Pay Schedule

MagmadragoonMagmadragoon Member Posts: 172 ■■■□□□□□□□
Has anyone been in a position that had a weird pay schedule? I just moved on to a new role at a new company through a recruiter. I just received my first paycheck from three weeks of work and only received pay for three days from last month. I checked my pay stub this morning and they pay only 15 days back for a 15 and 30 pay schedule. So I started May 27th and only got paid for the 27th, 28th, and 29th. On my paycheck their pay schedule is May 15 - May 31. So my next paycheck on the June 30th will only be from June 1 - June 15.

Comments

  • philz1982philz1982 Member Posts: 978
    That is called AP extension my friend! If I understand your description right, they are having you ride out 15 days in which they do not have to distribute you cash. We do it all the time in bigger companies to suppliers. We will let an AP ideally go for 90 days, meaning we will have someone do the work and not distribute funds for 90 days. That means that we essentially get to collect interest on AP funds for 90 days while the worker is essentially taking a hit on their Trade working capital for 90 days and paying interest on any borrowed costs.

    Now, your situation is not a bad thing, as long as they don't miss payments. I just haven't seen it that blatant before. It could be their contracts pay AP 45/60 and they are delaying your pay to keep cashflow good.
  • TheFORCETheFORCE Senior Member Member Posts: 2,298 ■■■■■■■■□□
    @=Magmadragoon

    That's not a weird pay schedule at all.
    The company you work for pays their employees bi-monthly. On the 15th and 30th of every month. As you say, your first day was on May 27th. So from the pay period of May 15th - May 31st you only worked 3 days. The pay stub shows the pay period for which you are getting paid for, that doesnt mean they will pay you for days you were not employed there, thus you only gettinf paid for the days worked during the May pay period. You will get paid your regular salary on June 15th which is today. Not really complicated.
  • TheProfTheProf Users Awaiting Email Confirmation Posts: 331 ■■■■□□□□□□
    ^^ what TheFORCE said.

    But in general, if you have any questions, just ask your HR/AP department for the breakdown of your first pay, I know sometimes it can be confusing.
  • VinnyCiscoVinnyCisco Member Posts: 176
    It is normal. Depends on the company. I was paid in that fashion when I was in the military years ago, and at Bank of America in NY.
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  • soccarplayer29soccarplayer29 CISSP, CISA, PMP Member Posts: 230 ■■■□□□□□□□
    I think I'm reading this differently then other people. Here's my understanding:
    • He worked May 27th-29th and June 1st-15th
    • His first paycheck occurred June 15th and just covered the period from May 15-May 30 (prorated for his 3 days of work)
    • His next paycheck will be June 30th and cover the time period June 1-15th
    It's a bit odd, but once he gets his next paycheck he'll be on a schedule but for the first few weeks that's a bit of a pay lull. On the flip side you'll be getting paid after you quit for an extra cycle.
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  • Mike-MikeMike-Mike Member Posts: 1,860
    I used to have a job where I got paid on the 15th and the 30th. Weird at first, but it made it easy to budget. Just call whoever sends you bills and get their due dates scheduled right around those dates. Always got money for the bills.
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  • MagmadragoonMagmadragoon Member Posts: 172 ■■■□□□□□□□
    It just seems weird to me probably because I am used to getting paid biweekly.
  • apr911apr911 Member Posts: 380 ■■■■□□□□□□
    What they're doing isnt that unusual. Its call payment in arrears. Nearly all companies do it... Most companies do 1 or 2 weeks in arrears, its far less common for companies to not have some payment in arrears or for them to go beyond 2 weeks in arrears unless they only do payroll once monthly but it does happen.

    Here are the examples of arrears (assuming the first day of work is a Monday and the first day of the month with pay is issued on a Friday) :
    You get paid on the 5th for the work completed on the 1st through the 5th - 0 weeks in arrears.
    You get paid on the 12th for the work completed on the 1st through the 5th - 1 week in arrears.
    You get paid on the 19th for the work completed on the 1st through the 5th - 2 weeks in arrears.
    You get paid on the 26th for the work completed on the 1st through the 5th - 3 weeks in arrears.
    You get paid on the last/first day of the month for work completed on the 1st through the 5th - ~4 weeks in arrears.
    And so on... I've seen pay checks issued monthly hence why I stopped at the last/first day of the month (or shift it forward 2 weeks if the pay is issued on the 15th) but I have heard of paychecks issued every other month or quarterly or even longer, though I've never actually witnessed it. I dont think I'd be able to handle the budgeting involved in a quarterly paycheck but if I found myself in that situation, I guess I would figure it out.

    Typically an hourly position will never be paid 0 weeks in arrears. It takes time to take the hours worked and enter it into the payroll system and cut the check. Therefore an hourly position is almost always paid 1+weeks in arrears where the additional period in arrears is based on the frequency of the paycheck (i.e. paid weekly = 1 week in arrears, paid bi-weekly = 1-2 weeks in arrears). I dont think I've ever worked for a company that has paid hourly workers on a period less frequently than bi-weekly.

    Salaried positions on the other hand can run the gamut. Your pay is predictable so there isn't a technical accounting need for them to pay in arrears but the period between paychecks can run longer... I've worked jobs where I've been paid bi-weekly and received pay 0 and 1 week in arrears but far more common is to be paid by weekly and be paid 1 and 2 weeks in arrears. My current position pays biweekly but is 2 and 3 weeks in arrears which was quite a change and a bit confusing at first to me as well since I went from a company paying 0+1 to one paying 2+3. As I said, 1+2 is by far the most common in-arrears arrangement, it works best from the accounting perspective since it allows sick/vacation days to be filed after the fact with minimal fuss (on the accounting side) and since many companies employee hourly workers in addition their salaried workforce, it keeps everyone on the same arrears schedule (which makes it easier for HR to explain and saves them having to have 2 handbooks/policies for salary vs hourly employees).

    Generally, as you get paychecks less frequently, the number of weeks paid in arrears increases at a rate equal to the time between paychecks but it also generally decreases towards 0. For example, people who are paid a salary on a monthly basis are usually issued a paycheck that simultaneously pays 0, 1, 2, 3 and up to 4 weeks in arrears since the 1st day of the month was up to 4 weeks ago and the last day of the month was 0 weeks/days ago. Though its not unheard of for monthly paychecks to be issued on the 15th for the 1st through the last day of the previous month in which case the paycheck is 2, 3, 4, 5 and up to 6 weeks in arrears.

    Since you're getting paid bi-monthly, which for all intents and purposes might as well be bi-weekly (give or take a few days) you're less likely to receive 0 week in arrears payments. Indeed based off your stated payment schedule, it seems you receive 2, 3 and 3.5 weeks in arrears.

    It sucks having to wait upwards of a month and a half to get your first full paycheck (depending on when you start), especially starting out in a job since that's usually when you most need the income coming in, but it also means that when you leave the job, if you leave on a payday, you'll still have 3.5 weeks more salary that you can expect to collect on the next payday (assuming the company doesnt decide to just pay it out in a lump sum on the payday you leave, either way, you still are getting 3.5 weeks more salary since the company is in arrears).

    I dont know of any company that pays in advance... This is likely due to the difficulty of reclaiming any owed wages if you were to leave before the advance period and/or recovering any damages you may have inflicted upon your departure... There is a reason why most companies will not pay out a lump sum of in arrears hours or cash out ETO until the paycheck following the employees departure and it is often to ensure they have a financial recourse if you decide to walk off with company property (or forget to return the company laptop or phone) or inflict minor other damages. Of course if you inflict major damages, they can always take you to court.
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