Payroll
What is shift differential?
Also called: night differential, shift premium
A shift differential is extra pay for working a less desirable shift, such as nights or weekends, usually a flat amount per hour or a percentage of base pay.
No federal law requires it. It is a staffing tool: you pay more because the shift is harder to fill.
It does affect overtime. A differential is part of the regular rate, so overtime in a week that included premium hours is calculated on the blended figure, not the base wage.
Source: 29 CFR 778.108 (the regular rate)
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Related terms
Regular rate of pay
The regular rate is the hourly figure overtime is based on, and it is usually more than the base wage because it blends in nondiscretionary bonuses and shift differentials.
Overtime
Overtime is the extra pay a non-exempt employee earns for hours past 40 in a workweek, at no less than 1.5 times their regular rate under federal law.
Holiday pay
Holiday pay is pay for a holiday, either as paid time off or a premium for working it. Federal law requires neither for private employers.
General information for US employers, not legal advice. Wage and hour rules change and vary by state, so confirm specifics with your state labor agency or counsel.