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Bi-weekly to Bi-monthly payroll |
AlisaB
Joined: Sep 27, 2007
Posts: 3 |  Posted: 2007-09-27 10:31
I am soon to be switching all our payroll to a mandatory direct deposit. We currently pay hourly staff every other week and salaried on the 15th and 30th of each month. Many months I am preparing payroll every week. With direct deposit, I'll have have no flexibility when I "cut" checks so I want to switch all employees to semi-monthly payroll. What is the best way to switch those bi-weekly hourly employees to bi-monthly pay taking in to consideration these employees live check to check?
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howard7
Joined: Sep 13, 2001
Posts: 2615 | Posted: 2007-09-28 12:04
I assume your hourly staff is not covered by a collective bargaining agreement.
There is no easy way to convert this. You will need an excellent communications program with notices, flyers and employee meetings. Make sure that you give them lots of time to prepare for the change-Say 3 months minimum.
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rrupert
Joined: Feb 15, 2006
Posts: 1612 | Posted: 2007-10-01 12:31
Also with changing the hourly to semi-monthly, you will get into some possibly nasty overtime issues...since OT goes by workweek and semi-monthly does not. Hopefully your payroll system can handle it, but usually it has to be programmed well to do so. There is a good chance that was a large business reason to have the hourlys be biweekly in the first place.
If you deal with a lot of overtime, I would honestly suggest changing from all semi-monthly to all bi-weekly.
rr
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rrupert
Joined: Feb 15, 2006
Posts: 1612 | Posted: 2007-10-01 12:32
p.s. I am assuming that you have also checked with state law to make sure that payroll frequency is within their limit. Some states actually require non-exempts to be paid more frequently.
rr
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AlisaB
Joined: Sep 27, 2007
Posts: 3 | Posted: 2007-10-01 12:55
Thank you both for your comments. Fortunately we have very little overtime (maybe every other month). I have checked the state requirements and we are only required to pay semi-monthly. I had planned to give the employees 3 months notice of all the changes but it loos like 2 1/2 months will be all I have available in order to make the switch by Jan. 1.
Thank you again- Lisa
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rrupert
Joined: Feb 15, 2006
Posts: 1612 | Posted: 2007-10-01 13:21
Sounds like you have those two issues covered!
Even 2 1/2 months sounds like plenty of time. I would communicate with each and every paycheck. The only other thing I would do is to try to plan a date where the biweekly paydate falls near the 15th or the 30th to start. It will help that the paycheck will be slightly bigger too.
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RobinMB
Joined: Mar 09, 2005
Posts: 202 | Posted: 2007-10-01 14:22
Did you also check to make sure your state allows you to mandate direct deposit? Some states don't and you may have employees who don't qualify for a checking account. What are your plans then?
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AlisaB
Joined: Sep 27, 2007
Posts: 3 | Posted: 2007-10-01 14:48
Yes, I am lucky that the state of TN allows mandatory direct deposit.
If an employee does not qualify for an account, they will be issued a payroll card that is used like a debit card. The fee for accessing funds with this card is less than half that they are currently paying to cash their payroll checks.
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ewilliams4
Joined: Jul 29, 2003
Posts: 28 | Posted: 2007-10-16 06:29
Congratulations!! You have just done the planet a big favor -- all that paper you are not using. There's half the hassle for employees with once-a-month deposit. No more spewing exhaust fumes from the car on payday lunch break to rush to the bank. I'm surprised no other posters have commented on all these advantages. Well done, ewilliams
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mstetka
Joined: Sep 03, 2002
Posts: 3 | Posted: 2007-10-16 07:55
Good morning! I have worked with both semi-monthly and bi-weekly payrolls for years. I understand the frustration of multiple payrolls and agree with your decision to have one. However, were I to vote, it would be to take your semi-monthly people and move them to bi-weekly. It is so much easier to manage. Employees understand bi-weekly pay much better than semi-monthly. Employees can budget easier around bi-weekly. And running a bi-weekly payroll versus semi-monthly from a business standpoint is also easier. Good luck! I've been through the conversion and every headache is worth it.
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Debfranklin
Joined: Dec 29, 2003
Posts: 5 | Posted: 2007-10-16 08:15
I've also done both. I would recommend moving the salaried to match the hourly. Another point to remember is the insurance deduction calcs. If you calc as the annual amount divided by 24pp currently - it will change on bi-weekly.
Bi-weekly has two months with 3 payperiods, (26pp per year vs. 24) so you take out less per pay period. You stated your employees live check to check -this is a big advantage.
Although your reasoning is sound, be very careful switching hourly to streamline your process.
Agree with the other postings - if you do this, communicate and then OVER communicate. Hourly people can get a freaked out over things like this.
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kazia
Joined: Sep 13, 2001
Posts: 5 | Posted: 2007-10-16 08:21
Consider asking in your credit union or local bank to go over budgeting and other financial issues with the change in payroll.
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champion731
Joined: Oct 16, 2007
Posts: 1 | Posted: 2007-10-16 18:06
I think the best advice you have received so far is to change the salaried to a bi-weekly schedule. It is only an additional 2 cycles per year and it is much more employee friendly and administratively managable. If the accounting group pushes back because bi-weekly doesn't align with calendar month & year, keep in mind it is a much simpler process to convert GL entries than all the headaches that a semi-monthly brings.
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aoneill
Joined: Oct 22, 2007
Posts: 3 | Posted: 2007-10-22 10:09
I considered switching to bi-monthly for the GL ease then found my up-graded payroll system could suppress the deductions for those 3rd payrolls. Now I will be able to take the deduction 2x's per month every month and line up with the billing. It is the best of both worlds.
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SheriS
Joined: May 19, 2008
Posts: 1 | Posted: 2008-05-19 16:03
We are contemplating a change from a dual system of bi-monthly pay for salaried with separate cut off dates for hourly. I am seeking information regarding the impact on overtime cut off dates if we move to a strictly bi-monthly pay or to the bi-weekly.
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