A couple of weeks ago we posted a blog about shift differential pay for prevailing wage projects. While that may have confused many of you, we thought we should also cover shift differential pay overtime. Why not confuse you some more?
If you read that blog post – and really, you should have – then you know that the basic concept behind shift differential pay is that certain trades in certain counties require that shift differential pay be paid to employees who work on a prevailing wage job between certain hours. You also know that the shift differential pay rate is different by trade and by county so please be sure to check the DIR website for specific instructions pertaining to your trade and county. Given all that, you can probably image why calculating shift differential overtime pay can be slightly confusing… particularly when the hours the employee works are always different. This is predominately true for employees who start work in the evening or late at night, like highway workers.
Let’s consider an example. If a company has a road crew out on the site for more than 8 hours they must pay them overtime. You would think that it would be an easy calculation of time and a half, but if they are on shift differential, you must make sure that you are paying them the correct overtime rate based on the shift differential wage determination. For example, let’s say a road crew started work at 8:00 pm and finished up at 5:00 am. That is a 9 hour shift and subject to overtime. However, because its starting outside of the regular starting time for the shift, per the wage determination, it is also subject to shift differential pay. Which means that you have to remember to calculate their overtime rate based on the shift differential rate, not their regular rate. Seems easy enough right?
So, in the case of Operating Engineers in San Diego County, a crew working 1 hour of overtime, should be paid an additional overtime rate of $76.00, which is $.75 more than the regular overtime rate of $75.25. While this may not seem like a lot, it is important to note that on a crew of 10 guys working 9 hour shifts regularly, this can add up to a large cost to the employer, especially if there is an audit and it is found that they did not pay the appropriate wages.
Bottom line – make sure to check the shift differential provisions to ensure that your trade does not fall under their classifications.