hold back

[LUCY88]

What is the name of your state (only U.S. law)? VA Our employer wants to start direct deposit for our company. We all would like to have it but, they are wanting a week hold back on pay. Currently we do not have any hold back. Is this legal?

 

[LdiJ]

What is the name of your state (only U.S. law)? VA Our employer wants to start direct deposit for our company. We all would like to have it but, they are wanting a week hold back on pay. Currently we do not have any hold back. Is this legal?

Define what you mean by a week "hold back"?

Are you saying that you are currently paid on a Friday and that check also includes pay for that day? And now your company wants to change it so that if you get paid on Friday, its for the previous week's work?

If the above is true I understand why your employer wants to change things. It is more normal to have a holdback period, which allows for greater accuracy and time to correct errors...particularly if money is being directly deposited.

If the above is not accurate, again, please define what you mean.

 

[LUCY88]

You are almost correct, our pay week ends on Thursday morning and they do payroll then and we get the check on Friday. We are being told from other employees that it is against the law for them to hold our pay. Is that true? The company is saying that the reason for the hold back is to have more time with the payroll(as you stated) and that they have to send it in by Wednesday the latest to get it into direct deposit.

 

[swalsh411]

What you're talking about is paying "in arrears" and it is very common and entirely legal. In fact the current arragenement you have now (being paid the day after your pay period ends) is not the norm. It sounds like they want to pay about a week in arrears which is legal in Virginia.

According to the 2011 American Payroll Association "Payroll Source" book (which is considered to be the Bible in the payroll world), Virginia has no provisions on the lag time between the end of the pay period and pay date. In reality, the most an employer could reasonably make it would be two weeks. Any longer than that and your employees would really start to complain. Their plan to pay a week in arrears is legal and your coworkers don't know what they are talking about.

 

[LUCY88]

Holdback

Thank-you for the information. They normally never do know what they are talking about, this is why I like to get my own information. Thanks again!!

 

[cbg]

You can tell your co-workers that while it is technically correct that an employer may not "hold your pay", the policy that is being implemented in no way would be considered "holding pay"' under the law; is entirely legal in all 50 states; and that if they attempt to take any legal action on the basis that their pay is being held under the policy you describe they will quite certainly lose.

My state is arguably the one that requires the shortest period of time between the end of the pay period and the issuance of the paycheck, and even in my state the employer could take five days longer than your employer is planning to take and still be legal. In your state the idea that pay being issued the day after the end of the pay period being "held pay" is, in fact, quite laughable.

"Held pay" would be more along the lines of a month or two, not a single day.

Good for you for checking independently!