For many small businesses, especially in the early business development stages, paying employees on a monthly basis is an appealing option because it saves money and increases cash flow. If you are one of these employers that pay your employees on a monthly basis, I have bad news for you - you probably can't do that. Most Georgia employers are required by law to pay employees at least two equal pay periods during the month.
Every person, firm, or corporation, including steam and electric railroads, but not including farming, sawmill, and turpentine industries, employing skilled or unskilled wageworkers in manual, mechanical, or clerical labor, including all employees except officials, superintendents, or other heads or subheads of department who may be employed by the month or year at stipulated salaries, shall make wage and salary payments to such employees or to their authorized representatives (1) by lawful money of the United States, (2) by check, or (3) with the consent of the employee, by authorization of credit transfer to his account with a bank, trust company, or other financial institution authorized by the United States or one of the several states to receive deposits in the United States. Such payments shall be made on such dates during the month as may be decided upon by such person, firm, or corporation; provided, however, that the dates so selected shall be such that the month will be divided into at least two equal periods; and provided, further, that the payments made on each such date shall in every case correspond to the full net amount of wages or earnings due the employees for the period for which the payment is made.
If you currently pay your employees on a monthly basis, you should seriously consider switching to one of the following payroll frequencies:
- Bi-Weekly
- Bi/Semi-Monthly
- Weekly
Weekly is usually the least desirable option to employers, leaving you with the choice of Bi-Weekly or Bi-Monthly. According to a small business chronicle:
Some companies prefer a bi-monthly or bi-weekly payment schedule to minimize the number of paychecks that need to be processed each year. Bi-monthly pay is often preferred over bi-weekly for matters of accounting, because the company doesn’t have to deal with those three payday months. On the other hand, some workers prefer weekly pay to bi-weekly or bi-monthly schedule to avoid dealing with a week without pay. However, some workers like the idea of receiving two extra paydays per year, as is the case with a bi-weekly payment schedule. Bi-monthly payments sometimes cause problems for workers because the dates could fall on a weekend or holiday.
If you are an employee that is paid once a month (or less often), please know that there are other exceptions to this rule. For example, if your employment is subject to an employment contract that outlines the terms and frequency of your compensation, this law may not apply. If you are an employer or employee and have questions about your individual situation, please consult an attorney for advice.
Erica N. Cordova is the Managing Attorney of HR Esquire - The Cordova Law Firm LLC. At HR Esquire, we believe in passing the savings along to our clients through our part-time law firm model. We strive to help small businesses develop a solid foundation and legal strategy so they can be successful. We will work to improve legal compliance and employee relations. Our goal is to improve your business' performance and provide legal advice for a successful human resources strategy via our Offsite General Counsel. Find out how we can help you and your business today! If you have questions about this article, please email contact@hresquirelaw.com.
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