
Be Part of the Ultimate Safety & Compliance Community
Trending news, knowledge-building content, and more – all personalized to you!
The Fair Labor Standards Act does not require a specific frequency for paydays (though many state laws do). However, employers should establish regularly scheduled paydays. If the amount owed cannot be determined by the payday (perhaps due to an unknown amount of overtime) the employer should pay the amount that it reasonably knows is owed. Also, the employer may have to cut a second check to provide any missing wages, once the amount can be calculated.
The Wage and Hour Division’s Field Operations Handbook offers the following in Chapter 30, Records, Minimum Wage, and Payment of Wages:
30b04 Time of payment. Payment of both minimum wage and overtime compensation due an employee must ordinarily be made at the regular payday for the workweek or, when the pay period covers more than a single week, at the regular payday for the period in which the particular workweek ends. However, when it is not possible, prior to preparing the payroll, to ascertain the number of overtime hours worked by an employee in the last workweek of the pay period, the requirements of the FLSA will be satisfied if the employer pays the overtime compensation as soon after the regular payday as is practicable. Such a payment should not be delayed for a period longer than is reasonably necessary for the employer to compute and arrange for the payment of the amounts due, but, in any event, not later than the next payday after such computation can be made.
In many cases, bonus payments to employees will also affect the overtime rate. However, employers obviously cannot determine the amount of additional overtime until the bonus payment is actually made. Clarification is offered in Chapter 32, Overtime, as follows: “Where bonuses are paid, any extra overtime pay due upon the increase in the regular rate resulting from the bonus payment is due only at the time the bonus itself is paid, not earlier.”