Michelle Cohen Levy

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Understanding differential pay

| Oct 15, 2019 | Wage & Hour Laws |

Many in Fort Lauderdale define a workday as beginning at around 9:00 a.m. and continuing until 5:00 p.m. Indeed, this is standard work week recognized by most. Yet countless people work outside of these hours, plying their trades in the evening or late night. Working such a schedule an exact a physical and psychological toll on a person, yet there are some industries that demand that their practitioners be available at all times. 

Companies that operate within such industries often offer use shift differential pay as an incentive to get people to fill odd-hour shifts. Differential pay is an augmented pay rate paid to those who work outside of non-traditional hours. It is typically offered as an added percentage of the standard hourly rate for a position. For example, according to the compensation guidelines for the United States Office of Personnel Management, federal government workers who qualify as prevailing rate employees are eligible to be at a differential rate of an additional 7.5 percent of their average salary when the majority of their hours are worked between 3 p.m. to midnight, and 10 percent of their average salary if they work 11 p.m. to 8 a.m. (those whose schedules overlap the different differential time frames are paid at the rate for which they worked a majority of their hours). 

Given that differential rates are offered to government employees, one might assume that differential pay is a legal requirement. Yet according to the U.S. Department of Labor, it is left up to employers to determine whether or not to offer this benefit. Yet if a company does, and then subsequentially violates its own policies regarding differential pay (such as those of the OPM that were highlighted earlier), an employee may have justification to initiate legal action.