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My employer just announced that they're switching from paying us every two weeks to paying us every 4 weeks, as it will save them money on accounting. Though I don't live paycheck-to-paycheck, this is incredibly inconvenient and annoying. Some of my coworkers do live paycheck-to-paycheck and are really worried about not being able to pay rent or bills on time.

I'm not sure how to calculate it exactly, but I also know that I'll be losing some small amount of money from this change, as my bank pays 1.8% interest compounded daily, and 401K distributions will also be delayed so growth will be slowed.

My department is around 15 people, and we're thinking of going to our manager and asking for a collective 1% raise to cover this loss + inconvenience. Is this a reasonable ask?

My hope is that we'll ask and they'll decide it's cheaper to just keep it biweekly and go back to normal.

  • Comments are not for extended discussion; this conversation has been moved to chat. – Mister Positive Dec 6 '19 at 16:38
  • Does your current contact state the bi-weekly payment terms? – Daniel Dec 6 '19 at 17:38
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    Do they pay in advance or in arrears? What they're essentially asking for is a short-term loan from their employees. Loans usually come with interest. If they don't acknowledge and recognize the hardship they're causing, then raise or no, time to go. – Wesley Long Dec 6 '19 at 20:45
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I'm not sure how to calculate it exactly, but I also know that I'll be losing some small amount of money from this change, as my bank pays 1.8% interest compounded daily

(I wanted to make sure I answered this part of your question, since "Is it reasonable to ask" is just based on opinions, and might result in the question being closed. Hopefully this part helps keep the question open.)

Obviously it depends on how much of your check you deposit and how much of it stays in the bank.

For example, for every $1000 you put in your bank, you would lose about $0.69 interest over the missing 2 weeks. That's assuming you put in the entire $1000 and don't take any of it out.

see: https://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php?given_data=find_A&P=1000&R=1.8&n=365&t=0.0384615384615385&given_data_last=find_A&action=solve

My department is around 15 people, and we're thinking of going to our manager and asking for a collective 1% raise to cover this loss + inconvenience. Is this a reasonable ask?

It doesn't seem reasonable to me. A 1% raise would certainly be more than you would lose by this one-time change. And of course a raise is permanent where any loss from this change is only one time. But you can always ask and see what they say.

Maybe you would have better luck asking for a few dollars one-time "bonus" for the inconvenience.

Note: Some of the comments have suggested checking the legality of this change in your state. It seems unlikely that the company would knowingly break the law. But if you do find that it is illegal, don't ask for a 1% raise or a one-time bonus. Instead, ask that the company conform with local laws. And if they don't, contact your state's Department of Labor.

  • The loss is every two weeks, not just once. I do agree it's quite small, though. – Loren Pechtel Dec 10 '19 at 4:58
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The difference in interest between paying bi-weekly and monthly is miniscule, assuming even higher band salaries (60k+) you are looking at, at most, tens of dollars over the year, while the supposed 1% raise would go into 600. Hardly a fair trade-off.

The employees who may struggle with the switch likely can figure it out together with HR/Accounting for a bit of flexibility in the transitional period. And as this is not your fight, don't make it yours.

Taking in all of the above it really is not a reasonable request, and most likely will look like attempting to take advantage of an already stressful situation without any meritorious reason behind how do you deserve the 1%.

  • I would assume that the 1.8% are an annual interest. Presumably paid out monthly but computed on a daily basis. So if you have 1000$ in the account for 20 days, you will receive roughly 0.1% or 1$ interest for that. If OP is not in the US or Europe but say somewhere in South East Asia, 1.8% interest for a checking account is also not that unusual, inflation in the local currency might be much higher. – quarague Dec 6 '19 at 7:50
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    @quarague and that matters how? It comes on the presumption that you actually keep that money in your account, which people generally do not - they have a bill to pay. And when you take that into account, the actual difference in interest is literally few dollars over the year. – Tymoteusz Paul Dec 6 '19 at 13:26
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    The difference due to interest is definitely less than everyone seems to be assuming. If you are making $100k a year, and left the entire amount in the interest bearing account, the proposed change will cost you about $70 at worst (most lucrative interest calculation combined with zero cash flow out of the account). Meanwhile the OP's proposed 1% raise would cost the employer $1,000. The raise is pretty clearly not justifiable purely based on the change in pay schedules causing a loss of interest income. – dwizum Dec 6 '19 at 14:38
  • How is the first paragraph at all useful to a question on the Workplace stack? If the OP was asking for economic advice, that might help. Right now, they just need to know if this is worth fighting for, and how to do so. – Carduus Dec 6 '19 at 15:45
  • @Carduus A good point, it was more related to all the discussion in the comments, thus I've reworked the 1st paragraph. – Tymoteusz Paul Dec 6 '19 at 16:36
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I have had two companies change the frequency of pay, both had issues making the switch, so several things need to be addressed.

Case 1 A company went from getting paid on the last day of the pay period to a week after the end of the pay period. This change did simplify things for everybody. In the old method corrected time cards had to be submitted if you took vacation or sick leave or worked overtime in the last few days of the pay period. The transition did impact some people because there was a one week delay in a check. The company did give employees the option, they could get the final check under the old system to include a one week advance. Then they paid it back to the company over the next 13 checks. This was essentially a 6 month no interest loan.

Case 2 Going from monthly pay to every two weeks. The first attempt wasn't well planned. They announced in November that it would take place in December, but it was noticed that because of the way the pay periods were laid out December pay would be short because the "2nd check" fell in January. That meant that all the careful planning for 401K, insurance premiums, and flexible spending accounts would be messed up. That also messed up people who were running out of vacation days. The company scrambled to halt the change and then re-planned the transition for January the next year. That allowed everybody understand how going from 12 checks to 26 would work.

When going from 2 weeks to 4 weeks you will have an issue that the first gap will be hard for some people. The way to address this is to offer the zero interest loan for those that need it.

One thing that makes this hard for some people is that in someways every four weeks is harder than once a month. With monthly pay you know how your bills will fit in that schedule. With every 4 weeks, you get 13 checks a year, and your bills don't line up.

I wouldn't ask for money for lost interest. I would be asking about how the initial gap is going to impact some people.

  • Worth pointing out you can adjust when the due date of nearly any bill will be. You just have to ask. You of course pay to move a bill normally due on the 15th to the 1st, you pay the same amount, but the first time you will have two smaller expenses. – Donald Dec 6 '19 at 23:05
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    Long, long ago I had a job that paid on the 15th and the last day of the month. I thought it was a good idea as bills are monthly, not 4-weekly. – Loren Pechtel Dec 10 '19 at 5:04
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I'd advise you to brush up your resume and start looking for a new job. This is a money saving move, but at the cost to the average worker. Companies that care about their employees go the other way and pay more frequently, rather than less.

To me it screams of desperation and total lack of regard for the employees.

As far as a cost to you, 1% is reasonable, but they are not going to agree. They are doing this to reduce payroll cost without regard to you or your contemporaries.

  • I too would find this very alarming. As you said, it shows a clear lack of regard for employees. Furthermore, it is a red flag that the company may be struggling financially. – Lumberjack Dec 6 '19 at 14:35
  • "Companies that care about their employees go the other way and pay more frequently, rather than less" I'm not sure I follow. Why is this the case? I know when I moved from bi-weekly to monthy it actually made budgeting easier because my full paycheck was landing at the same time rent/utilities were due. – pip install Monica Dec 6 '19 at 18:04
  • @pipinstallMonica less need to float income. Essentially, you are giving your employer an interest free loan from the time you work until the time you are paid. – Pete B. Dec 6 '19 at 18:51
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    @pipinstallMonica It is certainly a matter of opinion, but the general consensus is that people typically prefer shorter pay periods over longer ones Source – Lumberjack Dec 6 '19 at 19:13
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    @PeteB. People working paycheck to paycheck aren't benefitting from interest in an empty bank account, and a 1% raise doesn't alleviate the issue of needing to have extra cash-on-hand when the change is made. Having to float 2 weeks of pay when the swap is made might be a non-trivial issue for some (but not OP), but I would imagine they'd have more luck with a pitch to management that addresses that issue. A 1% raise doesn't. – pip install Monica Dec 6 '19 at 19:42
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The company perspective

Going from paying twice a month to paying once a month could really deliver significant savings. Many banks levy a flat fee on any commercial transactions. By doing payments once per month they halve the fees they're paying. It also saves a significant of administrative work for your company, and therefore saves money.

Given that the company has much to gain from it, you should assume this is Going To Happen.

However, because it's worth a lot to them, it's also reasonable to ask that they do the implementation in a way that works for everyone. So what can you ask for?


As @Joe Strazzere shows, the amount of money you would lose in compound interest is really really low, and not in proportion to a 1% raise. If you play it like that you will seem both greedy and bad at math.

You say it's "incredibly inconvenient". If you're not living paycheck to paycheck, then it really shouldn't be incredibly inconvenient. Whether you get paid $1000 once a month of $500 twice a month doesn't make much difference if you have a $500 reserve.

Now, the people living paycheck to paycheck, that's a different story. For them, it's important that this chance is rolled out front-loaded: they shouldn't go the first two weeks without getting a paycheck. That's definitely something bring up with your boss.

A specific topic which you could try to negotiate is the date at which wages are paid out. A lot of bills come on predictable dates; find out when rent, utilities, school bills etcetera are typically due for your co-workers, and ask that wage payments are guaranteed to always happen a few days before.

Suppose it's rolled out well, there's still the question of whether those co-workers can manage their personal finances responsibly - if they gain a month's worth of wages, can they keep half of it untouched for half the month? If not, then they have a problem, for which they really should get help. However, managing their personal finances is their own responsibility; not the responsibility of the company.

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No, it’s not reasonable.

How you choose to invest, or whether you do at all, is none of your employer’s business once you get your paycheck. Many employers encourage employees to invest in their 401K, but that’s usually a bit of self-interest. And it’s not mandatory. For all they know, you could cash your check every week.

Plus the fact that you say you’re unable to calculate specifically won’t go over well.

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collective 1% raise to cover this loss

This and only this is the reason for asking for a raise. And it need to be backed up by proof. For example people having biweekly bills and somehow not having an income with certain amount means extra charges or something.
Or that changing payment cycle means being paid AFTER the bills come.

From logicl point of view you are still paid the same amount in 4 weeks as you were just in one lump. So it falls on you to split that amount into parts that you need to pay. It's not your employeer responsibility to pay you in time to pay bills because you cannot be trusted with not spending the gas money on frivolities.

IF you all made a decision to work for that company based mostly on the fact that they pay biweekly THEN changing it is something you need to dispute with your company. Welcome to the unions.

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This change means that exactly half of your salary is paid two weeks later than before. The company can argue that they just did you a favour paying every two weeks and they stop doing you the favour. Let's assume they admit that this change is at your expense.

The interest for half of your salary paid with two weeks delay would be the same as the annual interest on your full salary, divided by two (only half the salary is delayed), divided by 26 (two weeks instead of 52). One percent raise would be fine if you had to pay 52% annual interest. I don't think you pay that much.

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More than reasonable. You should probably ask for 2%

This change could easily force people to use their credit cards or lines of credit substantially. Depending on when bills are due with the credit card companies and when they receive their pay, it could easily cost 2% in interest if they need to carry the balance for a bit. 2% is what it will cost some people in interest charges. If you are going collectively, then ask for what will compensate those who are worst off.

The problem with asking for just 1% (in addition to making your colleagues worse off) is that it may still be cheaper to give you the raise than pay to bi-weekly frequency. Payroll is expensive. I haven’t done much with payroll systems recently, but the last time I had anything to do with one charged $50 a payroll per person per payroll cycle. If you earn less than 120K a year on such a system, it is still cheaper to give you a 1% raise than pay for the extra payroll costs. 60K and under a 2% raise is cheaper.

You also want room to negotiate downward if the boss counters.

Also, check your local labour laws. Paying only once a month is often against the law because of the problems is causes for employee cash flow. If you are American, check your state here:

https://www.patriotsoftware.com/payroll/training/blog/pay-frequency-requirements-state-federal/

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    @JoeStrazzere Arizona and Maine, for example, require employees to be paid at least every 16 days while Minnesota requires transitory employees to be paid at least every 15 days. thebalancesmb.com/how-often-should-i-pay-employees-398728 – Jeremy Holovacs Dec 6 '19 at 0:33
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    @JoeStrazzere add in New York, California, Connecticut, and numerous other states. patriotsoftware.com/payroll/training/blog/…. – Matthew Gaiser Dec 6 '19 at 0:43
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    Asking for a raise as a bargaining chip to stave off a monthly pay isn’t helpful unless the employees have something that means something directly to the employer, where refusing has major consequences. The employer can easily say no to both a raise and continuing biweekly pay...then what? Now the entire team looks bad and they still didn’t get what they want. Any suggestions they should also do to make them actually heard? – morbo Dec 6 '19 at 11:47
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    The information on that linked page is a bit misleading. It says that for my state pay must be at least twice a month (or every two weeks). Having once had a job where I was paid monthly, I did some research; there is an exception for executive, professional, and administrative employees ... which - on the face of it at least - could include almost anyone (granted there could be legal definitions of those terms, but I'm not looking that up). – GreenMatt Dec 6 '19 at 14:03

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