Under the Fair Labor Standards Act (FLSA), you can change your pay period or payday if the change
- is made for legitimate business purposes,
- is permanent,
- is not made to avoid paying overtime,
- does not violate minimum wage laws, and
- does not unreasonably delay wage payment.
If you decide to change your pay periods or paydays, your employees probably won’t be too happy about it. Follow the six steps below to make the transition as easy as possible:
- Determine why you’re making the change to ensure that it does not violate any FLSA regulations.
- Determine what the change will be. Are you moving payday from Friday to Monday? Are you switching from a semimonthly pay period to a biweekly pay period?
- Determine whether any deductions will be affected by the change and learn how to make those adjustments.
- Choose a date for the change to be implemented.
- Give your employees plenty of notice about the change. Many states have laws about when you must notify your employees of any changes to their pay day, so make sure you give at least the required about of notice. For example, Nebraska requires that you give your employees at least 30 days-notice.
- Implement the change and be available for any questions or concerns your employees have.