Expert: Shirley McAllister, CPP, PHR - 11/24/2009

Question
Can you give some supporting documentation that details year end payroll.  I am specifically looking for something that says that wages are non taxable until paid.  There is a discussion going on as to whether or not, if our final pay period of the year is 12/28/09, if we have to pay our employees for the final 4 days of the year or if it rolls over to next year.

Thanks  

Answer
year end would not make a difference in how you pay.  For accounting purposes you simply accrue the hours into the current year and reverse the accrual in the next year.

You are to pay each pay period as you usually do. The pay periods just keep on going like always. You do not pay more at the end of the year and have a shorter pay period in January.

Our pay period is from Dec 26 through January 1 and is paid on January 8th.

The Fair Labor Standards Act (FLSA) requires payment of at least the federal minimum wage for all hours worked in a workweek and time and one-half an employee's regular rate for time worked over 40 hours in a workweek.

The employer must post a notice in a conspicuous place, specifying the regular paydays and the time and place of payment.

States also have laws, which vary by state, regulating pay periods. Most states require that once a pay period is established it must be adhered to.

If you look in your state laws it will say you must pay on your regular pay periods.

Shirley