Managing 24/7

Pay Differentials for the Weekend Shift


The principle of paying shift differentials has traditionally been used to attract workers to the often hard-to-fill “off shifts.” While evening and night shifts tend to get most of the attention in the shift differential conversation, it’s important to not overlook weekend differentials as well.

In this article, we take a closer look at common pay practices and reveal two common mistakes that many operations make when it comes to weekend shift differentials.

How Common are Weekend Shift Pay Differentials?
According to CIRCADIAN’s Shiftwork Practices 2014 Survey (click here for report) of 341 North American shiftwork operations, premiums for work on a Saturday are paid by approximately 21% of shiftwork operations, while about 28% pay Sunday premiums. It should be noted that some states legally require companies to pay a premium for either the seventh day of work or a Sunday (even if the employee has not yet reached the federal overtime limit of 40 hours per work week).

Of companies that pay a weekend differential, the average basic hourly wage is typically higher on Sundays than Saturdays.

Who Pays the Most?
Among operations paying a weekend shift differential there are two groups that pay the most:

Group 1 consists of companies that are not running a true seven-day schedule. Many 24/5 companies experience an occasional spike in demand and decide to meet it by asking workers to come in on weekends, often at time-and-a-half or even double-time pay. While such a practice may be acceptable a few times each year, doing so as a regular practice can be extremely costly to payroll.

For companies experiencing frequent spikes in demand that require employees to come in on weekends, there are steps you can take to better meet this challenge. First, it’s important to review both scheduling practices and staffing levels to ensure you are maximizing productivity on your 5-day schedule (see Circadian’s proportional staffing white paper for more information on staffing issues). However, if you are confident that you have maximized productivity on a 5-day schedule, it might be worth exploring either a full- or part-time expansion to a 6- or 7-day schedule.

Group 2 consists of companies that have recently switched to a 7-day operation.  The transition from a 5-day to a 7-day/24-hour operation is full of challenges and surprises. While some operations have the luxury of planning months ahead for the transition to 24/7, many companies find themselves forced to change suddenly and don’t have the time or experience to know how to make the switch as smoothly as possible. Not surprisingly then, many companies make mistakes and overlook certain issues, such as weekend differentials.

When it comes to the issue of payroll during the transition to 24/7, many management teams take the path of least resistance. Instead of taking the steps to properly evaluate how payroll should be structured, management simply maintains their five-day schedule pay rates and absorbs the costly weekend pay.

Why do they do this? For starters, by maintaining the status quo and making official the weekend work practices that have been in place, management may determine that they have made the transition with the least disruption. Secondly, many employees may welcome the consistent high weekend pay and are therefore more accepting of the transition to 24/7.

In the long run, this approach fails to make financial sense. Not only is it costly, but it most likely will create schedule patterns that lead to high overtime levels and high risk for fatigue-related accidents. However, often by the time management realizes the need to correct this mistake, they may have inadvertently created a culture in which employees depend on the high-weekend pay and resist any scheduling and pay changes

Despite the challenges these 24/7 operations may face, the issue of how to schedule and pay their workforce can still be addressed successfully, even in highly unionized environments where workers are used to the additional pay. By sitting down at the table and addressing both management operational requirements and employee needs, compromises can be reached that benefit both parties. If the situation proves to be too tenuous, the addition of a 3rd (neutral) party is often helpful.


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For over 30 years, CIRCADIAN has been helping shiftwork operations around the world.  Feel free to contact us by clicking here.

 

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