The holidays are coming. Even if you don’t personally celebrate the Thanksgiving/Christmas holidays, your business likely has to deal with payroll processing in a special manner (and any other legal holiday, for that matter). For many businesses and their employees, direct deposit is a very common aspect of payroll processing. But banks aren’t open on holidays. So, is direct deposit affected?
Who wants to be the one to tell your employees that they won’t be paid until after the holidays? You undoubtedly wanted their work turned in before the holidays, so why should they have to wait until after the holidays to get paid for the work that they did? It’s a tough situation to be in. You certainly don’t want to put a damper on their holidays.
A List of Federal Holidays
In United States of America, the following are classified as federal holidays:
- Christmas Day – December 25
- Thanksgiving Day – As a floating Thursday holiday, this can be between November 22 second and the 28th.
- Veterans Day – November 11
- Columbus Day – As a floating Monday holiday, this can occur between October 8 and the 14th.
- Labor Day – As a floating Monday holiday, this can occur between September 1 and the seventh
- Independence Day – July 4
- Memorial Day – As a floating Monday holiday, this can occur between May 25 and the 31st.
- Washington’s Birthday – As a floating Monday holiday, this can occur between February 15 and the 21st.
- Martin Luther King’s Birthday – As a flowing Monday, this holiday can occur between January 15 and the 21st.
- New Year’s Day – January 1
That’s 10 days (at the very least) that can send your payroll into a tailspin. You might also have to deal with telling your employees to make sure that they submit their hours early if they are going to go on vacation. And what happens when a few days off needs to be taken by the person who does your payroll? Things like this can be mind-boggling unless you have a payroll provider that is reliable, experienced, full-service, offers customer support, and more.
So What’s the Best Way to Handle Holiday Pay?
When it comes to payroll, here’s the best way to deal with holidays:
- Distribute a schedule – To ensure that the year goes smoothly, at the beginning of the year, make a schedule. This way, throughout the year, all of the employees will know when they get paid.
- Be transparent – Make the practice of whether an employee is getting paid for a federal holiday or not common knowledge. The key is to communicate.
- Be consistent – If you do something once, do it all year. As an example: if, the day before the holiday you pay your employees, that same practice should be continued throughout the year.
A Good Example of Handling Holiday Pay
For your convenience, and clarification, here is a practical example.
Let’s say that you have decided to go ahead and pay your workers before the 4th of July (Independence Day). And let’s say that, this year, it’s on a Wednesday. Your payroll process could work in the following manner:
If Wednesday is when your payroll is normally processed, the plan should now be for payroll processing to occur on July 3, Tuesday.
In the case of direct deposit, also consider early payroll processing, if the date of your check falls between July 4, Wednesday and July 6, Friday.
When it comes to payroll issues, a multitude of solutions are offered by TRAXPayroll.