Shift Differentials and Overtime Payment

Kerry, What are your thoughts on this issue?

Michelle

Michelle,

We have had a couple of interpretations as to how to calculate the overtime
for employees who receive a shift differential and wanted to ask for
assistance from you. The problem we are having deals with employees who
rotate shift. Please review the following scenario.

For a simple example with an ee at $10/hour and shift of $1/hour for the
Night (N) shift.

M T W Th F S

REG 8 8 8 8 8
OT 8
SHIFT N N D D D D

Interpretation 1

The shift differential would be added to his pay to determine the regular
rate of pay and his pay would be calculated as follows:

REG $400
SHIFT 16
OT 124.80 ((400+16)/40) x 1.5)

Interpretation 2

Since his overtime was during a day shift, his pay would be calculated as
follows:

REG $400
SHIFT 16
OT 120.00 (400/40 x 1.5)

Can you please let us know which interpretation is correct or if we have
totally missed the boat on both of them?

Thanks for your help,
Diane