The discipline of writing something down is the first step toward making it happen. LidoAnthony Iacocca
Whenever a business has employees, there’s payday. Many employers with one or two employees, will pay the same day the pay period ends without much thought to the future precedent being established. The business or organization grows and another employee is added. No big deal – just cut two checks. Perhaps the employees (exempt or not) are paid a salary. It’s a piece of cake to pay the employees. Any cheap payroll software can track these efforts.
Ahh, but if the employer is doing well and hires more employees then minor complications may begin to surface. Some of the employees may be paid hourly. Benefits, if not offered before, may begin to trickle in such as holidays, vacation pay, or a simple retirement plan.
The employer is beginning to feel a little pressure with gathering the time and cutting the checks the same day the pay period ends. If delays occur which inevitably they will, the employee is going to be frustrated because their expectation is not being met because payday was delayed by a day or even by hours. Direct deposit is not even going to be a consideration because you need at least a day and preferably at least two days prior to check date before paying. Yuck.
So do yourself a favor. Pay bi-weekly ( every other week and a lot different than twice a month). End your pay period on the same day such as a Sunday, and pay on Friday. You can do something other than payroll right after the pay period ends, still have plenty of time to pay your employees, offer direct deposit and reduce the risk of error because of a rushed process.
A semi-monthly pay period, even with a five day delay, such as ending the pay period on the 15th and paying on the 20th is still problematic. Overtime, without a good time and attendance system, is difficult to calculate, payoll is processed at different times in the week, weekends and bank holidays can either cause a rush to process the data or delay the check beyond the employee’s expecations. If you do choose semi-monthly pay schedule, consider a delay of seven days between the period end date and the check date to give your organization enough time to process your payroll.
Regardless of which method you choose, you’ll be glad you at least gave the pay period and check date some thought before you hired any employees because changing expectations with your emloyees is rarely fun.
It’s very easy to say “Payday is every other Friday for the two week period ending the previous Sunday.”
Happy paydays,
Bryan Dear
www.payrolldept.biz
