Did you know that businesses are supposed to follow regular payroll schedules? Businesses who don’t can get into big trouble so listen up if you’re new to this.
Employers can’t just pay their employees whenever they get paid from their clients and they can’t postpone payroll because they ran into a big expense. Nope. Employees must be paid in a timely manner, all the time. This means that a business should have some reserve for payroll because when the unexpected happens, employees still need to be paid.
If you think about it, you can see why it is so vital that employees are paid regularly and on time. Employees, just like anybody else, have bills and specific due dates for those bills. If they don’t get paid on time, they can’t pay their bills on time and that hurts their credit… bad. It is totally unfair to botch up an employee’s credit because your business is suffering and so that’s why there are laws against it.
On the flip side, if you don’t pay your employees on time, you can end up with a lawsuit that you probably won’t win. The DOL favors employees when businesses don’t follow wage and hour laws.
I talk a whole lot on this blog about making sure you don’t short your employees their due overtime. First, it’s not fair to employees and, second, wage and hour lawsuits are expensive!
This is all very important but the opposite concern also happens a lot: overpaying employees.
Now, online time tracking systems like ours are designed to prevent this in most cases but, if you’re not careful, you could end up overpaying employees anyway.
Here’s how it could happen:
The exact date at which employees need to receive their final paycheck upon termination is a mystery to many small business owners. The fact that there are laws surrounding the issue at all vexes many who are responsible for paying employees. And it’s not surprising. State laws are complicated and the Fed has no laws about it at all. In the words of the Department of Labor,
“Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, may require immediate payment.”
What exactly is meant by immediate payment, you ask? It depends on the state. Some states require payment be made immediately, some within 2 days, 1 day, or just on the next normal payday. Beyond that, the rules depend on whether the employee was fired or quit. Here is a list of each state’s last paycheck requirements for reference.
Companies have a few choices as to which payroll schedule to use. Knowing which is right for your company, though, takes a little thought. I’m going to go over the pros and cons of each.
The four most commonly used payroll schedules in the U.S. are weekly, biweekly (which means every two weeks), semi-monthly (which means twice a month), and monthly.
- Weekly (52 periods per year)
- Every Two Weeks (26 periods per year)
- Twice Monthly (24 periods per year)
- Monthly (12 periods per year)
Most states have set payday frequency requirements. It’s always fine to pay employees more often than required by the state but not less often.
So which one should you use? Here are the details of each. Continue reading
Employers usually pay their employees bi-weekly or monthly. Their schedule is not random, however, nor is it just a matter of convention. Employee paychecks must be delivered according to each state’s per-determined timeline.
Employers cannot lawfully decide to pay employees whenever they want. They cannot make up a rule which issues checks every two months, for example. Some states don’t even allow for once per month pay checks. It is a good idea to know your state’s payday requirements so that you don’t ruffle any feathers and end up in court.
Follow this link on the Department of Labor website for a table of state payday requirements. Every state has slightly different requirements.
Whenever a holiday rolls around employers start thinking about how and how much to pay their employees and whether it’s mandatory to pay them at all. Many companies offer 5 to 10 paid holidays per year. This custom has left many employers unclear on whether paying employees for holidays is actually a requirement.
ADP is probably the most popular payroll outsourcing option available right now. Other popular payroll services in addition to ADP include QuickBooks and Paychex.
Timesheets.com integrates with them all!
Whichever payroll company you use, we can design a file (free of charge) that can be used by your payroll processor. Whether it’s uploaded on the payroll processor’s web interface, or emailed to the person crunching the numbers, no matter if it’s a large payroll corporation or single handed operation, we make sure your payroll numbers are in the right format.
The best part is, Timesheets.com was designed as a user-friendly time tracking service. From the start, it was meant to be an intuitive service that you and your employees interact with each day. We aren’t an ad-hoc time tracking service like most of the time tracking add-ons available through payroll providers. Ours is a feature-rich platform, designed to make it easy for you to fill your employee management needs.
If you’ve been looking for an inexpensive service that seamlessly integrates with payroll, we can help!