Sticking to a regular pay period eliminates many a laundry list of problems. Here is more detail about why on-time payroll matters.
If you want to grow and sustain your small business, employees are an essential part of this equation. An employee’s income affects how secure they feel—the hourly wage or salary influences where they choose to work. However, not paying your employees on time can influence and harm how they perceive your company. If employees don’t feel confident that they’ll be paid on time, this can affect their productivity. As a result, this impacts your business performance. Not paying your employees on time can also have legal repercussions, including penalties, fines, and a strained employer-employee relationship. Therefore, sticking to a regular pay period eliminates many of these problems. Here is more detail about why on-time payroll matters.
Biweekly Payroll is A Law
According to The People’s Law Library of Maryland, “employers in Maryland must pay their employees every two weeks or twice a month.” If there is a missed paycheck, there are procedures to resolve this. Employees might file a claim with their state employment agency. As a result, the small business would be investigated. Then, the business owner would have to pay the money they owe their employee but might also have to pay fines and penalties.
There isn’t a federal law mandating that you pay your employees regularly. However, you must adhere to a regular payday schedule and not fluctuate it arbitrarily. You can change your payroll schedule. However, it would help if you did so for a legitimate reason. It also shouldn’t interfere with overtime pay or the federal minimum wage.
As soon as you can, it would help if you looked at your business model to see where you can cut costs to ensure that on-time payroll happens. Remember that your employees are the backbone of your business, and you should do everything in your power to ensure fair compensation for their work.
On-time Payroll Ensures a Higher Productivity Rate
Every worker’s livelihood depends on having a steady income. If you don’t pay your best employees consistently, you risk losing the people that help your small business thrive. Also, you don’t want the US Department of Labor (DOL) to get involved in enforcing state-specific labor laws. The DOS administers federal labor laws to ensure employees have rights to fair, safe, and healthy working conditions.
Every chance you get, you want to ensure that employees see how much you value their contributions to the workplace and that you want them to stay with your company. When an employee’s salary is predictable and feels secure working at a company long-term, they can put their energy into work. They won’t have to worry about if they’ll be able to pay their rent, mortgage, or other bills on time. As a result, they’ll focus more at work and be more productive.
Save on Hiring Costs
If you have a high turnover rate because employees aren’t happy about their pay, you’ll have to keep hiring people to replace the team members who leave. In 2022, City Biz ranked Maryland as the tenth most expensive state to hire a new employee, costing an employer $16,942 annually! Then, there are other costs to keep in mind, including the following:
- New employees won’t be as productive as tenured employees for months or even an entire year
- There are onboarding expenses
- High turnover rates affect a company’s culture
- You have to pay for job advertisement costs and spend a lot of time interviewing
How to Handle it When On-Time Payroll Isn’t an Option
Businesses go through ups and downs. If paying your employees on time isn’t always possible, we suggest reducing your workforce to the minimum necessary to continue operations or rethink your hiring process. Also, if your entire payroll process needs a revamp, Malden Solutions is here to help. We have affordable payroll services to benefit any business. Well-trained freelancers and independent contractors can be highly productive, and you can pay them by the hour if you don’t want to worry about biweekly pay.
Partner with Malden Solutions Today
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.