Shift work laws: the rules, regulations, and requirements to stay compliant

Shift work laws are radically different than managing and scheduling full-time, 9 to 5 employees. Whether you run a restaurant, a retail store, or any establishment with part-time employees, chances are that you’re dealing with shift work.

Shift work laws are a whole other ball game compared to salaried staff, and have different legal requirements for employers. In this post we’ll give you the rundown on the shift work laws every employer should know.

What is shift work and how is it different from working a 9 to 5 job?

Shift work is defined as any work that extends past the 8 daylight hours of 9 am to 5 pm. Whereas a traditional 9 to 5 job is exactly what it sounds like—doors open at 9 am and close at 5 pm.

It’s simple—if your company is open outside of 9 to 5 hours, you’ve got shift workers!

In a 9 to 5, everyone is expected to be at work at the exact same time. Because of the longer operating hours of certain companies, shift workers rotate through different shifts so that someone is always around during open hours. Rotating shift work can be a huge benefit for companies who want to avoid overtime and burnout for their employees.

That being said, shift workers are entitled to overtime if they go over 40 hours in a work week, while salaried 9 to 5 employees are not. That can be a big draw for employees who want the opportunity to earn more money. Shift work has some pretty great perks like flexible scheduling, possible shift premiums, and you can’t beat the sweet perk of less traffic since you’re traveling outside of rush hour. However, shift work doesn’t come without downsides, like being tough on the sleep schedule and social calendar.

There are lots of ways to schedule shift workers, but no matter which one you choose, there are shift work laws every employer should know. Let’s dive in!

The importance of shift work laws for employers

If you run a company in an industry where demands are high and the work never ends, it can become easy to let labor laws slip. Skipping breaks, longer shifts, and not enough staff for coverage can creep in. But sticking to labor laws isn’t only the law, staying compliant with government regulations and maintaining staff breaks improves overall employee happiness. Trust us when we say your employees notice.

Your staff needs to know that they’re safe and being taken care of at your establishment. That’s why labor forces fought so hard for regulated labor laws.

If you’re noncompliant with shift work labor laws, whether intentionally or otherwise, two things could happen:

1. You get reported to the Department of Labor’s Wage and Hour Division

Let’s say your timesheets are off and employees are missing overtime on their paychecks. They can file a complaint with the Department of Labor’s Wage and Hour Division who can start an investigation.

An investigation means:

• Meeting with a Wage and Hour representative to learn the steps of what’s about to happen.
• Doing a deep dive into the financial records of the company.
• Examining all payroll records for your employees and any other notes.
• Interviewing some of your employees to corroborate your payroll records and confirm their assigned duties.
• A follow-up from the government to break down all of the findings, determine whether you broke the law, and if so, what the penalty is.

Penalties for violating the Fair Labor Standards Act (FLSA): ”Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to a civil money penalty of up to $1,000 for each such violation. Willful violations of the FLSA may result in criminal prosecution and the violator fined up to $10,000. A second conviction may result in imprisonment.”

Needless to say, it’s a pretty big deal, and not something you want hanging over your head.

2. You lose good employees

Did you know that it costs the average United States employer $4,000 and 24 days to hire a new worker? Employee retention should be on the mind of every employer that not only wants to maintain employee morale, but also keep more money in the company. If a company isn’t obeying the basic laws set out by the Fair Labor Standards Act, they’re going to find themselves spending a lot of time and financial resources training new employees. Afterall, your team isn’t going to stick around if you aren’t paying them properly.

We really can’t emphasize enough that following the labor laws of your state is the bare minimum any employer can do. We want to help you out, so let’s learn more about the actual ins and outs of the labor laws.

Shift work labor laws employers need to know

Before we tackle the shift work labor laws employers need to know, you should note that every state is different and the laws can vary in small ways. Make sure you fact check our information for your specific state to be safe.

What is the Fair Labor Standards Act (FLSA)?

The Fair Labor Standards Act is in charge of establishing 4 key elements of labor laws—minimum wage, overtime, hours worked, and record keeping. They establish the parameters of these laws and then the Department of Labor’s Wage and Hour Division is in charge of investigations for infractions.

So let’s break it down—because it’s important to know specifics about these 4 elements so you aren’t inadvertently breaking labor laws.

1. Labor laws for minimum wage

Minimum wage is legally the absolute minimum you can pay an employee per hour. There are some intricacies in this pretty basic definition though. For example, there are federal minimums and state minimums, and there are 3 different employee categories. Since every state has a different minimum wage—you can find your state here—we’ll talk at the federal level to make it easier.  

As you compare your state vs. the federal minimum wage, know that you need to pay your employees whichever is higher, the state minimum wage or the Federal minimum wage.

• Federal minimum wage for most employees is $7.25
• Federal minimum wage for tipped employees (such as restaurant workers) is $2.13
• Federal minimum wage for student-learners, full-time students in retail or serving, as well as agriculture or in higher-education, and with a physical or mental disability that reduces their productivity can be lower with the correct applications and certifications. This is called Subminimum Wage Provisions

Why is it important to know this labor law? Underpayment of wages is considered an offense from the FLSA, so knowing what the minimum wage requirement is imperative if you don’t want to be investigated. If you’re finding yourself struggling with compliance, work with a smart payroll system, like the payroll tool from Homebase, which can help you stay on top of meeting all minimum standards.

2. Labor laws for overtime hours for shift workers

There are no limits to how many hours a week you can schedule your employees but other than a few exceptions for exempt employees, any shift worker who hits more than 40 hours in a work week needs to be paid overtime.

The formula to calculate overtime is pretty easy.

Hourly wage x 1.5 x Hours worked above 40 hours = Overtime pay

Let’s look at a quick example.

Your employee makes $7.25 per hour and worked 45 hours in a week. In this example, your employee’s overtime pay would be $54.38 in addition to their regular pay for their 40 hours.

$7.25 x 1.5 x 5 overtime hours = $54.38

You can take a look at your particular State’s laws, but overtime hours and rate of pay for overtime are regulated at a federal level for all hourly workers.

Why is this labor law important? You don’t want to accidentally go over hours and either under pay your employees or go over budget. If you need help making sure you’ve dotted all of your ‘i’s and crossed all of your ‘t’s, use the employee scheduling app from Homebase. The scheduling tool flags if a shift is going to push an employee into overtime so that you can reschedule them or approve the overage—something especially useful when employees want to switch shifts.

3. Labor laws for hours worked

The FLSA doesn’t regulate how many hours your employees work in a day or week or month. What it does regulate is what constitutes hours worked or compensable time.

Hours worked is defined as, “all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace”.

The FLSA says: “Workday”, in general, means the period between the time on any particular day when such employee commences his/her “principal activity” and the time on that day at which he/she ceases such principal activity or activities. The workday may therefore be longer than the employee’s scheduled shift, hours, tour of duty, or production line time.”

What hours worked means to the FLSA

• Waiting time: If an employee is “engaged to wait”, this constitutes hours worked. An example would include a morning shift employee who’s stuck waiting for a delivery before they can clock out: technically, that’s time you’re paying for.
• On-call time: If an employee has constraints on their freedom while on call—like a server who needs to wait by the phone at home to see if they’ll be called in for a busy shift—or is on the premises while being on call, these are hours worked.
• Rest and meal periods: Short breaks of 15 to 20 minutes are considered hours worked, whereas 30+ minute meal breaks aren’t. The only exception is if the staff is expected to work while they eat, like if a server is expected to polish silverware or make roll-ups during their lunch. In that case, those are hours worked.
• Training programs: Employees need to have their training hours counted if it’s mandatory, job related, and during normal business hours. For example, if servers are being trained on the new menu, those hours count. If a bartender chooses to upgrade their skills and take a mixology class, those hours don’t count as they’re not being mandated by their employer.

Why is this labor law important? This one is easy to let slip. Maybe employees are answering the phone while eating lunch, or waiting to start their shift while a manager is busy. Either way, these count as hours worked and your employees need to be compensated.

4. Labor laws for record keeping

Make sure to get your record keeping in check. The FLSA requires that employers keep clear records on wages earned, hours worked, and other basic information.  This is pretty standard under other laws and regulations, so you may already have this in place. Let’s make sure!

Here’s what you need to keep records of:

• Your employee’s name, address, occupation, sex, and birth date if under 19 years of age
• The day and hour when your workweek begins
• The total hours worked for each workday and workweek
• The total straight-time earnings for the day and the week
• The regular hourly pay rate for any week overtime is worked
• The total overtime pay for the workweek
• Deductions from wages
• Additions to wages
• The total wages paid each pay period
• The date of payment and pay period covered

Why is this labor law important? This FLSA requirement is a huge benefit to employers. If anyone ever files a complaint about their place of employment, having impeccable records will help with the investigation process.

Homebase helps you with complicated compliance tasks. Organize your team roster and information all in one place. Give it a try!

While the FLSA does regulate these 4 key elements of labor laws, it’s important to know what it doesn’t regulate. Here’s a quick list of things the FLSA doesn’t regulate.

• Vacation, holiday, severance, or sick pay
• Number of hours worked in a day or days worked in a week
• Pay raises or fringe benefits
• Meal or rest periods, holidays off, or vacations
• Premium pay for weekend or holiday work
• A discharge notice, the reason for discharge, or immediate payment of final wages to terminated employees

These are all things that you as an employer can decide within your own state’s guidelines, and something employees agree to when hired.

What is predictive scheduling?

Predictive scheduling is pretty simple: employers provide employees with a schedule for their shifts in advance.

Predictive scheduling was established because shift workers like servers, bartenders, retail workers, and hospital staff who were working on-call schedules were struggling with the unpredictability of their schedules. Even though having workers on-call for times when business might be busy is great for employers, it makes it really tough for employees to have work/life balance.

Predictive scheduling helps part-time workers, shift workers, and hourly workers have a better idea of what their pay will be on a weekly and monthly basis—something that’s much needed in today’s difficult economy.

Let’s take a look at the rules of predictive scheduling.

Give prior notice of schedules

Instead of having a team of employees on-call for every shift, employers need to post the schedule 7-14 days in advance of the first shift scheduled.

Get employee schedule preferences

Employees can submit their shift preferences and request time off before the schedule goes out for the upcoming week. Employers also need to give an estimate of an employee’s schedule when they’re hired so they have an idea of what to expect when onboarding.

Regulate limits on additional hours

If there are shifts available, the current employees need to be notified first before management can hire new employees to fill those shifts.

Give prompt schedule change notification

If you change an employee’s schedule after it’s posted, you’ll need to offer extra pay to the employee. This is called “predictability pay”.

Need to change your schedule after it’s already posted? Get Homebase scheduling and instantly notify your team when you post or edit their schedules. .

Have mandatory rest periods

“Clopens”—when an employee closes one shift and then opens the very next shift—may be a thing of the past with predictive scheduling. Employers have to give adequate rest periods to their staff in between shifts. The exception is if an employee agrees to work during that rest period.

Maintain proper record keeping

Employers need to keep records of their posted schedules for a length of time in case there are any questions about scheduling and payroll discrepancies.

Which states have predictive scheduling and shift work laws

Want to know if predictive scheduling is mandatory for you?  Here’s a current list of states and cities that have predictive scheduling laws and a list of those that are well on their way. It’s important to note that  this list is always changing, so always confirm with your own state laws or check in with Homebase’s HR compliance team.

List of states and cities that have predictive scheduling laws

• Oregon state
• Chicago, Illinois
• Emeryville, California
• New York, New York
• Philadelphia, Pennsylvania
• San Francisco, California
• Seattle, Washington

List of states and cities that are in the process of instituting predictive scheduling laws

• Boston, Massachusetts
• Los Angeles, California
• Minneapolis, Minnesota
• Washington, District of Columbia
• California
• Connecticut
• Hawaii
• Illinois
• Massachusetts
• Michigan
• New Jersey
• North Carolina
• West Virginia
• Bellingham, Washington

Need an easier way to stay compliant with shift work labor laws?

Homebase can help you keep on top of changing local, state, and federal labor laws. Get started for free.

Shift work laws FAQS

What is shift work?

Shift work is any schedule that takes place outside of the 9 to 5 hours. It involves employees rotating through different shifts doing the same job.

What is the Fair Labour Standards Act (FLSA)?

According to the FLSA website, “The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.”

What is predictive scheduling?

Predictive scheduling is the requirement of businesses to post a schedule 7-14 days in advance of the first shift worked. Predictive scheduling is mandatory in some states and cities. It mostly affects industries such as the restaurant industry, retail, and hospitality.