Review Pay Frequency Laws in States Where You Have Employees
While certain states allow employees to be paid monthly, other states require semi-monthly, bi-weekly, or even weekly payment.
Federal law does not address how often or when wages must be paid to employees. However, most states have pay frequency laws detailing how often and when wages must be paid. Some states have different pay frequency requirements based on industry or exempt status. While certain states allow employees to be paid monthly, other states require semi-monthly, bi-weekly, or even weekly payment. We highlight some of the unique laws below. A general overview of pay frequency and pay timing requirements by state is available here (PDF).
New York's Weekly Pay Requirement for Manual Workers and Railroad Workers
Since at least 1890, New York requires employers to pay "manual workers" on a weekly basis no later than seven calendar days after the workweek where wages were earned. New York Labor Code § 194 defines a "manual worker" to mean "a mechanic, workingman or laborer."
The New York Department of Labor provides the following guidance on the meaning of "manual worker":
"It has been the long-standing interpretation of this Department that individuals who spend more than 25% of working time engaged in "physical labor" fit within the meaning of the term "manual worker." Furthermore, the term "physical labor" has been interpreted broadly to include countless physical tasks performed by employees."
Class action litigation regarding this weekly pay requirement rapidly increased after a 2019 New York case (Vega v. CM & Assoc. Constr. Mgt.) that held employees may sue employers over late wages (paid less frequently than weekly), even if they were fully paid, and can recover liquidated damages in the full amount of delayed wages. Another New York court decision in 2024 (Grant v. Global Aircraft Dispatch, Inc.) declined to follow this decision and the New York Governor proposed amending the law so that liquidated damages are not available in pay frequency claims where a manual worker is paid at least semi-monthly. However, for now, New York employers with manual workers are at risk of costly class actions if they do not comply with the weekly pay requirement.
New York also requires railroad employees be paid on or before Thursday of each week for wages earned during the seven-day period ending on the Tuesday of the preceding week.
California Specifies the Days When Wages Must be Paid
California requires wages to be paid twice a month. Work performed between the 1st and the 15th days of any calendar month must be paid between the 16th and the 26th day of the month during which work was performed. Work performed between the 16th and the last day of a month must be paid between the 1st and the 10th day of the following month.
Employers paying employees weekly, bi-weekly, or semi-monthly are in compliance, so long as those employees are paid not more than seven calendar days following the end of the payroll period.
Pay for overtime hours may be paid in the payday for the pay period following the period in which it was earned.
Employers who fail to comply with California's pay frequency law are at risk of claims from employees, including Private Attorneys General Act (PAGA) class actions.
Rhode Island and Vermont Require Weekly Pay
Rhode Island requires all employees to be paid weekly, absent limited exceptions. However, employers may file a written petition with the Rhode Island Department of Labor and Training to request an exception to the weekly pay requirement which, if granted, could allow an employer to pay no less than semi-monthly.
Vermont similarly requires employees to be paid each week. Employers may pay bi-weekly or semi-monthly if they provide written notice to employees and if employees are paid on a pay date not more than six days from the end of the pay period.
Recommendations
Employers should review the pay frequency laws in all states where they have employees to determine whether they are in compliance.
ADP Compliance Resources
ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefits administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington Web page located at www.adp.com/regulatorynews.
ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.
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Updated on December 5, 2024
