An employment contract can take the form of a traditional written agreement signed and accepted by the employer and employee. The Forbes .com site describes the 10 most important contract types for small and growing companies.
Often, employment agreements are “implicit” in verbal statements or actions taken by parties, described through company memoranda, employee handbooks or policies adopted during employee hiring.
Employees frequently use work contracts to demonstrate limitations on the employer’s right to dismiss them. In some entities (of the United States), for example, employment is considered voluntary, so the employer can dismiss the employee at any time.
Many US entities also recognize that a verbal statement from an employer can create a binding employment contract. For example: “will be here whenever your sales are over budget”.
However, the enforceability of such verbal contracts is limited by a legal doctrine known as the “fraud statute”. This establishes that any verbal agreement that can not be fulfilled in less than one year is not valid; A verbal contract must also be specific. This recruitment generates payment commitments from the employer.
There are different options regarding the frequency of payment of payrolls, each organization selects the most convenient one; the most common is the monthly, semi-monthly, biweekly and weekly payments. The suitability of each of these will depend on the point of view that is analyzed.
Benefits of biweekly payment
From now on, the benefits of assuming a biweekly payment frequency will be reviewed to identify the feasibility of the preference.
Reduction in records management
For companies, a low frequency of payment, that is, more time between one payment and another is more convenient. Because it generates fewer payroll processes and allows financing needs to be programmed, accounting departments usually prefer monthly payrolls to biweekly payrolls.
Companies are required to submit monthly financial reports, therefore, this would be the frequency of natural payment. The monthly payments represent 12 processes of registration in the year for this concept; if they were biweekly payments, there would be 24 processes. Meanwhile, bi-weekly payments would require 26 processes and some adjustments when calculating the different payroll concepts.
Payment simplification process
Benefits for staff are usually expressed in monthly amounts. Using another frequency of payment requires recalculating the assignable part quota in another unit of time, usually days or hours.
A biweekly payroll is easy to process for employees per hour; They are always paid for the same period of time and allows you to make equal payments for these concepts.
For example, one employee per hour works eight hours a day, five days a week. This is equivalent to 40 hours per week, you simply pay 80 hours for the two weeks on the day of payment; overtime hours are also easy to calculate for hourly workers with biweekly payments
A biweekly payment reduces calculation errors in the payment card and simplifies the deduction of concepts.
Simplification of account reconciliation
When an employer issues paychecks, he must follow up until they are cashed at the bank. The bi-weekly payments of payroll require print fewer paychecks and thus reduces monitoring.
Why does the employee prefer biweekly payments?
Employees prefer a biweekly or biweekly payroll because it is predictable, consistent and easy to understand. To help employees understand their monthly payment plan, some employers create and distribute payroll schedules.
Salaried employees are usually fine with a monthly payroll since they are paid the same amount in each pay period.
A biweekly payroll payment gives employees a paycheck for an amount greater than one week, as it is based on a longer work period, which allows the employee to cover expenses that require higher income and pay various accounts in a way simultaneous.