Advice and Resolution Corner - Can We Change the Payroll Workweek of Our Employees?

Document created by 1050210 on Oct 30, 2014
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Published Date: 02/17/2014

 

Pat; Rountree

By Pat Rountree

 

Yes, but be careful.

 

The payroll workweek is the fixed seven day, 168-hour period that is used for purposes of determining overtime due for non-exempt employees and the basis for wage payment and deductions. It does not have to correspond to the calendar week. It can be changed. The only caveat is that the US Department of Labor says you cannot change it for purposes of circumventing the Fair Labor Standards Act. In other words, you can’t change it because you got a large order that will result in overtime for employees, and you want to split the week to avoid overtime (or lessen the cost of overtime).

 

When changing a payroll workweek, you should notify the employees as far in advance as possible (minimum of a month and more if possible) so that they can make changes to automatic bank draft dates if necessary.

 

At the time that you change the payroll workweek, if there is an overlap of the old and new workweeks, you will need to figure overtime under both workweeks. The employee would get the benefit of the workweek that results in higher pay during the changeover week.

 

For more information and an example of how to handle overlapping workweeks, please contact a member of CAI's Advice & Resolution Team at 919‑878‑9222 or 336‑668‑7746.

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