Opinion ID: 200756
Heading Depth: 3
Heading Rank: 1

Heading: Shift-Differential Pay

Text: 54 The case law is unequivocal that shift-differential pay must be included in an employee's FLSA regular rate. The Supreme Court has specifically interpreted § 207(e) of the FLSA to include such payments: 55 Where an employee receives a higher wage or rate because of undesirable hours or disagreeable work, such wage represents a shift differential or higher wages because of the character of the work done or the time at which he is required to labor rather than an overtime premium. Such payments enter into the determination of the regular rate of pay. 56 Aaron, 334 U.S. at 468-69, 68 S.Ct. 1186 (emphasis added). The Secretary of Labor has also clearly adopted this view. See § 778.207(b) (The Act requires the inclusion in the regular rate of such extra premiums as nightshift differentials....). 57 The Town argues that the shift differentials are properly excluded from the officers' regular rate under 29 C.F.R. § 778.206, which is entitled Premiums for work outside basic workday or workweek. That regulation is flatly inapplicable to shift differential payments. Section § 778.206 addresses the calculation of excludable contract overtime premiums under § 207(e)(7), and in the paragraph quoted above, the Supreme Court in Aaron held that shift-differential pay is not an overtime premium. The officers are entitled to have their shift-differentials included in their regular rate.