1. Pay Periods Policy
This policy informs your employees when they should expect to be paid. You may choose to combine this policy with other policies addressing payroll issues, such as the ones discussed below.
In some states, employers are required by law to pay employees at least twice each month. Under many state laws, employers are generally not permitted to withhold the final check of an employee who is leaving employment. Even if an employee has failed to return materials, equipment, or fees, the final paycheck generally cannot be withheld. Additionally, some states allow employers to mandate that employees receive payroll by direct deposit. Other states make direct deposit a voluntary option that requires employee consent.
Before doing any of the following things, check with a locally licensed attorney to verify that it’s a permissible practice: Paying employees less often than twice a month, deducting anything from a final paycheck, refusing to give an employee a paycheck, or mandating direct deposit of paychecks.
2. Payroll Time Sheets Policy
While this policy is not required, we recommend that it be included. The policy should address the difference between employees who are classified as exempt from requirements of the Fair Labor Standards Act (FLSA) and those who are classified as non-exempt.
3. Payroll Deductions Policy
This policy explains the reasons for various payroll deductions, as required by law.
On each payday, you will receive a pay stub or electronic pay statement reflecting the pay earned the two weeks before the payroll week. Payday is normally every other Friday of the month. (Name of organization) directly deposits employees’ paychecks into their designated personal accounts, if elected by the employee.
All employees are responsible for completing time sheets. Time sheets will be submitted biweekly.* Your time sheet should be completed accurately and submitted to your supervisor for approval.
[*Note: Include a sentence explaining how time sheets are submitted, such as paper time cards, time-tracking apps, or a digital HR portal.]
Non-exempt employees should report all time worked. Time sheets should also indicate all vacation, sick, or other time away from the office. If your position is classified as non-exempt, you are eligible for overtime pay. Overtime must be approved in advance by your supervisor. Sick and vacation time incurred by non-exempt employees may be taken in 15-minute increments.
Exempt employees should record only absences from work, not actual number of hours worked in a pay period. If your position is classified as exempt, you are not eligible for overtime. Sick and vacation time must be taken in a minimum of one-hour increments.
(Name of organization) is required by law to make regular deductions for taxes imposed by governmental units. These deductions must be made from all paychecks, and the amounts deducted are turned over directly to the applicable governmental units.
Some paycheck deductions based on a court order may need to be made, such as garnishments or child support.
Additionally, this organization will make certain deductions from your paychecks as you request.
Under the Social Security Act, your yearly taxable earnings are reported to the Social Security Board, and your benefits are computed upon them. This organization is required to deduct the tax on your salary. The amount deducted is sent to the federal government for credit to your account. The act provides a monthly income for workers and their families when the worker is retired or disabled and for certain payments to survivors in case of death.
By January 31 of each year, this organization will provide a W-2 statement showing the total amount of your taxable earnings, as well as all deductions taken from your pay during the previous year.
If you believe that a payroll deduction has been taken that violates applicable law, you should immediately report that belief in writing to human resources or your supervisor.
This is a sample handbook policy only. Your organization is responsible for compliance with all applicable laws. Accordingly, this document should not be used or adopted by your organization without first being reviewed and approved by a licensed attorney in your area.
This sample policy is published with permission from Working Together—A Guide to Employment Practices for Christian Employers.
© 2022 Brotherhood Mutual Insurance Company. All rights reserved. www.brotherhoodmutual.com/working-together. Updated 9/2021.