NH Wage Law Update: Bi-Weekly Pay Permitted After July 11, 2017, Without NHDOL Approval
Effective July 11, 2017, employers will no longer need to seek approval from the NH Department of Labor if they wish to pay employees on a bi-weekly basis instead of weekly. HB 194 amended RSA 275:43 to change the required payment of wages from “within 8 days including Sunday after expiration of the week in which the work is performed” to “at regular intervals not to exceed 14 days” and also adds references to the bi-weekly pay. The updates to RSA 275:43 can be viewed here: http://gencourt.state.nh.us/bill_status/billtext.aspx?txtFormat=html&v=CF&id=527
Moving from a weekly pay frequency to bi-weekly pay can be advantageous to employers for several reasons including:
- Less Processing Time and Fewer Errors – Moving from 52 pay periods per year to 26 obviously means less time for your payroll processing staff to have to deal with reconciling payrolls, inputing hours and calculating payroll deductions like payroll taxes, health insurance and HSA/FSA Savings Accounts, retirement contributions, etc. As is the case with the nature of human errors, the fewer times something has to be handled, the lesser the potential for errors. Bi-weekly pay also lessens the number of General Ledger exports required for your accounting staff to process.
- Cost Savings on Labor and Payroll Fees – Not only will your labor costs for payroll processing be reduced and free up HR/accounting staff to focus their efforts elsewhere, but you may also reduce any fees you pay to your payroll processing service which typically charge a flat fee per pay period and employee / check each time the are processing your payroll.
- Reduces Paperwork – While solutions like Checkmate HCM provide electronic storage and anytime access to workforce data, including extensive reporting and custom dashboards, many HR professionals and other C-Suite personnel still prefer to maintain hard copies of their records. As such, many keep each copy of their payroll registers and other reports and/paperwork every time payroll is run. If you have employees who receive live checks, there will also be fewer live checks to track and lessen the chances of having to replace lost or stolen checks.
When considering whether or not to move to bi-weekly payroll, there are also pros and cons for employees that you and your management team should review. Bi-weekly pay will provide employees with a larger payment (presumably twice that of a weekly paycheck) so they can pay more bills at once and can mean fewer trips to the bank for those who still receive live checks. However, you may have employees living paycheck to paycheck and are currently accustomed to weekly pay thereby counting on being paid every week in order to stay on top of making their monthly payments. Once you make a decision to change to a bi-weekly pay period, you should provide employees with as much advance notice as possible so that they can plan accordingly. Some employers also choose to have weekly pay periods and highlight it as a benefit in their talent acquisition and recruiting efforts, as it provides employees more immediate compensation for their hard work and prevents new employees from having to wait 2-3 weeks to receive their first paycheck depending on where their start date in the pay cycle falls.
If you wish to learn more about the required pay frequencies in other states, you can visit the Federal Department of Labor site: https://www.dol.gov/whd/state/payday.htm#foot18