Why Do Employers Hold The First Paycheck? The Answer Here (2023)
You’ve started your new job, and now you thought payday was today. So why didn’t you receive your paycheck? They might have told you that they are holding your first paycheck. Why does a company do this? In this short guide, we’ll go through why companies aren’t paying you for the first partial pay period and when you should expect your paycheck.
Why You Aren’t Getting Paid Yet
Companies pay all of their employees on the same pay period. This is how their “payroll” department works. A certain lump sum of payment is processed through the payroll system for the allotted periods that the company pays out. Some companies will pay in 52-week periods, meaning bi-weekly. Some companies pay every week. It all depends on what they told you during your orientation (this should have been told you to by the HR department. If it was not, you need to contact them and ask).
When you are hired, you are most likely not going to start on the very first day of the pay period. Meaning if everyone is paid bi-weekly, you most likely will not start your first day on the very first day after everyone has been paid. This is called a pay period. Because of this, you essentially have a partial pay period. Where you only have potentially one week or one day of work.
The most important thing to note is that you *will* be paid for the days you are working. But it may simply be on the following pay period. Meaning that you may have to wait 2 1/2 weeks versus only 2 weeks to receive your first paycheck. The reason for this is simply because you missed the date on which the payroll system transferred and allocated money; it’s quite simple. Though, it can be inconvenient to you.
Be sure to speak with your HR department regarding when your next payday will be if you have any questions. It is your right to ask this question, and it will not make you look unprofessional or greedy. It will make you appear responsible, and they will answer with empathy.
How Much Will Go Into The Next Paycheck
If you missed the first pay period, what will be inside your next paycheck will be previous pay period days, plus the current pay period days, minus any deductions that you may have had that you issued on your W-4 tax form. This would be the claims that you made on dependents and other tax exemptions.
How Will I Receive My Paycheck
You should have been “onboarded” (or have gone through employee orientation, in other words) by your HR department. This is the process by which the HR department walks you through your employee benefits, files your W-4 form with the federal government, and asks for your preferred method of payment. Most times, the preferred method of payment is direct deposit. Direct deposit is much like it sounds; on the date of which you’ll be paid, you will receive the payment directly into the bank account you set up with the HR department. This would be the bank account that you provided the account number and routing number for.
If you are unclear on what the payment method is, then you need to contact the HR department or the leadership team as this is a violation of your employee rights.
They’re “holding my first paycheck”
If you feel as though you are being told that the employer is holding your first paycheck, you need to be sure you promptly and professionally ask them for clarification. Employers cannot “hold” your paycheck for any reason. Though there is information available online that indicates that employers hold first paychecks because they need “float capital” or some other borrowing method, this is not true, and it is illegal. Those would be scarce circumstances where an employer held your paycheck instead of the business receiving a reward for doing so. If you feel this is the case, you need to clarify with your employer and mention that withholding paychecks are against the law.
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