Expert: Shirley McAllister, CPP, PHR - 4/15/2010

Question
I'm helping out a non-profit which is on a semi-monthly schedule with about 10 salaried and hourly employees.  Currently the pay period end date corresponds to the check date, so there is no "lag" between the end of the pay period and the check date.  This causes a number if problems in terms of estimating hours for the final days of the pay period not to mention the overall processing schedule as a whole.

I want to introduce a lag of at least 1 week (preferably two) between the pay period end date and the check date.  How can I do this while minimizing the financial impact to the staff?

Thanks,
Tom

Answer
I actually had to do this for 165 employees back in 1998.  The answer is communication and notice. Give them plenty of notice and communicate the reason.  

You will have some employees upset because their checks will be shorter, but tell them that yes there will be a one time shortfall not because they are being shorted, but because one week is being held in arrears and will be paid upon termination.

We did allow those that had it to trade in vacation for the two or three days short if they wished to do so. This is totally up to the company it is not necessary to do so.

After this one payperiod time will turn in on every Friday and be paid on the next Friday. (or whatever day you choose) and it will always be the same. Also there will be 26 payperiods next year instead of 24.

It is so much easier to do biweekly payroll than semi monthly.

For the Salaried you will have to figure out how much annual salary was paid in the pay periods already paid , than subtract it from the annual wage and divide the balance by the remaining pay periods in the year to obtain the correct salaried amount. You do not have to do this for hourly because they are paid for the hours they work.

Shirley