Pay Period Policy: Why Do I Need This Policy?

Pay Period Policy

Why do I need a Pay Period Policy? to eliminate any confusion for your staff. In this policy you will specify what your pay periods are and when the paycheck for this time will be issued. I have run into more questions about whether a company is holding checks back for long periods of time. Prior to writing your policy it is critical that you understand and know what your state employment law says about this subject. I know for a fact that California has very specific guidelines about this topic.

Let's first establish what a pay period is and how you can produce a professional employee handbook pay period policy for your employee handbook. A pay period is the length of time a person works in a certain period of time. I know this sounds like double talk but it really isn't. Your established pay period needs to cover what constitutes a day, week, and more depending on how long your pay period is. Ultimately a pay period is the time counted for one pay check.

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Pay Period Policy: 
Generally speaking, a day would be from 12:00 o'clock midnight to 11:59 pm the following night…

So, if you were producing an employee pay period policy for a two week pay cycle it would include a start and stop time for each day and each week. This is important for calculating overtime pay. Generally speaking a day would be from 12:00 o'clock midnight to 11:59 pm the following night just one minute prior to 12:00 midnight. However, you can establish whatever time frame you want for a one-day period, but make sure it does not violate state law or the federal Fair Labor Standards Act.

The same would be for establishing a week. In your employee pay period policy you would define what a week of work is. As an example, it may be from 12:00 midnight Sunday morning through 11:59 p.m. the following Saturday night. So, if you were paying overtime for anything over forty hours in one work week, this would become very important. Remember though that most states and federal employment laws have a problem if you are trying to manipulate the system in an effort to avoid paying overtime.

Define how someone is affected when they start their scheduled work day in one pay period and it ends in another…

Also, as part of your employee handbook pay period policy you want to define how someone is affected when they start their scheduled work day in one pay period and it ends in another. How will and when will it be paid. In this case you would either state that the time would be included in the pay period that the employee started their scheduled work time or when they ended it. Again, this is important for overtime purposes. Once you have established it though, don't change it unless you check with a legal professional.

Another topic that should be covered in an employee pay period policy would be if there are questions regarding how much time an employee worked. No matter how good you are someone at some point is going to question whether you counted all their worked hours or not. In your pay period policy, you want to address this and how and when those hours would be paid. Again, state law could have an impact on this. Generally speaking if the amount is significant (maybe $25 or more) an additional check should be issued to cover the difference.

If your business pays employees a car allowance…

On the other hand, if the amount paid was a mistake in the employees favor your employee handbook pay period policy should be careful not to punish the employee by making them wait an additional amount of time for a pay check. Again, I would double check with your state employment laws to make sure you comply completely with them. Many times, a reputable employee handbook templates provider will have very well written pay period policies that you can use as is' of modify to fit your specific needs.

The last topic that we will cover in this article for our employee handbook pay period policy would be if your business pays employees a car allowance, travel, or other reimbursements of any kind. How will these be handled? Included in this part of your employee handbook would be any requirements that are necessary to be reimbursed, such as, receipts, completed company forms, etc. Make sure it is clear what is expected and again check with your state employment laws as to what is acceptable in your state.

Thank you and may God bless you!


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