MemberNovember 16, 2023 at 12:55 pm
Personally, in managing finance and HR I found semi-monthly easiest to administer, because it’s easier to split things like monthly benefits premiums, cleaner when crossing calendar and fiscal years, and cleaner mapping to grant spend downs that track on a monthly basis. Also I think staff find it easier to know that their paycheck comes on
specific dates each month, rather than every other Friday (because most
bills are due on specific fixed dates). But, some states actually don’t allow you to pay hourly workers semi-monthly, so it’s worth checking the laws in your state. Paying on a lag isn’t a huge change and does leave more room for approving timesheets, but keep in mind that you will need to account for the accrual each month of wages earned but not yet paid.
Whatever you do, make sure to communicate clearly and far in advance with staff and help them understand how their paycheck will change. (Obviously the amount of each paycheck will change if you switch to bi-weekly, but also if you switch to paying on a lag, you’ll need to truncate a pay period so that you can keep pay dates, or you need to shift pay dates and people’s first paycheck will be delayed.) Cash flow is obviously very important and personal to people, and a lot of finance/HR folks seem to underestimate this when making a payroll change.