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Compensation  >>   Bi-Weekly vs Semi-Monthly Pay Cycles Search Discussion Posts
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Bi-Weekly vs Semi-Monthly Pay Cycles  
Posted: 09/14/2009 11:02am   71 Views

We currently pay all non-union employees on a semi-monthly basis, including non-exempts who qualify for overtime, shift differential and various premium pay in a manufacturing setting.  What pay cycle do most manufacturing sites use to pay their non-exempt employees?


Bi-Weekly vs Semi-Monthly Pay Cycles  
Posted: 09/14/2009 11:07am   Revised: 09/14/2009 11:07am  

Welcome to the WorldatWork Online Community!

All our 700,000 employees (90% are non-exempt) are paid biweekly. 


Bi-Weekly vs Semi-Monthly Pay Cycles  
Posted: 09/14/2009 11:18am  

We (financial/insurance) made the switch from semi-monthly to bi-weekly several years ago.  Our data showed the bi-weekly model more prevalent across all industries.

Forgive me for digressing into benefits, but if you switch, I strongly advise retaining a 24-deduction benefits schedule.  Have the first deduction cover days 1-15 and the second cover days 16-31.  Suppress deductions on the third pay period of any month. 

Although bi-weekly benefit deductions are the norm, we encountered several interesting issues.  Most carriers consider membership on a month-to-month basis, and the bi-weekly schedule doesn't mesh well.  Also, there are statutory monthly caps for pre-tax parking and other transportation benefits. The third pay period of any month causes problems for those.


Bi-Weekly vs Semi-Monthly Pay Cycles  
Posted: 09/14/2009 11:28am   Revised: 09/14/2009 11:35am  

A must-read in case you decide to switch is this discussion string called "27 pay periods."  It discusses all the issues related to the 27 pay periods that appear every 11 years.  (For example, make sure your finance people understand the 27th pay period so they can plan for it in advance of their fiscal year book-keeping.)  Keep those issues in mind when you develop your transition plans and communications.

Even though the 27th biweekly pay period is a challenge on occasions, many have successfully dealt with it.  Especially since perhaps the biggest advantage to a biweekly system is the FLSA overtime rules that talk about a weekly entitlement to overtime.  Going biweekly makes it much easier for administrators and employees to see that overtime pay matches the overtime hours. 

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