Shift Work Labor Laws: Rules and Requirements for Staying Compliant

Shift work laws are radically different for hourly teams than they are for full-time, 9 to 5 employees. Whether you run a restaurant, a retail store, or any other team of part-time employees, staying compliant keeps your business safe and your team happy.

Shift work laws: what you need to know

Managing hourly teams means understanding shift work laws that govern scheduling, pay, and compliance outside traditional 9-to-5 hours. For your restaurant, retail store, or small business, staying compliant isn't just about avoiding penalties—it's about building a foundation of trust with your team.

The Fair Labor Standards Act (FLSA) regulates four essential areas for your shift workers:

• Minimum wage requirements that vary by worker type—like paying servers $2.13 federal minimum for tipped employees versus $7.25 for non-tipped staff
• Overtime calculations that require time-and-a-half pay (like $10.88/hour for a $7.25 worker) for any hours beyond 40 per week
• Tracking compensable hours including often-overlooked time like a server waiting for a late delivery or a retail employee attending mandatory training
• Comprehensive record-keeping of all work details, from schedule start times to total hours worked each week to overtime calculations

Many states now enforce predictive scheduling laws requiring you to post schedules 7-14 days in advance, with extra "predictability pay" for last-minute changes.

Non-compliance can trigger Department of Labor investigations with penalties up to $10,000 and contribute to costly employee turnover. While federal law doesn't cap shift lengths or mandate rest periods, some states require minimum breaks between shifts to prevent "clopening" schedules that exhaust your team and hurt productivity.

What is shift work?

Shift work is any job that happens outside the traditional 9 to 5 window or covers just part of it. Your business likely uses shift work if you schedule team members for:

• Evening shifts (after 5pm)
• Early morning shifts (before 9am)
• Split shifts (working separate periods in one day)
• Rotating shifts (alternating between different times)
• Weekend shifts
• Part-time schedules

If you run a cafe, restaurant, or retail store, you're probably managing shift workers.

Unlike 9-to-5 jobs where everyone works the same hours, shift work involves rotating employees through different time blocks to cover your extended operating hours. This approach helps prevent burnout and manages overtime costs effectively.

Your hourly shift workers are entitled to overtime pay when they exceed 40 hours in a workweek (unlike 9-5 workers), which can be appealing for team members looking to increase their earnings.

Shift work offers several advantages—flexible schedules, potential shift premiums, and less traffic during commutes. However, these types of shift schedules can disrupt sleep patterns and social lives.

No matter how you schedule your team, understanding shift work laws is essential for keeping your business compliant and your team happy.

And, btw—we built Homebase to help make scheduling shifts way easier, with templated schedules, shift swap management, and team communication. End the scheduling chaos!

Why shift work compliance is crucial for employers

When you're running a busy restaurant or store, labor law non-compliance can slide in at any moment. Skipped breaks, extended shifts, and understaffing creep in when you're focused on keeping the business running. But following shift work laws isn't just about avoiding penalties—it directly impacts your team's happiness and your business's success.

Your team members need to know they're protected and valued while working for you. That's why labor laws exist in the first place.

If you're not compliant with shift work regulations, here's what could happen:

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

If your employees notice missing overtime pay or other violations, they can file a complaint with the Department of Labor's Wage and Hour Division, triggering an investigation that involves:

• 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) are severe. From their site, they say: "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.”

It’s 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?

High turnover directly impacts your bottom line. When you don't follow basic labor laws, good employees will look for opportunities elsewhere.

Think about it—your team won't stick around if they're not getting proper breaks, overtime pay, or reasonable scheduling. The costs of constantly recruiting and training new staff far outweigh the short-term benefits of cutting corners on labor laws.

Shift work labor laws and the Fair Labor Standards Act (FLSA): What employers need to know

Before diving into specific shift work regulations, remember that labor laws vary by state. While we're covering the federal standards here, always check your state's specific regulations to ensure complete compliance.

You can check out labor laws by state right here!

What is the Fair Labor Standards Act (FLSA)?

The Fair Labor Standards Act establishes four key elements of labor laws:

• Minimum wage
• Overtime
• Hours worked
• Record keeping.

The Department of Labor's Wage and Hour Division enforces these regulations through investigations when violations are reported.

Let's break down what you need to know about each:

1. Minimum wage labor laws

Minimum wage is legally the absolute minimum you can pay an employee per hour.

It's not super simple, though. For example, there are federal minimums and state minimums, and 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.  

1. You need to pay whichever is higher: federal minimum ($7.25) or your state's minimum
2. For your tipped team members (like servers), the federal minimum is just $2.13, but with tips, they must reach at least $7.25/hour
3. Some special cases like student-learners might qualify for lower rates with the right paperwork —this is called Subminimum Wage Provisions
4. Different rules apply to different types of workers, so double-check which category your team falls into

Why is it important to know this labor law? Underpayment of wages is an offense from the FLSA, so knowing what the minimum wage requirement is imperative if you don’t want to be investigated.

If pay compliance is feeling like a nightmare, a smart payroll system like the payroll tool from Homebase can help you automatically stay on top of meeting all minimum standards.

2. Overtime labor laws

The good news: the sky's the limit when it comes to the number of hours you can schedule for your employees.

The compliant news: any shift worker who hits more than 40 hours in a work week needs to be paid overtime. (But psst: it works differently for exempt/salaried employees!)

Here's what you need to know:

• The magic formula: regular hourly rate × 1.5 × hours over 40
• Some employees are exempt from overtime (certain salaried positions making at least $684/week, executives, professionals, and other specific job categories)
• Your state may have additional overtime rules (like daily overtime after 8 hours in some states)
• Averaging hours across multiple weeks isn't permitted under federal law
• Overtime applies regardless of whether the extra hours were approved in advance

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. In one case, you're in trouble with the law, and in the other, your bottom line gets impacted.

If you need help making sure you’ve dotted all of your ‘i’s and crossed all of your ‘t’s, use the Homebase employee scheduling app.You'll get flagged 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 swap shifts.

3. Hours worked labor laws

The FLSA doesn’t regulate how many hours your employees work in a day, 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: When your team is "engaged to wait" (like your barista waiting for a delivery), that's paid time
• 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—these are hours worked.
• Rest and meal periods: Those short 15-minute breaks? Definitely paid. Lunch breaks (30+ minutes)? Typically not, unless they're on the job while eating.
• Training programs: Mandatory training hours counts as work time, but that mixology class your bartender chose to take for fun doesn't.

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. Record-keeping labor laws

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.

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

Want to be extra thorough? Keeping track of shift notes is a great way to know what happened when on your team.

Why is this labor law important? Good record keeping is like insurance—it might seem tedious, but you'll be grateful for it if questions (or, worse, accusations) arise. Plus, these records help you track labor costs and spot scheduling patterns that could be costing you.

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

What the FLSA 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, hospital staff, and other hourly workers were struggling with the unpredictability of their schedules. Having workers on-call  is great for employers, butit makes it really tough for employees to have work/life balance.

These laws help your hourly workers better predict their income and manage their personal commitments.

Here's what you need to know:

You must give prior notice of schedules

• You need to post work schedules 7-14 days ahead of time
• No more keeping your team on-call for "maybe" shifts
• Your team can now arrange childcare, school, or second jobs around their work hours

When your team knows their schedule in advance, they're happier and more likely to stick around. That means less turnover and training costs for you.

Miss the deadline? You could be on the hook for "predictability pay" penalties, which hits your bottom line.

Account for employee schedule preferences

• Your team submits their availability before you create the schedule
• When hiring someone new, you have to give them a realistic picture of their hours
• You should try to work with reasonable scheduling requests when possible

Honoring your team's availability creates loyalty and reduces no-shows. Who doesn't want that?

Ignore your team's scheduling needs, and watch them walk out the door to competitors who will listen.

Regulate limits on additional hours

• Got extra shifts? Offer them to your current team first
• Only after they pass can you bring in new people
• Some places require you to offer hours based on seniority

This approach helps your team get the hours they want while ensuring you're fully staffed. Win-win!

Skip this step and you might face penalties, not to mention creating tension among your team members.

Promptly notify your team re: schedule changes

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”. The amount varies, but it adds up quickly.

Need to change your schedule after it’s already posted? When you use Homebase scheduling you can instantly notify your team when you swapping around shifts.

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. Most laws require 8-12 hours of rest between shifts, giving teams adequate rest. The exception is if an employee agrees to work during that rest period.

Well-rested team members make fewer mistakes and provide better service to your customers.

Ignore rest periods and you'll not only face penalties but also deal with exhausted, error-prone team members.

Maintain proper records

• Keep copies of all your schedules
• Most places want you to hang onto them for 2-3 years
• Document all schedule changes and any premium payments

Good records protect your business if questions come up later about scheduling or pay.

No records? Good luck defending yourself against complaints or investigations.

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.

That said, 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.

Our scheduling tool automatically flags potential overtime issues, maintains detailed records, and sends instant notifications about shift changes—addressing key compliance requirements while simplifying your workload.

Meanwhile, our payroll system handles proper wage calculations, ensuring your team gets paid correctly every time.

"Schedule communication works flawlessly with Homebase. We publish the schedule and employees get the information on their phone. We very rarely have an employee tell us they didn't know they were supposed to work."

Focus on growing your business and supporting your team, not worrying about labor law violations.

Plus, you can 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.

What is labor law in simple terms?

Labor laws are the rules that protect your team members and set standards for how your business operates. They cover basics like minimum wage, overtime pay, workplace safety, and fair treatment. Think of them as the rulebook that ensures everyone—both employers and employees—is treated fairly in the workplace.

What are three of the rights you have as a worker?

Workers have several important rights, including the right to receive at least minimum wage and overtime pay when applicable, the right to a safe workplace free from recognized hazards, and the right to be free from discrimination based on protected characteristics like race, gender, age, or disability. They also have rights to reasonable breaks, family and medical leave, and to form or join a union.

Which is an example of a labor law?

The Fair Labor Standards Act (FLSA) is one of the most fundamental labor laws affecting your business. It establishes minimum wage, overtime pay, record-keeping requirements, and youth employment standards. Another example is the Occupational Safety and Health Act (OSHA), which ensures safe working conditions for all employees.

What are the violations of the labor law in California?

California has some of the strictest labor laws in the country. Common violations include failing to provide meal and rest breaks (which require premium pay if missed), improper overtime calculations (California requires daily overtime after 8 hours), misclassification of employees as independent contractors, violations of predictive scheduling requirements, and not providing paid sick leave. California also has specific requirements for final paychecks and wage statements that differ from federal standards.

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