North Carolina; Sunday pay date

[CatHerder]

We operate a seasonal eight-weekend festival. For nearly thirty years we have run two separate payrolls for our management staff (who get paid on alternate Fridays year round) and our seasonal hourly employees (who are paid weekly on Sundays during the run of our show). We have always found Sunday the optimal day to pay the seasonal employees because 1) it is one of only two days a week they are on premises, and 2) we're just a weekend job so if we hand them their checks on Saturday, a quarter of them won't even show up to work on Sunday. (Sad, but unfortunately this is the nature of part time, seasonal employment.)

We are in the process of changing our out-of-house payroll service provider. We are attempting to merge the two payrolls, as separate ones are pretty costly with this provider.

One rep told us it wasn't legal or possible to establish your payday on a non-banking day, and then after researching a bit told us we could override the system and issue on a Sunday, but that the management staff whose checks are on direct deposit would not go in until the next day. It was suggested we make Friday the official payday so that the management staff could continue to have their Friday direct deposits. The only remaining concern then, is whether it is legal to have all the checks reflect a Friday pay date, but not distribute the seasonal employee checks until Sunday.

I believe that employers must establish a payroll and make employees' checks available to them on that date, and that it is illegal to withhold them. Is it enough to publish to our employees that the official pay day is on Sundays, or are we legally required to distribute the checks on the date printed on them?

Thank you in advance for sharing your time and expertise.

[ElleMD]

Make payday Monday and give the physical checks out Sunday night. Or, keep their paydate as Sunday, and it doesn't matte when you run payroll on the back end. Are you really processing checks on Sundays for the current shift worked? If possible, I'd delay payday a week or even a few days. Paying current is a royal pain. If an employee arrives late or leaves early you have to cut them a new check on the spot. Frankly it seems DD would be the way to go even for the seasonal folks.

[CatHerder]

Hi ElleMD,
No, I'm sorry if I wasn't clear, we do take one week to process and pay on the following weekend. We just have attendance problems if we give the checks out before the end of the day Sunday. If an employee was planning to abandon ship, but has to come in and pick up a check, we at least get them through the weekend. (And were trying to maintain the Friday direct deposit for management.)

So if we set the pay date as Friday in order to keep direct deposit on that day for management, it is legal to just hang on to the seasonal people's checks until Sunday as long as we are clear with them that that is when their pay day falls?

[hr for me]

A few thoughts: (1) I don't think there is a problem with the check date as long as you are paying the taxes owed from that check based on the check date, not the date that you actually hand them out. I am not sure that paying Friday vs Sunday would matter much but I'd hate for you to get caught with penalties for not paying taxes on time as your payroll system and the IRS will assume that constructive receipt was on the date of the check.

(2) And just make sure that Sunday is not too many days from the end of the payroll period for hourly seasonal employees.

(3) But you might get some angry employees asking why you are holding paychecks for two days and they might see that as the employer having money issues. Not sure you want that type of atmosphere/culture for something that truly isn't a problem (money issues)

[ferretrick]

Your rep doesn't know what she's talking about as far as telling you it's illegal to pay on Sunday (or simply doesn't want the extra work of making it happen). However, the direct deposit issue is probably legit.

As far as taxes, the Sunday versus Friday would make a difference, assuming OP is a semiweekly depositer. If the pay date is a Friday, her tax deposit would be due the following Wednesday, it's Sunday their withholding taxes would not be due till the following Friday. However, both for simplicity and to avoid any question, if you go with the dating the check Friday plan, I would follow hr for me's advice and simply consider all the taxes due from the date of the check rather than argue with the IRS.

I don't think the type of employees that do seasonal summer work (I'm assuming lots of teenagers/college students) would even pay notice the check date unless you bring it up. If possible, try to keep it secret that you even have the checks before Sunday and probably no one will know the difference.

Frankly it also just sounds like your rep is making things difficult because they want less work on them. If they take you on as a client at all, there really isn't THAT much more overhead involved in running a separate payroll for management and seasonal, nor is there any reason they shouldn't be able to pay on a Sunday. You are the customer here, so if you are bringing a good size account to the table, I wouldn't hesitate to tell them that running the two separate payrolls at no additional charge, or at least a minor one, is what is required to get the business.

[cbg]

Not your question but just a reminder; North Carolina is one of the few states that requires written notification to all employees for any changes in the terms of employment. So any changes to the pay date will require that you notify all affected employees, in advance, in writing.

Just to keep in mind.

[CatHerder]

We are familiar with payroll tax deposit requirements and have factored that into the equation. Compliance won't be an issue. I think all other questions and concerns were covered. Thank you all for your input. Your assistance on this forum has been a solid resource for me more than once.