This article was written by Cody Wilkins, Payroll Business Analyst at Helpside.
One of the most basic requirements for an employer is providing consistent and convenient paychecks for employees. Not only is this a legal requirement, but it is an expectation from your employees, who agree to exchange their work at your company for pay. There are many methods you can use to pay your employees. Here are some key points you need to be aware of to make employee payroll run smoothly in your company.
When do I need to pay my employees?
The full process of when you pay your employees is referred to as your Pay Frequency. Hours and pay information are gathered between a structured time frame which is referred to as the Pay Period. The actual day that pay is delivered is the Pay Date. It’s often a good idea to have a lag of at least a few days from the end of your pay period until the actual pay date, to leave time for compiling and processing the payroll. There are four different payroll frequencies, all listed below, each with their own practical use. Evaluate your options and choose the one that is the best fit for your organization and falls within your State Payday Requirements.
Pay Frequencies
- Weekly: Payroll processed on a consistent day every week
- Bi-Weekly: Payroll processed on a consistent day every other week
- Semi-Monthly: Half-month pay periods with pay dates being two consistent dates each month (Ex: 5th & 20th)
- Monthly: Full month pay periods, pay date must be the same day each month, or the final day of the month.
Time and Attendance
Tracking of employee’s hours, breaks, work schedules, and days off can prove to be time consuming or difficult. Even a small company with a few employees can have trouble keeping accurate records. A time and attendance system could be the solution to your problems by saving you time, money, and headache, with more accurate time tracking. If you are a current client of Helpside and are interested in learning more about our TimeClock solution, reach out to your assigned Payroll Specialist and they will schedule a demonstration.
Pay Methods
Once you established a pay frequency, you will need to determine how you will deliver funds to your employees on pay day. You can use paper checks or direct deposit to transfer funds to a personal account or to a pay card. When making your choice, keep in mind some states have requirements on which delivery method(s) to offer employees. For example, Utah allows employers to require direct deposit if they pay at least $250,000 in payroll taxes to the state or if at least two-thirds of company employees agree to accept payroll direct deposits. View your State’s Labor Department website for more information. Below are details on different pay methods. Consider which would work best in your company.
- Check : All 50 states allow payment to employees via check. This method is slightly inconvenient in the digital age as it still requires the employee go to a physical bank to deposit money for use. Some find it convenient for their industry.
- Direct Deposit: This is by far the most popular and preferred payment method. It’s convenient, real time, and eliminates problems posed by paper checks.
- Pay cards: Pay cards are a newer concept and work in similar fashion to direct deposit. Pay cards are pre-funded (the employee’s pay is deposited to the card). The card represents and acts as a pseudo bank account and debit card for the employee. They are specifically appealing to employees who lack a relationship with a bank or financial institution but still wish to receive pay electronically for its ease of access.
Pay Statements
Employers may be required to provide employees with a statement of earnings, hours, taxes, deductions, and period dates for each payroll, often called Pay Stubs. To identify your state requirements, you will want to look at the federal and state laws. At Helpside, we provide the current details along with year-to-date information in our pay statements.
Pay Upon Termination or Separation
When an employee separates employment from a business you still have to pay them their final check. When figuring out how to pay an ex-employee their final check there are two factors to consider:
- Is the separation voluntary or involuntary? A voluntary separation occurs when the employee initiates to terminate their employment with their employer. An involuntary separation occurs when the employer initiates to terminate employment with the employee.
- What state does the employee physically works in? Every state has a final pay law, pending on the type (voluntary -or- involuntary) termination. For example, in the state of Utah an employee who is terminated must be paid their final check within 24 hours. This means that the employee must either have a live check in hand or money sent via direct deposit to their bank account within 24 hours. If an employee voluntarily resigns or quits, the employee must be paid on their next regular pay date. We have a handy resource available to help you determine the Final Pay Laws By State.
Payroll can get complicated, particularly if you have employees working in multiple states. Having experts by your side can make this process easier. Reach out to Helpside at service@helpside.com with any questions you may have about accurately paying employees.