How Do Payroll Weeks Work?

The Fair Labor Standards Act (FLSA) is a federal act administered by the U.S. Department of Labor that directs many aspects of employment practices, including the duration of a payroll week and how employees are paid. Employers have considerable discretion in selecting time periods for paying employees, but compliance with FLSA rules is mandatory. Not all employees are covered by FLSA rules, but payroll weeks must be consistent and applied fairly to all employees.

The FLSA defines a workweek as 24 hours a day for seven consecutive days – 168 hours. Employers may choose any day of the week and any time of day to start a workweek. For example, a workweek that starts at 8:00 a.m. on a Monday ends at 7:59 a.m. on the following Monday. Using a workweek as a basis for determining pay periods is the simplest method for payroll processing. Employers can pay on a weekly basis, or a biweekly basis, meaning every two weeks. Semimonthly and monthly pay periods are also used, but even though a pay period overlaps a defined workweek, FLSA rules for overtime based on working more than 40 hours in a workweek still apply, making payroll processing potentially tricky.

There is no federal mandate for how employers track the hours worked by employees. The FLSA merely requires that timekeeping records are kept for two years. Employers can choose paper, electronic or time-tracking machines for reporting time, and they can require employees to report their own time or have management log their time. Employers can set increments of time for reporting, such as counting each minute or rounding up or down to the nearest chosen increment of time, such as quarter hours. Employers generally set a deadline for submitting timekeeping records based on the payroll periods used. Submitting time once a week works well for processing both weekly and biweekly payrolls, but submitting time biweekly, semimonthly or monthly for the corresponding pay periods is also acceptable.

Payday is based on the pay period and takes into account the time needed to collect time records, enter information into the payroll system and process paychecks. Employees are typically paid in arrears, which means that if a payroll week ends on a Sunday, employees may be paid on the following Friday or some other future day. The date of payday must be consistent and communicated to employees. It’s reasonable for the payday of a semimonthly or monthly pay period to fall a certain number of business days after the end of the pay period to account and adjust for paydays that may fall on a weekend.

While the format of timekeeping records is up to employers, some information is required, such as the hours worked each day in a payroll week, the duration of the period, pay rate and overtime hours. Payroll records must be kept for a minimum of three years and securely stored. The Wage and Hour Division of the U.S. Department of Labor can request an inspection of all payroll and timekeeping records in the case of a dispute or claim against an employer.