Organizations with continuous, 24/7/365 operations face the challenge of recruiting and staffing employees to work beyond standard day shifts. An effective practice used by many employers is paying employees a premium to work undesirable shifts. Results from a recent Culpepper Pay Practices & Policies Survey highlight shift differential practices including eligibility and amounts paid. 

Shift differentials are additional pay premiums to compensate employees for working hours and shifts other than regular day shifts (typically 8am to 6pm, Monday through Friday).

Key Findings

• 92% of companies pay shift differentials to hourly employees.
• 36% of companies pay shift differentials to salaried employees.
• In addition to shift premiums, some companies also reward employees for working undesirable shifts with extra paid time-off for good attendance.

Shift Differentials for Hourly Employees
Most companies pay shift differentials to hourly employees working hours and shifts other than regular day shifts (Table 1).

Shift differential premiums for hourly employees are usually calculated as either a percentage of  hourly pay rate or as an additional flat amount. Premiums calculated as a percentage of hourly pay rate typically range between 5 and 15%. Premiums calculated as flat amounts typically range between $0.50 and $1.25 USD.

Shift Differential Eligibility for Salaried Employees
Approximately one-third of companies pay shift differentials to salaried employees working hours and shifts other than regular day shifts (Table 2).

Shift differential premiums for salaried employees are usually calculated as percentage of base salary. Amounts typically range between 5 and 15% of base salary.