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Surprisingly, federal law does not
specifically address when you have to pay your employees. However,
most states fill in that gap.
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Q: Is there a federal law that specifies a time frame for
paying our employees? What about state laws?
A: Although the federal Fair Labor Standards Act (FLSA)
places many obligations on employers (including overtime, minimum
wage, and child labor requirements), the law does not specify when
wages must be paid or include a specific payday requirement. It
states simply "every employer shall pay to each of his employees . .
. who in any workweek is engaged in commerce or in the production of
goods for commerce . . . not less than the minimum wage." (See 29
U.S.C. § 206(b).)
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However, courts generally have read the FLSA to require the prompt
payment of wages. For example, in Rogers v. City of Troy, 148 F.3d
52 (2d Cir. 1998), the court considered whether a city could change
its pay period. In allowing the city to make the adjustment, it
pointed out that although the FLSA does not assert when wages must
be paid, courts have long interpreted the statute to require wages
be paid in a timely fashion.
Most states have stepped in to fill the void left by the FLSA. In
fact, almost every state has passed legislation specifying minimums
for how frequently (usually biweekly or monthly) wage payments must
be made to employees.
In addition, many also impose restrictions on how quickly the money
must be paid after it is earned. For example, California, Illinois,
Michigan, and New Jersey all specify a minimum of biweekly or
semimonthly wages for most categories of employees and require
payment within a period ranging from 10 to 15 days after the close
of each pay period. New York and Texas also have biweekly or
semimonthly pay requirements for most employees but do not specify
when the wages must be paid after the end of the period. Most states
also allow monthly payment to employees who are exempt from their
minimum wage and overtime requirements.
As a further obligation, many states require advance notice of
paydays. For example, employers in California and New York must
designate regular paydays in advance, and in Illinois, employers
must post notices indicating the regular paydays.
Note, however, that state wage payment requirements may not apply to
employers with collective bargaining agreements that specify payment
periods. For example, California, Illinois, and Wisconsin allow
collective bargaining agreements that set out wage payment
arrangements that differ from state law.
Because of the variations in state requirements, you should consult
the wage and hour laws that apply to your location. |
Personnel
Policy Service, Inc.
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