Why Do Employers Hold The First Paycheck?

Why Do Employers Hold The First Paycheck?

Sometimes, it can be frustrating when you start a job, and when it’s payday, you expect your first payment, but you’re being denied. We will discuss why employers hold the first paycheck. After all, the major delight and main encouragement of a worker is in his or her pay. So why do many employers delay in holding the first salary?

Well, employers do not have the legal right to withhold payment of workers. A lot of companies roll out paychecks to their employees on the same day. A new employee’s paychecks can come a little late because an employer may need to complete all paperwork before paying. Everything is dependent on the system the company adopts. Also, if a new employee does not start the job early, maybe he or she started in the middle of a pay period, an employer can decide to hold that employee’s first paycheck. Some employers only pay according to the number of days worked for.

When Will The First Paycheck Be Issued?

Issuance of the first paycheck is dependent on the company’s rules and regulations. Different companies with different rules. While some pay weekly, some pay biweekly, some other companies pay their employees on specific dates. If an employee resumes work on the first day, there’s a high likelihood that an employer will offer that employee his or her paycheck on the expected date. However, a paycheck can still arrive late as a result of balancing all paperwork. Maybe late by a week or two. Overall, when the first paycheck is issued is dependent on the method of operation of the company.

How To Know The Amount Of Paycheck To Receive?

Before an employee can receive a paycheck, some factors are considered. Factors like taxes, Medicare, and employee benefits are factored to determine the amount of paycheck an employee receives. Taxes have to be deducted to know the amount of paycheck to receive. We have Federal, State, and Local taxes. Medicare ensures the health of American citizens who are over 65 years of age, and this is also a necessary subtraction. Employee benefits are also deducted from each paycheck. Some of the benefits include medical insurance, dental insurance, and even life insurance. 

How Will The Paycheck Be Issued?

Paycheck issuance varies from company to company. Paychecks can be issued in different ways. Some of these ways include:

  • Direct Deposit: Many companies make use of direct deposits. Employees are given a form to fill whereby their necessary bank information is supplied. Then at every payday, the money is sent directly to their bank account. This method is very safe as the money can‘t be lost. 

  • Paper Check: For companies who do not make use of direct deposit, then a paper check is issued to employees. The paper check can be delivered to the home address supplied by the employee or it can be delivered to an individual during work or at a particular set location. 

  • Cash: Some other companies prefer to roll out paychecks in cash. It’s all dependent on the type of company involved. Cash payments involve the physical handling of money to workers instead of sending it to their bank accounts. This method of paycheck issuance is a little bit risky as money can be lost.

  • Payroll Card: This method of paycheck issuance is a bit different from the first 3 methods. The company has a payroll card for each worker whereby the wages of a worker are loaded onto the card at every payday. This method is beneficial to workers without a bank account as they can withdraw their earnings from the payroll card. Also, employers who want to save the cost of printing paper checks can tap into this paycheck issuance option.

Whatever way the paycheck is issued, it must be a transparent process. Originally, on the first day of work, employers will give employees insight into how their pay will be delivered during orientation for new workers.

What Types Of Pay Schedules Exist?

Pay schedules can exist in different formats, depending on the method of operation of the company. Pay schedules can exist in these formats: 

  • Weekly: The weekly pay schedule implies that an employee receives his or her wages at the end of every week. Many weekly pay schedules typically fall on Fridays. This connotes that an employee will receive a paycheck 4 times every month and about 52 times every year. Not all jobs pay weekly. Most jobs that offer pay schedules every week include service render jobs such as waiter, cashier, etc.

  • Biweekly: Biweekly pay schedule pays every 2 weeks. That means for a month. An employee is paid twice. This method of paycheck issuance is also common, and it typically falls on Fridays. Jobs that mostly make use of this system of paycheck issuance include rooms ranging from administration to marketing.

  • Semimonthly: This format of paycheck schedule is somewhat similar to the biweekly. But this paycheck issuance format falls on specific days of the month. For example, a company may decide to pay its workers on the 5th and 20th of every month. The days of payment vary from employer to employer. Jobs that typically receive this kind of payment method include teachers, writers, etc.

  • Monthly: This paycheck issuance schedule is not common. An employee receives a paycheck once a month, which translates to 12 times in a year. An example of a job that offers pay schedules every month includes salesmen and women.

When Will The Last Paycheck Be Issued?

After resignation, termination of appointment, or getting sacked at work, this question may arise in any employee’s mind. Getting the last paycheck depends on the organization and policy of a company. While some employers may issue a complete paycheck immediately, some other companies may pay you for the number of days worked. If an employee is sacked from a job, it is most likely that the employer will have the final paycheck in place, although this isn’t certain. The time a final paycheck is issued is dependent on the employer and the company policies.

Why Do Employers Hold The First Paycheck?

When it gets to a situation where it becomes constant for an employer to issue late paychecks, it is necessary to take the right steps to correct that action. Below are some of the ways it can be corrected.

  • An amicable settlement with the employer: An employee can walk into an employer’s office and talk things out with the employer. It is not a bad idea if an employee asks their employer why they are always paid late. If this approach doesn’t work out, then an official complaint should be filed.
  • File an official complaint: An official complaint can be filed, thereby making the appropriate authorities aware of the current situation. The appropriate authority can then look into the matter and act accordingly. A hearing can be held to investigate the issue. In case any employer objects, the labor court can take up the case. 

When an official complaint is filed, it must be filed when the employer is still within that organization within some months of resigning. The complaint must be filed with the relevant authority.  

How Can You Manage Your First Paycheck?

So now, you have earned your first paycheck, and you’re confused as to how to manage it. Just follow these tips below closely, and you get to manage your paychecks effectively. Earning your first paycheck can make you have that feeling of achievement. After all, the struggles of job hunting are over, and now, you have a job that can foot your bills. But human wants are endless, and developing the right management strategy can help you manage your resources.

  • Putting up a direct deposit account: This allows for easy access to your money. It is a straightforward method to getting paid quickly. Opening a direct deposit account ensures that the money earned is very safe and cannot be lost.

  • Establishing a monthly budget: We all have a lot of things to spend money on, and if a budget is not created on time, an individual may spend extravagantly. Setting up a monthly budget prevents extravagant spending. In that regard, you are cautioned to only spend money on things that are necessary and important.

  • Saving for retirement: This might seem like it’s too early for that. Well, it is early, but the earlier, the better. Many Americans retire, and when they retire, they end up with nothing to fall back on. It is better to start saving for retirement now than later. Early savings for retirement also gives time for your savings to accumulate a lot of interest over time. Therefore, the earlier, the better.
Why Do Employers Hold The First Paycheck?

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