Split Shift Premium
The additional one hour of pay at minimum wage required when California employees work a split shift schedule.
What Is Split Shift Premium?
Split shift premium is the additional compensation California employers must pay to non-exempt employees who work a split shift—a work schedule divided into two or more segments with an extended unpaid break between them. Under California law, the premium equals one hour of pay at the applicable minimum wage rate.
The premium exists to compensate workers for the additional burden and expense of split schedules, such as extra commuting costs, the inability to use break time productively, and the general inconvenience of a fragmented workday.
Legal Basis for Split Shift Premium
California Industrial Welfare Commission Wage Orders
The split shift premium requirement comes from California's IWC Wage Orders, which govern wages, hours, and working conditions for various industries. All 17 Wage Orders contain similar language requiring the premium.
Standard Wage Order language:
"When an employee works a split shift, one hour's pay at the minimum wage shall be paid in addition to the minimum wage for that workday."
Which Employees Are Covered
The split shift premium applies to:
| Covered | Not Covered |
|---|---|
| Non-exempt hourly workers | Exempt salaried employees |
| Most commissioned employees | Outside salespersons |
| Part-time workers | Independent contractors |
| Temporary employees | Certain professional exemptions |
| Employees in all covered industries | Executive exemptions |
How to Calculate Split Shift Premium
Basic Calculation Rule
The split shift premium is calculated as follows:
- Determine applicable minimum wage for work location
- Calculate minimum wage x hours worked for the day
- Add one hour at minimum wage for the premium
- Compare to actual daily pay
- Pay difference if actual pay falls short
Step-by-Step Calculation Process
Step 1: Identify the workday as a split shift
- Two or more work segments
- Extended unpaid break between segments
- Break exceeds normal meal period (typically 1+ hours)
Step 2: Determine applicable minimum wage
- California state: $16.00/hour (2024)
- Or applicable local minimum wage if higher
Step 3: Calculate minimum earnings threshold
Minimum threshold = (Minimum wage x hours worked) + (Minimum wage x 1 hour)
Step 4: Calculate actual daily earnings
- Include hourly wages
- Include any tips received
- Include commissions earned
- Include other compensation
Step 5: Compare and pay difference
If actual earnings < minimum threshold:
Premium owed = minimum threshold - actual earnings
If actual earnings >= minimum threshold:
Premium owed = $0
Detailed Calculation Examples
Example 1: Minimum Wage Worker, Full Day
Employee works split shift in California (state minimum wage area):
- Hourly rate: $16.00
- Hours worked: 8 hours (4 morning, 4 evening)
- 3-hour unpaid break between segments
Calculation:
| Component | Amount |
|---|---|
| Hours worked | 8 |
| Hourly rate | $16.00 |
| Regular pay | $128.00 |
| Minimum wage x hours | $128.00 |
| Split shift premium (1 hour) | $16.00 |
| Minimum threshold | $144.00 |
| Actual pay | $128.00 |
| Premium owed | $16.00 |
| Total daily pay | $144.00 |
Example 2: Higher Paid Worker, Full Day
Employee works split shift in San Francisco:
- Hourly rate: $22.00
- Hours worked: 8 hours (4 morning, 4 evening)
- San Francisco minimum wage: $18.67
Calculation:
| Component | Amount |
|---|---|
| Hours worked | 8 |
| Hourly rate | $22.00 |
| Regular pay | $176.00 |
| Minimum wage x hours | $149.36 |
| Split shift premium (1 hour) | $18.67 |
| Minimum threshold | $168.03 |
| Actual pay | $176.00 |
| Premium owed | $0 |
| Total daily pay | $176.00 |
(Actual pay exceeds threshold, so no additional premium required)
Example 3: Tipped Worker
Restaurant server works split shift in Los Angeles:
- Hourly rate: $16.78 (LA minimum)
- Hours worked: 6 hours (lunch and dinner shifts)
- Tips received: $85.00
Calculation:
| Component | Amount |
|---|---|
| Hours worked | 6 |
| Hourly rate | $16.78 |
| Hourly pay | $100.68 |
| Tips received | $85.00 |
| Total actual pay | $185.68 |
| Minimum wage x hours | $100.68 |
| Split shift premium (1 hour) | $16.78 |
| Minimum threshold | $117.46 |
| Premium owed | $0 |
| Total daily pay | $185.68 |
(Tips push total well above threshold)
Example 4: Part-Time Split Shift
Employee works short split shift:
- Hourly rate: $16.25
- Hours worked: 3 hours (2 morning, 1 evening)
- State minimum wage: $16.00
Calculation:
| Component | Amount |
|---|---|
| Hours worked | 3 |
| Hourly rate | $16.25 |
| Regular pay | $48.75 |
| Minimum wage x hours | $48.00 |
| Split shift premium (1 hour) | $16.00 |
| Minimum threshold | $64.00 |
| Actual pay | $48.75 |
| Shortfall | $15.25 |
| Premium owed | $15.25 |
| Total daily pay | $64.00 |
Local Minimum Wage Impact
Using the Correct Minimum Wage
California has numerous local jurisdictions with minimum wages higher than the state rate. The split shift premium must be calculated using the applicable minimum wage for the work location.
2024 Local Minimum Wage Reference
| City/County | Minimum Wage | Split Shift Premium |
|---|---|---|
| California (state) | $16.00 | $16.00 |
| San Francisco | $18.67 | $18.67 |
| Berkeley | $18.67 | $18.67 |
| Emeryville | $18.67 | $18.67 |
| San Jose | $17.55 | $17.55 |
| Los Angeles | $16.78 | $16.78 |
| Los Angeles County | $16.78 | $16.78 |
| Oakland | $16.50 | $16.50 |
| Fremont | $17.30 | $17.30 |
| Milpitas | $17.70 | $17.70 |
| Santa Monica | $16.90 | $16.90 |
| Pasadena | $17.50 | $17.50 |
Note: Always verify current rates as minimum wages increase annually.
Multi-Location Workdays
If an employee works at different locations during a split shift:
Same jurisdiction: Use that jurisdiction's minimum wage
Different jurisdictions: Options include:
- Use the higher minimum wage
- Use weighted average based on hours
- Use the rate for the location with most hours
Document your methodology and apply it consistently.
What Counts as Compensation
Included in Daily Pay Calculation
| Compensation Type | Included? | Notes |
|---|---|---|
| Hourly wages | Yes | Base calculation |
| Tips (direct) | Yes | All tips received |
| Tips (pooled) | Yes | Employee's share |
| Commission | Yes | Daily commission earned |
| Bonus (daily) | Yes | If earned that day |
| Piece rate pay | Yes | Daily earnings |
| Shift differential | Yes | Additional shift pay |
Not Included in Daily Pay Calculation
| Compensation Type | Included? | Notes |
|---|---|---|
| Overtime premium | No | Only for minimum threshold |
| Weekly/monthly bonuses | No | Not daily compensation |
| Expense reimbursements | No | Not wages |
| Fringe benefits | No | Not wages |
| Vacation/PTO pay | No | Not for hours worked |
Split Shift Premium and Overtime
Premium Excluded from Overtime Calculation
The split shift premium is designed to ensure minimum wage compliance, not to increase the regular rate of pay for overtime purposes.
Treatment for overtime:
- Split shift premium is not included in regular rate
- Overtime calculated on base hourly rate only
- Premium is additional flat amount per split shift day
Split Shift Days with Overtime
When a split shift day exceeds 8 hours:
Example:
- Split shift hours: 10 hours (5 morning, 5 evening)
- Hourly rate: $16.00 (minimum wage)
- Regular hours: 8 at $16.00 = $128.00
- Overtime hours: 2 at $24.00 = $48.00
- Subtotal: $176.00
- Split shift premium calculation:
- Minimum threshold: (10 x $16.00) + $16.00 = $176.00
- Actual pay (excluding OT premium): $160.00
- Premium owed: $16.00
- Total daily pay: $192.00
Payroll and Recordkeeping
Pay Stub Requirements
California wage statements should clearly show:
- Split shift premium as separate line item
- Date(s) the premium was earned
- Calculation basis (minimum wage used)
- Total compensation for pay period
Record Retention
Maintain records for at least 3 years:
| Document | Purpose |
|---|---|
| Time records | Prove split shift worked |
| Schedule records | Show shift structure |
| Pay calculations | Document premium computation |
| Applicable minimum wage | Justify rate used |
| Pay stubs | Prove payment made |
Documentation Best Practices
- Flag split shifts in scheduling system
- Calculate premium contemporaneously with payroll
- Show calculation in payroll records
- Itemize on pay stub separately
- Retain all records for audit defense
Common Compliance Errors
Employer Mistakes
| Error | Correct Approach |
|---|---|
| Not paying any premium | Calculate and pay if threshold not met |
| Using state minimum wage in local minimum wage area | Use higher local rate |
| Excluding tips from calculation | Include all tips received |
| Treating premium as discretionary | Premium is legally required |
| Not identifying split shifts | Track schedules to identify |
| Paying flat premium regardless of pay rate | Calculate based on threshold |
Calculation Errors
| Error | Impact |
|---|---|
| Wrong minimum wage rate | Under or overpayment |
| Miscounting hours | Incorrect threshold |
| Missing days | Unpaid premiums |
| Wrong pay period | Compliance violations |
Industry-Specific Considerations
Restaurant Industry
Unique factors:
- High tip income often eliminates premium obligation
- Daily tip variance affects daily calculation
- Track tips by shift segment
- Tip pooling allocations must be accurate
Best practice: Calculate daily even if tips usually exceed threshold
Retail Industry
Unique factors:
- Commissions may affect calculation
- Store location determines minimum wage
- Predictive scheduling in some cities
- Multiple store work complicates location determination
Best practice: Use store-specific minimum wage consistently
Healthcare Industry
Unique factors:
- Shift differentials common
- Split shifts less common but occur
- Union contracts may exceed requirements
- Higher base wages often eliminate premium
Best practice: Include shift differentials in calculation
Hospitality Industry
Unique factors:
- Multiple job codes per employee
- Tips, service charges common
- Seasonal split shift patterns
- Multiple property work possible
Best practice: Calculate by workday, not by job code
Enforcement and Penalties
Labor Commissioner Claims
Employees can file claims for unpaid split shift premiums with the California Division of Labor Standards Enforcement (DLSE).
What employees can recover:
- Unpaid premiums with interest
- Waiting time penalties (up to 30 days pay)
- Liquidated damages (double unpaid wages in some cases)
- Attorney's fees if through private lawsuit
Private Lawsuits
Employees may sue directly for:
| Recovery | Amount |
|---|---|
| Unpaid premiums | Full amount owed |
| Interest | 10% per year |
| Liquidated damages | Up to equal amount again |
| Attorney's fees | Actual fees if prevailing |
| Costs | Court and litigation costs |
Statute of Limitations
| Claim Type | Time Limit |
|---|---|
| Wage claim (oral agreement) | 2 years |
| Wage claim (written agreement) | 4 years |
| PAGA penalty claims | 1 year |
Employer Best Practices
Proactive Compliance
- Identify all split shifts in your scheduling
- Map work locations to applicable minimum wages
- Configure payroll systems to calculate automatically
- Train managers on split shift identification
- Audit regularly for compliance
Scheduling Strategies
To avoid split shifts:
- Use separate morning and evening crews
- Offer full-time continuous schedules
- Allow employee choice between shift types
- Build schedules that avoid extended breaks
When split shifts are necessary:
- Pay above minimum wage to exceed threshold
- Be transparent with employees about premium
- Track and pay premiums promptly
- Document all calculations
Payroll System Requirements
Ensure your payroll system can:
- Flag days as split shifts
- Pull correct local minimum wage
- Calculate threshold automatically
- Determine premium amount owed
- Display premium on pay stubs
- Retain calculation records
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