In the workforce, not all holidays receive equal treatment. While most companies are free to create their holiday schedules - there are some guidelines we all have to abide by. The most important rule is that on some holidays, it is virtually impossible for your employees to get paid. Pretty big deal, right? Avoid payday mistakes in 2020 with our tips for navigating Bank holidays.
What are Bank holidays?
Bank holidays are business days when the Federal Reserve closes to observe a public holiday. This procedure means banks and financial institutes follow suit and close their doors for business too. Nothing too complicated, but the tricky part is keeping track of what day of the week they fall on each year.
2020 U.S. Bank Holidays
|New Years Day||Wednesday, January 1|
|Martin Luther King Jr. Day||Monday, January 20|
|Washington's Birthday/Presidents Day||Monday, February 17|
|Memorial Day||Monday, May 25|
|Independence Day||Saturday, July 4|
|Labor Day||Monday, September 7|
|Columbus Day||Monday, October 10|
|Veterans Day||Wednesday, November 11|
|Thanksgiving Day||Thursday, November 26|
|Christmas Day||Friday, December 25|
How do Bank holidays affect payroll?
Bank holidays put normal banking activities on hold while institutions close for business. What this means for employers and HR professionals is that payroll cannot be processed, and regular pay schedules might need altering.
What happens if payday falls on a Bank holiday?
When a payday falls on a Bank holiday, your payroll processing schedule will have to change for the time being. If you end up in this situation, there are a few different options you have for adapting your schedule:
Run payroll early: Elect to pay your employees the day before the holiday.
Delay payroll: Push your pay date to the day after the holiday.
Run as usual: Run your payroll as usual, and your employees will receive paychecks within the next business days following the holiday.
How to prepare for bank holidays?
Set expectations: Let your employees know in advance of any changes to your regular pay schedule. Setting the expectation upfront allows employees to plan accordingly, especially if you plan to delay payday.
Stay consistent: It's always best to stay on a regular schedule when it comes to compensation. Not only does it earn employees' trust and provide peace of mind- it eliminates additional guesswork for you too.
Schedule reminders: Make sure you have reminders put in place for upcoming bank holidays, so you don't miss a beat. Allow yourself enough time to gently remind employees of any payday changes and notify your payroll provider if you need to edit your pay schedule.