1. Human Capital Management Fundamentals Implementation Guide
  2. Shift-Rate Differentials

Shift-Rate Differentials

A shift rate differential is a flat dollar or percentage amount added to an employee's hourly rate. You set up shift rate differential codes to assign them to employees who receive additional compensation for shift work.

You assign shift differentials to UDC (user-defined code) 06/SH. You can also assign business units and union codes to shift differentials. When you define a shift differential, you must set effective dates for the table. The system compares the effective dates to the work dates you that enter in time entry.

A shift rate differential can be either a flat dollar amount or a percentage of the employee's hourly rate. The system calculates the pay using a flat dollar amount or a percentage shift differential with one of these methods:

  • Hourly rate plus the shift differential, multiplied by the pay type multiplier and then multiplied by the hours worked.

  • Hourly rate multiplied by the pay type multiplier plus the shift differential and then multiplied by the hours worked.

The difference between the two methods is significant only when a multiplier other than 1 is entered.

These methods are associated with the shift code that you set up. You can also associate these methods with pay types when you set up pay types.

If you want the system use the shift differential method associated with the pay type when you enter a timecard, you must set up shift codes and leave the shift differential method blank. When a shift code is entered on a time entry form, the system uses the shift differential method associated with the pay type from the Payroll Transaction Constants table (F069116) if it finds a blank shift differential method in the Shift Differential Table (F069246). The system also uses the shift differential method associated with the pay type when you don't enter a shift code.

Use shift code information to ensure that an employee is paid the correct amount for working on a shift with a rate differential. Use these guidelines for using shift code information:

  • If an employee always works a shift for which a shift rate differential is applicable, include the shift code in the Employee Master Information table (F060116).

  • If an employee occasionally works a different shift, you can override the information on the applicable timecard.