In a company that is switching from semi-monthly to bi-weekly payroll (good news), there is the transition period that is tricky.
- The last paycheck under the old payroll is on Dec 31 covering pay period Dec 15 - Dec 31.
- The next paycheck under a new payroll comes on Jan 11, and covers a pay period from Dec 24 through Jan 6. So, there is an overlap.
In this new Jan 6 paycheck, employees are paid only for the dates Jan 1 - Jan 6 (since the rest has been paid in the previous paycheck).
However, the healthcare benes deductions are full 2-week amount. The rationale given is that annual benefits are divided by the amount of pay periods in a year and deducted from each paycheck.
I'm not quite getting the math here, and my impression is that healthcare benes deductions should be pro-rated and deducted only for a part of the pay period (Jan 1-6). Am I wrong in my assumptions?
(There is a plan in place to help folks balance their financial commitments during the transition period. It is fair. I am only curious about the logic of misaligned pay and healthcare)