Payroll Frequencies
4284277
1 Post
I need some help understanding bi-monthly payroll since our new CFO has decide that we need to change from our current bi-weekly payroll. We currently use a bi-weekly payroll with 26 pays and benefits are taken from each pay. Can a bi-monthly payroll be other than on the 1st and 15th? A majority of our Associates are hourly non-exempt and if we go to a 1st & 15th I see a lot of problems ahead with OT calculations and the fact that payroll preperation will never be able to be done on a set day of the week. HELP!!
Comments
Bi-monthly = every 2 months. I think you mean semi-monthly *Ü*
That said, you have pegged the two largest problems. What payroll system do you use? Do you do payroll in-house or is it outsourced? Either way, the system should be able to handle the OT calculations if programmed correctly. If you use "payroll in a box", it might be an issue. It is doable, but I strongly suggest programming the payroll system to handle it rather than trying to do it manually. You may even need to look into changing payroll systems to do so.
Most CFOs like semi-monthly payroll periods because it is much easier to budget (since there are no months where payroll spikes due to a 3rd payroll and because benefit deductions match more closely to benefit billing). And currently we are dealing with the 27th payroll anomaly that occurs every 10-12 years.....
You need to check your state wage laws to make sure semi-monthly payrolls for non-exempt employees are legal. There are some states that require pay within a certain # of days after close of the payweek and often semi-monthly doesn't accomplish that. So that may be one way to get around the change.
To answer your other question, most semimonthly pay dates are either the 1st and 15th or the 15th and the last day of the month. Those are the industry standards -- but again depending on state law, you might have some wiggle room.