What is the best way to transition to payroll in arrears?
The primary benefit of paying payroll in arrears is so that you do not have to estimate their time for that payroll and then adjust actuals to the original estimate on the following payroll. That process of reconciling estimates to actuals will consume valuable time that should be spent focusing on other business matters that actually add value.
Unfortunately, there is no good way to make this transition. Employees do not like change, especially payroll changes. Good communications is essential. Providing that there are no legal or contractual constraints, there are a two of basic options for semi-weekly payroll frequencies:
1. On the next schedule payroll date, only pay them for one week instead of two weeks. Thereafter, the payrolls go back to covering two weeks of pay.
2. Push the next scheduled payroll date forward a week. Then every two weeks, thereafter.
Again, communicate any payroll changes far in advance so that employees can plan for the change. For those employees who complain, consider offering them a payroll advance to help with the transition. In the long run, this is a process improvement that will eliminate non-value added administrative time.
As a payroll service provider, we often see this issue with new clients and help them implement this process improvement.
Use Kenneth Jarvis PLLC to handle your accounting, payroll, and tax needs today. Limited availability for new clients. Call to request a meet-and-greet (941-907-9188). Conveniently located near SR 70 & I-75.