Local Minimum Wage Rates Can Affect Split Shift Calculations

Some employers, particularly in the restaurant industry, schedule their employees to work a “split shift,” i.e., two distinct work periods in the same workday separated by more than a one-hour meal break. For example: a waiter who works the 10:00 a.m. to 1:00 p.m. breakfast/lunch shift and returns for the 4:00 p.m. to 7:00 p.m. dinner shift is on a “split shift” schedule.

California law requires all employers to pay employees who work split shifts a premium of one-hour additional pay at minimum wage for that day. However, if an employee’s set hourly rate is higher than minimum wage, the employer may use all amounts above minimum wage to offset the split shift premium.

Also, if the employee voluntarily requests the split shift for his or her own convenience or to pick up an extra shift, then no extra pay is required.

Traditionally, the split shift premium was based on California statewide minimum wage. However, California Division of Labor Standards Enforcement (DLSE) recently updated its frequently-asked-questions to indicate the split shift standard is one hour at the state minimum wage or applicable local minimum wage, whichever is greater.

Employers in a city or county with a local minimum wage rate should proceed with particular care in reviewing their split shift pay calculations and protocols.

For example:

A Los Angeles city restaurant employs 25 or fewer employees. That company must pay at least the city’s current $12 minimum wage rate (effective July 1, 2018). In this example, the business chose to pay its waiters $13 per hour.

For a waiter’s six-hour split workday (say, serving breakfast in the morning, returning late afternoon to serve dinner), the restaurant must pay an additional $6 split shift premium.

Step 1. Calculate the required local minimum wage and split shift premium for the workday:

• Six hours at $12/hour local minimum wage = $72
• Split shift premium: $12 (one hour at local minimum wage)
• Total = $84

Step 2. Calculate the actual total hourly pay (including split shift premium):

• Six hours at $13/hour = $78

Note: As waiter’s tips may not be credited towards minimum wage, they would have no effect on such calculations. (See Labor Code section 351).

Step 3. Pay the difference:

• $84 (total on step 1) minus $78 (total on step 2) = $6 (differential amount for working a split shift)

Do not include split shift premium pay in overtime calculations.

Best practices:

• Keep time records of any split shift intervals, which must be itemized separately on the employee’s pay stub.
• Do not schedule unpaid meal breaks that exceed one hour in an attempt to avoid split shift obligations.
• Document all voluntary split shift requests.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

December 12, 2018