a day. For example, the banking industry doesn’t provide it because banks typically operate within regular business hours. Not all industries offer differential pay. So, let’s say if an hourly employee works during the weekend or at night, they might receive an extra $5 per hour. Although the federal employment act doesn’t recognize shift differential laws, unlike overtime, most premium employees still offer it as a way of motivating employees to take up those “undesirable” shifts.Ĭompanies usually offer differential pay for:Īlso, shift differential pay policy states that an employer must include shift differential pay in overtime calculations or face penalties. What is Differential Pay?Ī shift differential pay refers to additional compensation that an employee gets when working outside regular working hours. So in this article, we will discuss what shift differential pay is, how it works, and the kind of different industries that offer this premium package. It’s a simple way of rewarding and getting employees to work during odd but necessary hours. To unlock the standoff, most organizations offer shift differential pay to their employees. Scheduling employees to work during unpopular shifts that everyone doesn’t want isn’t an easy task.
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