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When to pay when payday is a Holiday

Last post 12-11-2007, 1:41 PM by TXHRGuy. 16 replies.
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  •  11-15-2007, 2:01 PM 2886

    6348240 is not online. Last active: 12-18-2007, 6:21 PM 6348240



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  • When to pay when payday is a Holiday

    When payday is on Friday and the office will be closed in observance of a holiday should I give my employees their paychecks that Wednesday prior, mail their paychecks via US Postal mail or hold their paychecks until Monday?

    Any supporting documentation would be greatly appreciated.

     

    Thank you!

  •  11-15-2007, 2:42 PM 2887 in reply to 2886

    IT HR is not online. Last active: Wed, Oct 10 2012, 9:46 AM IT HR



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  • Re: When to pay when payday is a Holiday

    We have this same situation for the Thanksgiving week and here is how we are handling this: 

    We are giving out our paychecks on Wednesday afternoon as most people are leaving for the day.  Our checks are dated for Friday (the normal pay day) so if they have a live check they will not be able to do anything with it until Friday.  To my knowledge, most banks are open on Friday so the employees can deposit/cash the checks as they normally would.

    I would not deliver by mail or hold until Monday.  Your normal payday is Friday and you want to do everything you can to give the employees their paychecks on the regular pay day.  In this case since you can't because the office is closed then giving the check early is the best option.

    As for documentation - you can go to Library on HR.BLR.com and look under Compensation/Paychecks.  For my state (maryland) this is how the law reads:

     "If the regular payday of an employee is a nonworkday, an employer must pay the employee on the preceding workday (MD Code Lab. and Empl. Sec. 3-502 (b))."

     

  •  11-15-2007, 3:09 PM 2888 in reply to 2887

    HRforME is not online. Last active: 05-21-2013, 12:08 PM HRforME



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  • Re: When to pay when payday is a Holiday

    I agree that the answer can be dependent on specific state laws.  If there is no specific state law, then it falls back to employer policy. If you plan on paying later than normal, it is best business practice to let employees know well ahead of time....especially since some might have auto-withdrawals from their accounts on specific days based on the payroll dates.

    IT HR stated: "Our checks are dated for Friday (the normal pay day) so if they have a live check they will not be able to do anything with it until Friday"

    Please be aware that at least some banks and check cashing locations will cash checks prior to the check date. Once a check is written it is assumed to be immediately cashable (just like post dated checks can be cashed early).  I forget the legal name for this process.  Many times the teller doesn't even look at the date at all. So if their bank is open late on Wednesday, they still might be able to cash it. And depending on how the employer deposits federal taxes (semi-weekly or monthly), it can make a difference on when taxes are owed.  We hand out checks dated Friday on Thursday and my COO deposits it on his way home...no one ever questions the date....Luckily I pay federal taxes so that they "hit" the system on the paydate, so I am well within the window I mentioned above.  The window is defined in IRS Publication 15 if you have any questions about what I mean.

     {On a side note, we had 4 checks clear the whole banking system with NO SIGNATURE on the check-- it was my second payroll and on my first the controller showed me how to print checks and signed them right there...so I forgot to right it down on my checklist and promptly forgot about it on the second run OOPS!  So honestly, I lack faith that the banking system is actually going to catch anything!}

    Since we are closed both Thurs and Fri this next week for Thanksgiving, we will hand out paychecks Wednesday that are dated Wednesday and the direct deposits will hit the employee's accounts on Wednesday.  If we were open Friday, we would hand out checks and DD on Friday.

     

     

     

  •  11-16-2007, 10:21 AM 2891 in reply to 2888

    LadyAnn is not online. Last active: 30 Jul 2008, 4:09 PM LadyAnn



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  • Re: When to pay when payday is a Holiday

    At the beginning of each year, we issue a schedule when paydays will be.  We are paid every other Thursday, EXCEPT...

    For Thanksgiving, we will be paying on Wednesday, November 21, 2007

    For New Years, we will be paying on Friday, January 4, 2008. (We are closed both Dec 31 & Jan 1 and it takes 3 days for direct deposit processing.)

    By letting the employees know when you are paying up front (and reminding them as the time grows closer) there are no questions.

  •  11-19-2007, 12:05 PM 2899 in reply to 2887

    6348240 is not online. Last active: 12-18-2007, 6:21 PM 6348240



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  • Re: When to pay when payday is a Holiday

    Thank you very much for the information.

    California does not have a specific law/requirement when to pay on a holiday therefore I'm having a hard time with my accounting manager on when to pay our employees.

    The information was helpful/useful though and I will keep searching, thank you again.

  •  11-19-2007, 1:13 PM 2907 in reply to 2899

    HRforME is not online. Last active: 05-21-2013, 12:08 PM HRforME



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  • Re: When to pay when payday is a Holiday

    From another labor/HR board I frequent, I have to agree that California has no specific law/requirement.  Which is actually surprising to me.

    One thing to look at, is if you are talking about the year end and paying either the 1st of January on the 2nd OR December 31st.  From an accounting standpoint, there is a huge difference as to which year the amounts are posted to.  So that may be why you are getting some feedback.

    Luckily our accounting group is okay with paying a day early in situations such as these, but I could understand how it could be a problem at other companies.

  •  11-19-2007, 2:29 PM 2910 in reply to 2907

    TXHRGuy is not online. Last active: 05-23-2013, 4:36 PM TXHRGuy



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  • Re: When to pay when payday is a Holiday

    Looking down a list, I counted 51 states with laws governing the payment of wages and I know that all the ones I am familliar with directly address when wages are to be paid.  Definitely check your state law.

    California does actually have something specific.  ยง210 says, "All wages, earned by any person in any employment are due and payable twice during each calendar month, on days designated in advance by the employer as the regular paydays."  I would think that means, at the very least, that you have to designate (and communicate) the day in advance if it is to be a different day from the norm.

     Accounting will always be interested if a payday is changed into a different quarter, calendar year, or fiscal year.

  •  11-28-2007, 11:36 AM 3052 in reply to 2886

    mazhr is not online. Last active: 11-28-2007, 11:36 AM mazhr



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  • Re: When to pay when payday is a Holiday

    Just let everyone know that their paychecks will be available on Thursday instead of Friday...just bump it up one day!
  •  11-28-2007, 11:40 AM 3053 in reply to 2886

    shennes is not online. Last active: 11-28-2007, 11:40 AM shennes



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  • Re: When to pay when payday is a Holiday

    You ask the question as "should I" and i find this the most important aspect of your question.  Unless the company you work for is experiencing cash flow issues why wouldn't you be a compassionate employer and provide employees with their pay the Wednesday before the holiday.  A small gesture that will equate to tremendous good will.  So i ask "why wouldn't you"!

    Happy Holiday's

  •  11-28-2007, 11:42 AM 3054 in reply to 2886

    lillian62 is not online. Last active: 03-19-2008, 3:40 PM lillian62



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  • Re: When to pay when payday is a Holiday

    At my employment I hand out the checks to the employee's Wednesday with Friday paydate. Many employee's have there ways to cash in there checks by presenting it to Cash agencies plus many of our employee's have direct deposit so they know Friday morning funds are available. Now these days there are many ways to have funds and/or cash in checks.    I think it is unfair to hold onto to checks until Monday (unless the employee is on vacation and does not have direct deposit then of course nothing can be done) even mailing to leaving employee's without funds prior to holiday especially when it is a long weekend and employers know many employee live check to check.   

     

  •  11-28-2007, 12:23 PM 3055 in reply to 3054

    fnord72 is not online. Last active: 11-30-2007, 10:35 AM fnord72



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  • Re: When to pay when payday is a Holiday

    I see that nobody mentioned the tax liability issue.  If the check is dated on Friday, but you hand out the check on Wednesday, then the employee has "constructive receipt" of their pay on Wednesday, and it is from Wednesday that the IRS will determine when your employment taxes are due.  you may open yourself to penalties from the IRS if you do not also pay your taxes early.
  •  11-29-2007, 11:32 AM 3077 in reply to 2886

    RBHR is not online. Last active: 09-03-2008, 6:47 PM RBHR



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  • Re: When to pay when payday is a Holiday

    We use an outside service to process payroll.  Last year we left the dates on our usual paydate and passed out checks early... we got fees charged because people did not follow the memo of not cashing the checks until Friday's Date.  This year we changed the Check Dates to the date that they are distributed to the employees.
  •  11-29-2007, 2:33 PM 3082 in reply to 2886

    apascua is not online. Last active: 11-29-2007, 2:37 PM apascua



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  • Re: When to pay when payday is a Holiday

    I work in California and we pay employees bi-weekly, eventhough the state only required semi-monthly payments.  Every other year we create a 2-year payroll schedule (chart); listing the exact pay period ending date, payroll process date, and Pay Date (every other Wednesday).  We take into consideration the holidays for those years when creating the schedule.  (you can get the federal holiday schedule from http://www.opm.gov/Operating_Status_Schedules/fedhol/index.asp)

    The top of the Pay Date Column says "Pay Date (Wednesday)", so if we see that payroll will be delayed by a holiday the exact payroll date is listed with "Thurs" (or "Fri") before it so that it is clearly identified by the staff as a delayed payroll.  We also send a friendly email reminder to all staff at the beginning of the week whenever this delay occurs.  Everyone is fine with it because they have had advanced notice.  (at least a year in advance)

    Also, the California Department of Industrial Relations had the following comment on their website (http://www.dir.ca.gov/dlse/FAQ_Paydays.htm):

    "In California, wages, with some exceptions (see table below), must be paid at least twice during each calendar month on the days designated in advance as regular paydays. The employer must establish a regular payday and is required to post a notice that shows the day, time and location of payment."

    It also listed the following question and answer on the same page:

    "Q. If my regular designated payday falls on a holiday, when should I be paid?

    A. If your regular designated payday falls on a holiday and your employer observes that holiday by closing its business, your employer may pay your wages on the next business day."

    Hope this info helps!!  Cool

  •  12-04-2007, 8:42 AM 3128 in reply to 3082

    californian is not online. Last active: 01-11-2012, 9:23 AM californian



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  • Re: When to pay when payday is a Holiday

    Thanks! this is very useful. . . . great tips!
  •  12-04-2007, 2:31 PM 3153 in reply to 3128

    Tree is not online. Last active: 12-05-2007, 12:53 PM Tree



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  • Re: When to pay when payday is a Holiday

    TXHRguy -- 51 states?  I guess either DC or Puerto Rico must be in that....(sorry, you had me chuckling on that one)

     

    I agree with the above - we do pay early when there are holidays "in the way," and we do the taxes at that point as well.  If they get the checks early, they get direct deposit early, and the govt kitty has to be happy.  Makes for a tight cash flow from time to time, especially in my not for profit world, but we work it out.

     

    Glad to see others are following the same guidelines.  


    ~ Tree

    To live only for some future goal is shallow. Its the sides of the mountain that sustain life, not the top. (Robert M. Pirsig)
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