From the Experts: Options to Consider When Regular Payday Falls on Weekend or Holiday
My company has been in business for less than a year, and when we started, we decided to go with a bimonthly pay schedule. Our paydays have always been on the 5th and the 20th of the month. I became concerned about the timing of paying my employees because the second payday this month falls on a Sunday. Do I have to pay my employees on the Friday before the payday? That will really shorten our time to process the payroll.
When a company uses a semimonthly or bimonthly payment schedule, this issue can arise several times per year. In addition, this issue can affect businesses that pay once a week or once every two weeks if payday falls on a holiday.
The California Government Code recognizes approximately 20 holidays each year (California Government Code Section 6700).
According to the California Division of Labor Standards Enforcement (the agency that oversees wage and hour issues in California), if a regular payday falls on a Saturday, Sunday or holiday recognized by the state, timely payment of wages can be made on the next regular business day following the scheduled payday (DLSE Enforcement Policies and Interpretations Manual Section 7.60).
Although the law does allow a business to pay its employees on the business day following the regular payday if it falls on a weekend or a holiday, it is better for employee morale if the payment can be made earlier.
If you cannot make the payment before the weekend or holiday due to extenuating circumstances, it is important that you let your employees know exactly when they will be receiving their paychecks, in order to avoid confusion and hard feelings among your employees.
David Leporiere, Employment Law Expert, CalChamber
CalChamber members can read more about Holidays in the HR Library. Not a member? Learn how to power your business with a CalChamber membership.
Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred members and above. For expert explanations of employment laws and Cal/OSHA regulations, not legal counsel for specific situations, submit your question at hrcalifornia.calchamber.com.