Practically everyone in the workforce knows that there are state and federal laws that require most employers to give their workers not only a pre-set minimum wage, but also extra pay or compensation for overtime work they perform. The Fair Labor Standards Act (FLSA) is the leading federal law on wages and overtime.

What you may not know is that these same laws cover more than how much workers have to be paid, but also when they have to be paid. It's a good idea for employers and employees alike to understand some of the rules that control when wages and overtime have to be paid.

Some Basics

Employers are generally required to pay their employees in cash or by a "negotiable instrument," such as a check. So, you can't be paid in "tokens" or "IOU" vouchers. Also, wages aren't considered paid by the employer and received by you unless they are paid finally and unconditionally, or "free and clear." So, your employer violates the FLSA if you're forced to "kick-back" all or part of your wages to your employer (or a supervisor or any other person acting on behalf of the employer).

Many states have "wage payment laws" that are similar to the FLSA and control when and how wages have to be paid. Many state laws also cover the time and manner of payment when an employee quits or is terminated. So, the laws in your area may have rules on how much time your employer has to give you your last paycheck, or if it has to pay you for unused vacation time.

You and your employer can, however, agree about a period of time and manner for paying wages. For example, you can agree to get paid in shares of stock or even room and board. However, you have to be paid at least as often as the law requires. The FLSA doesn't tell employers how often you have to be paid. Your state laws, may, however. For instance, in Ohio you have to be paid at least on a semi-monthly basis, on or before the 1st and 15th day of each month. But, you and your employer are free to agree on weekly or daily payments.

Time of Payment

While there's nothing in the FLSA that says a pay period has to be one week only or that employees must be paid weekly, it requires that that the minimum wage and overtime payments be paid "promptly." Generally that means as soon as possible after the end of a pay period. There are some exceptions, though. An employer doesn't violate the prompt payment requirement if it changes the pay schedule and the change :

  • Is made for a legitimate business reason, like a change in accounting methods
  • Doesn't cause an unreasonable delay in payment
  • Is intended to be permanent
  • Doesn't help the employer get around or avoid the FLSA's minimum wage or overtime requirements

Time for Payment of Overtime Wages

Generally, overtime pay that's earned in a particular workweek must be paid on the regular payday for the period in which that workweek ends. So, if you get paid every two weeks, any overtime pay you've earned has to be included in the paycheck that covers the two-week period in which you earned it. In other words, your employer generally can't let overtime pay accumulate and then pay it to you in "bulk" or all at once, say after two or three months, for example.

If the correct amount of overtime pay can't be determined until some time after the regular pay period, however, the employer won't violate the FLSA if it pays you the overtime compensation as soon as possible. But, payment can't be delayed for a period longer than is reasonably necessary for the employer to calculate and arrange for payment of the amount due. And, under no circumstances, can it delay payment beyond the next payday after the calculation is possible.

For example, say you're regularly paid on the 1st and 15th of each month, and you earned overtime in the last two days of the pay period that ended on the 15th. Your paycheck on the 15th didn't include the overtime because employer didn't have enough time to calculate it before the payroll checks were issued. You must be paid the overtime on your check for the 1st of the next month because your employer can calculate the amount due by that date and arrange for its payment.

Questions for Your Attorney

  • My employer wants to pay me on a daily basis, and in cash. Can it do that? Is there any reason why I wouldn't want to be paid this way?
  • If my state permits bi-monthly wage payments, do I have to be paid on certain dates of the month?
  • How can I be sure that my employer is following the state law regarding my wage payments?

Tagged as: Labor and Employment, Wage and Hour Law, wage time, time payment