Example: Shift 1: 8:00 a.m. 5:00 p.m. Shift 2: 5:00 p.m. 2:00 a.m. ($2.00 differential)

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1 Using Shift Differentials Shift differentials are set amounts paid to employees who work non-standard hours. Shift differential amounts are added to an employee s base rate of pay. Example: Shift 1: 8:00 a.m. 5:00 p.m. Shift 2: 5:00 p.m. 2:00 a.m. ($2.00 differential) Employees who work Shift 1 receive their regular hourly rate of pay. Employees who work Shift 2 receive their regular rate plus an additional $2.00 per hour. This training explains how to set up shift differentials in Time and Labor Online and include shift differential information in the Paychex Preview Export Report Paychex, Inc. All rights reserved. TLO

2 Creating a Shift Differential Policy Access shift differential policies from the Configuration page of the Admin tab. Click Shift Differentials beneath the System heading. (1) To create a shift differential policy: 1. Click Add. (2) 2. In the Shift Differential Policy section of the screen, enter a policy name. The policy name should indicate the shift it applies to (e.g., Shift 1, Night Shift, etc.). 3. Click Update. (3) You can create multiple shift differential policies based on your company s needs. An employee can only be assigned to one policy. Shift differential policies for employee s who work more than one shift can include details for more than one shift Paychex, Inc. All rights reserved. TLO

3 Advanced Differential Rules Advanced differential rules let you specify how differentials are calculated when the time an employee works spans more than one shift. When the advanced differential rules are not enabled and hours worked span multiple shifts, the differential calculation for each shift applies to the exact amount of time worked in each shift. Example: An employee works from 8:00 a.m. to 6:00 p.m. He will be paid his regular hourly amount for his work time in Shift 1 (8:00 a.m.-5:00 p.m.), and he will be paid his regular hourly amount plus the shift differential amount for the time he worked in Shift 2 (5:00 p.m.-6:00 p.m.). When the advanced differential rules are enabled, you can choose to have the shift differentials calculated based on: the shift in which the employee worked most of his hours, or the shift used when the employee first clocks in. When calculating the differential in which the employee worked most of his hours, two options are available: If the advanced differential rules are used, shift rules must be in place to account for all 24 hours in the day. The shift code identifies the shift and differential rule. If you use shift differentials within the Paychex preview payroll software, the Time and Labor Online shift code must match the one-character code used to identify the shift in Preview. Otherwise, descriptive text may be used in this field (for example, Day Shift, Night Shift). Day: All time allocated to a day (as specified on the time sheet) is paid at the rate for the shift with the most worked time in it. Shift Group: All shifts worked in a day are treated as separate entities, allowing rounding to be done between clock-in and clock-out times for each shift, not the first clock-in of the day and the final clock-out of the day Paychex, Inc. All rights reserved. TLO

4 Shift Rules Once you have created a shift differential policy, you define the shift rules associated with the policy. To add a rule to the policy, navigate to the Shift Differentials page (Admin tab Configuration Shift Differentials) and follow these steps: 1. Click Add Rule. (1) 2. Enter a shift code. 2. Enter a shift code. 3. Enter the shift s start and end time. Either standard or miliary time may be used in the shift Start Time and End Time fields. 4. In the Create Entry For section of the screen, select each day the shift rule is assigned to. 5. Enter the pay modification as an additional pay factor and/or an additional wage per hour. Additional Pay Factor: Allows for an additional percentage of pay. Additional Wage Per Hour: Allows for the addition of a dollar amount. If using both, the differential calculates as Hourly Wage + Pay Factor + Additional Wage. 6. Select Advanced Rules as necessary. Select the first checkbox if an employee must work a minimum number of minutes within the shift rule to receive the differential. Enter that amount of time in the field provided. Select the second checkbox if an employee must work between specific hours of the shift to receive the differential. Enter the times in the appropriate fields. When this option is selected, an additional rule displays allowing the employee to receive differential pay for another shift if he does not meet the requirements for this advanced rule. 7. Click Add Rule. (2) The shift code identifies the shift and differential rule. If you use shift differentials within Paychex Preview. Shift times cannot extend past midnight of any day. If a shift extends into the morning hours, end the first part of the shift at midnight by selecting the End at 12:00 a.m. of the following day checkbox, and then add another shift rule with the same shift code from 12:00 a.m. through the shift end time. If you need to edit a shift rule, you may only do so for one day at a time. Edit a shift differential rule by selecting the appropriate shift rule as named by the day of the week Paychex, Inc. All rights reserved. TLO

5 Assigning Employees To assign an employee to a shift differential policy: 1. In the Group Assignements section of the Shift Differentials page, click Assign Multiple Employees. 2. Select employees from the Non Members list, and click the upper blue arrow to add them to the Members list. Paychex Preview Export When including shift differentials on the Paychex Preview Export report, you must account for the employee pay rate, the shift differential hours, and the option to duplicate the differential hours as regular hours. On the Paychex Preview Export Report Criteria window under Export Options: Select the Export employee s pay rate (1) checkbox if Time and Labor Online is calculating the differential pay. If Preview is calculating the differential, leave this checkbox blank. Select the Export shift differential hours (2) checkbox if Time and Labor Online is to export shift hours worked. Without this, all hours will export as non-shift (regular) work hours, and all advanced rules used when creating the shift differential will be ignored. Pay rates are most often listed in the Preview payroll system and not in Time and Labor Online. If you enter pay rates in both Time and Labor Online and Preview, you need to ensure they match exactly. If they are different, the pay rate will override the Preview pay rate during export, leading to inaccurate payroll Paychex, Inc. All rights reserved. TLO

6 Additional Information If you need help managing your shift differentials, please contact the Time & Attendance Service Center at the number listed on the Time and Labor Online Training page Paychex, Inc. All rights reserved. TLO