how does shift pay work?

September 13, 2004 9:10 PM

Can anyone explain how "shift pay" works? [MI[

A friend of mine is getting paid 100 dollars per ten hour shift. However, on their paycheck, it looks like they're getting paid an hourly wage with "overtime". He works 5 shifts a week, 50 hours of work, but the pay stub says that they worked 40 hours of regular work and 22 hours of "overtime".

Now my friend is concerned because this doesn't make much sense. The hourly wage listed in 6.75 an hour for roughly 62 hours a week, but he really only works 50 hours a week and the hourly rate would then come out to 9.10 an hour. Now, the pay comes out correctly but if this is really "shift pay", why does an hourly rate and overtime appear on the paystub?

My friend talked to the people in charge of paying employees and was told that "this is what we feel comfortable paying you". He is starting to feel confused and is wondering if this is legal.

Also, he works as a cook in NYC if that helps at all.

posted by Stynxno to Work & Money (11 answers total)

Wow. I have never heard of anything like that.
posted by scarabic at 9:32 PM on September 13, 2004

It is not uncommon for hourly workers to earn either time-and-a-half or double-time for any hours over 40.

However doing some quick math I can't quite figure out what's going on in this case. The boss/owner's answer does sound shady, but it depends how your friend approached them... did they think he was asking for more money?

As long as he's paying taxes correctly, I don't think your friend would be the one to get in any trouble... more likely it's the owner's problem if something goes down.
posted by falconred at 9:38 PM on September 13, 2004

Is your friend working second or third shift at all? Could it be possible that he's earning more based on the hours he's working?
posted by drezdn at 10:19 PM on September 13, 2004

When I worked nights, I used to get paid a "shift differential" of 10% or so. It was basically a way for the employer to make the night jobs more attractive to potential employees. If his ten-hour shifts are overlapping into 2nd-shift or 3rd-shift work, he could be getting paid overtime for everything over 40 hours, plus an additional unknown amount for the hours he works at night.
posted by hootch at 10:30 PM on September 13, 2004

I have worked for a companies that would log us as working 12 hour days, regardless of how much time we really worked. Before hand, we each agreed to a flat, weekly rate, and they worked backwards from there to create the hourly. In general, we put in 9-10 hour days.

For us, I was guessing that it was to protect the company in case we actually did end up working longer hours, and so they wouldn't have to worry about keeping track of actual time, nor would they have to pay us more.
posted by thebigpoop at 10:31 PM on September 13, 2004

Stynxno, seems to me like the restaurant is doing some CYA. They want to pay $6.75 but know the employee deserves more. So that other, crappier, employees don't start wondering why *they* aren't making $9.10 and start demanding raises en masse, they make it look like he makes more because he put in more hours, meaning poor workers would have to work harder to get that pay. That way, even if your friend tells them why, management can safely lie and just say your friend is mistaken, that he really does just work a lot of hours.

It would also keep new employees from checking paystubs of older ones and guessing what they can work up to if they kiss the manager's ass.

I don't know if it's legal.
posted by shepd at 12:42 AM on September 14, 2004

I don't know about the legality of it either, but it certainly is unethical. Also, isn't overtime pay taxed at a higher rate than regular pay after a certain number of hours? Instead of being taxed on 10 hours of overtime pay, he's being taxed on 22. Not sure if I have the the tax info right, but if I do, then his net pay will be affected.
posted by boomchicka at 6:23 AM on September 14, 2004

I did the math and figure he's getting $9.85 an hour.

40 hrs * $6.75 + 22 hrs * $6.75 * 1.5 (time and a half) =
$270 + $222.75 = $492.75
$492.75 / 50 hrs = $9.85 / hour

If they made it 23 hrs overtime, he would get $10.06 / hour. Companies don't round in favor of the employee.
posted by smackfu at 7:38 AM on September 14, 2004

Here's a link explaining some of this.

It seems to me that if they want to work him more than 50 hours in the future - say, 65 hours - on those extra 15 hours they'd be obliged to pay him time-and-a-half overtime.

Naturally it's to their benefit that his hourly wage be listed as $6.75 in this case, and not $9.10.
posted by ikkyu2 at 9:08 AM on September 14, 2004

OK, it is illegal to report that you're working more time then you actually are. You can contact the Wage and Hour division of the Department of Labor if you're concerned.

Which you shouldn't be, unless they start stiffing you hours. I assume this is a mom and pop place.

A shift differential is different from overtime. You aren't getting a shift differential, you're merely getting overtime. Shift differentials are paid at either a flat rate or a percentage rate as an add on to hours worked during a certain shift. It's paid on top of overtime.

So if a nurse works all of Christmas, and happens to get >40 hours a week, she might get paid her usual wage (40 hrs * $20) + overtime (15hrs * 20$ * 1.5) + holiday pay (15hrs * $20 * .03) + shift pay (8hrs * $20 * .05).

In my example, her hourly pay is 20 dollars an hour, and she worked 55 hours in this week, 15 of them on christmas. 8 of those hours were in a night shift. Her holiday pay is a 3% bonus, and her shift pay is a 5% bonus.
posted by taumeson at 11:33 AM on September 14, 2004

I don't know if any states do it tihs way, but conceivably your hourly may determine what you get for unemployment if you are laid off. In this case it'll be less than it might otherwise have been.

But I would wager their reason has to do with their insurance or some other internal cost that goes up when they pay their employees more than $6.75 an hour.
posted by kindall at 3:11 PM on September 14, 2004