In a small business one late payment from a major client can make it tough to have the cash on hand in time for the regular pay day. An extra day or two of breathing room might seem helpful to balance cash flow but it will also run afoul of wage and hour law.
The U.S. Wage and Hour Division of the Department of Labor (DOL) responds to this question by stating, “In general, an employer must pay covered non-exempt employees the full minimum wage and any statutory overtime due on the regularly scheduled pay day for the workweek in question.” This information comes from the DOL’s recently published Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues.
Federal and state wage and hour laws require the establishment of workweeks and pay days and the recordkeeping that goes along with this process. The combination of these regulations also makes it hard to change pay day. The DOL State Payday Requirements chart can be a good place to start your information search. States differ in requirements of pay frequency and are specific advance notice needed if payday is going to be changed.
Checking all of the guidelines before reducing any hours saves time, money and headaches. Employees who don’t receive their pay as usual are more likely to head to a state or federal department of labor. The wage and hour investigation can result in back pay and hours spent in response, both of which will grow when the inquiry extends to issues beyond one pay day.