![]() Shift differential premiums vary depending on a number of factors, including job function, level of responsibility, influence of labor unions on specific jobs, location and type of shift. Paying shift differentials as a separate salary supplement or cash bonus avoids these problems and allows for variation in the payment of premiums as shifts change.įactors Influencing Shift Differential Premiums.If an employee moves to another shift, rescinding the premium requires a base salary cut, a difficult action to communicate to an employee without affecting morale and productivity. Providing premiums within base salary compounds the costs of regular salary increases, incentive payouts and other benefit costs.Although incorporating shift premiums into an employee's base salary might be the least difficult way to deliver them, problems can result from this approach: Only 2 percent of companies build shift differentials into salaries and pay a higher base salary. Most companies pay their salaried employees an additional percentage of base salary for working undesirable shifts (Figure 4). Methods for Calculating Shift Differentials: Salaried Employees Nearly one-fourth of companies with multiple shifts pay premiums to salaried employees working shifts other than regular workday shifts (Figure 3). Shift Differential Eligibility for Salaried Employees Methods for Calculating Shift Differentials: Hourly EmployeesĬompanies are nearly equally split on the method used to calculate shift differentials for hourly employees: 49 percent pay shift differentials as an additional flat amount per hour, and 47 percent calculate the differential as a percent of the hourly base rate (Figure 2). Hospitals and health care service organizations pay differentials more often than other types of organizations for holiday (78 percent) and weekend shifts (68 percent). In lieu of paying shift differentials, some companies compensate employees for working undesirable shifts with additional paid time off. Most companies with multiple shifts pay premiums to employees working second shifts, third shifts and holidays (Figure 1). Shift Differential Eligibility: Hourly Employees Shift differentials are more common in manufacturing and customer support jobs than other types of jobs. F or more about the survey sample, see "About the Survey" at the end of this article. These findings are discussed in detail below. In lieu of paying shift differentials, some companies compensate employees for working undesirable shifts with additional paid time off.Holiday shifts typically are paid at time and a half, or 1.5 times base rate. ![]()
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