1. Paying the Employee

2. Everyday concerns for payroll
How often employees must be paid
How soon they must be paid after performing services for the employer
How soon employees must be paid after termination of employment
What methods can be used to pay employees
What information regarding wages and deductions must be provided on payday
What employers must do with unclaimed checks
What to do with wages due an employee when the employee dies
What happens when the calendar creates an extra payday for the employer during the year

3. Pay Frequency Not regulated by FLSA Regulated by state law
Minimum pay frequencies
Lag time between services performed and pay day
Colorado minimum pay frequency requirement is monthly or every 30 days, whichever is longer
Colorado allowable lag time before payday is 10 days after the end of the pay period

4. Payment on Termination
Regulated by state laws that guarantee employees receive all wages they have earned as of their last day of employment
Involuntary termination versus voluntary termination
Colorado involuntary termination requirement is immediately or within 6 hours of payroll department becoming operational (by mail upon request); next day if payroll is offsite
Colorado voluntary termination requirement is next regular payday

5. Payment Method – Cash / Check
Regulated by state laws
Most states require employees to be able to cash their paycheck without charge
Most states require the financial institution (bank check drawn on) to be in the state where the check is to be cashed

6. Payment Method – Direct Deposit
A type of electronic funds transfer (EFT) allowing employers to deposit employees’ pay directly into their designated back accounts
Direct deposit eliminates:
Lost or stolen checks
Unclaimed or uncashed checks
Employee time off to cash checks
Storage of cashed checks and related documents
Early preparation of vacation checks
Employee authorization must be in writing to allow debit entries (correcting entries) against the employee’s bank account

7. Payment Method – Direct Deposit1
Employees Authorize Employer
Pay Statement available on pay day 5
ODFI pulls money from employers bank account 2
ODFI receives ACH file from employer
Money posts to employee bank accounts 4
RDFI receives ACH file from ACH Network
ODFI send ACH file to ACH Network 3

8. Payment Method – Direct Deposit
Prenotification
Involves sending a zero dollar amount through the ACH Network as a test before the first actual direct deposit occurs.
Optional, but needs to occur at least 3 banking days before the first actual direct deposit
Be careful of state laws
Colorado requires the employee to authorize the direct deposit
Colorado requires the employee to not incur additional fees do to having direct deposit
Colorado requires that the employee be allowed to choose the financial institution to hold their account

9. Payment Method – Electronic Paycards
Option for ‘unbanked’ or ‘underbanked’ employees
Used in place of cash, checks, or direct deposit
Works similar to a debit cards
Pre-funded, host-based cards
Net pay accessible at ATM or bank
Use for point-of-sale purchases by card holder
Either branded or non-branded cards are available
Employer funds same as direct deposit
Cannot be the only payment method for employees

10. Pay Statements provided to employees
Information required on pay statements is regulated by each state
Colorado requirements:
Gross and net earnings
Deductions
Pay period dates
Employee’s name or social security number
Employer’s name and address

11. Unclaimed Paychecks
State laws governing abandoned property are known as “escheat” laws
Abandoned property becomes the property of the state
States require employers to contact employees in an attempt to reissue funds to employee
Employers are required to file annual reports with the employee’s state of residence with all abandoned property the employer holding
Colorado considers the unclaimed wages abandoned after 1 year from date of issuance on the face of the check

12. Wages owed deceased employees
State laws regulate:
Who the wages may be paid to
How much may be paid before administration of the deceased employee’s estate
What conditions may be met before payment can be made
Colorado regulations:
Maximum Payable: all unpaid wages and compensation due
To Whom: personal representative if already appointed; if not surviving spouse or next legal heir
Conditions: affidavit showing claimant’s relationship to deceased

13. Extra paydays caused by the calendar
Effects payroll paid weekly or biweekly
Employers may reduce salaried employees’ pay for each period in year faced with an extra pay period
Employers must plan at the beginning of the year how to handle the extra payday
Days of the week that occur 53 times in the calendar years
2018
Monday
2019
Tuesday
2020
Wednesday, Thursday
2021
Friday
2022
Saturday

14. DO YOU KNOW??? What law covers unclaimed checks?
What are the steps involved in establishing an EFT?
What is pre-notification?
What is a branded paycard
What are ODFI and RDFI?
Name some of the benefits for employers in paying employees with direct deposit?