Should workers have legal rights as to *when* they are paid?

Dubhlinner

Something which has always bugged me is being paid monthly. I'm a bit clumsy with money. Being paid monthly I tend to behave recklessly for the first few days and end up scrumping for the remaining 4 weeks

When I'm paid weekly life just seems better. Always seem to have money to do things and its never far off payday.

I suspect the main reason monthly pay is encouraged is it means people are more likely to be open to credit facilities - overdrafts credit cards and loans.

Monthly pay has benefits such as being able to pay your mortgage/rent off before you start spending your cash - but really I think landlords would happily accept weekly pay if it was the norm.

Economically I'm generally pretty right wing so this kind of goes against the grain of my thinking... though recently I was thinking this should be legislated for.

Essentially a law could be put into place so that the individual can legally choose if they wish to be paid weekly fortnightly or monthly - as I understand some people prefer being paid monthly (actually myself I'd probably choose fortnightly)

Afterall it is their money. I don't really see why employers should be able to hold it from them for a few weeks.

The Corinthian

Payment runs cost money. Not just in terms of bank charges, but also resource time. Additionally, you may want to be paid fortnightly. Someone else may prefer weekly, another monthly and yet another daily. I'm sure the employer would much rather do so when they get paid.

Employer and employee sign an agreement much like anyone else. Monthly payments are a common standard nowadays (weekly used to be far more common a long time ago) so that salaries can be paid with a minimum of hassle for the employer and the employee knows where they stand.

It's actually a compromise - you get a guaranteed (regardless of profitability) salary on a regular basis, and they get to pay it out with a minimum of hassle.

What you're suggesting is predicated upon your own fiscal shortcomings and that you should still get a guaranteed (regardless of profitability) salary on a regular basis, but on the terms you choose.

My feeling is you should learn to be more disciplined with your money. If you don't, you're going to have way worse problems in the long run than being a bit short at the end of the month.

Sleepy

You can always work around this by getting paid into one bank account, have say your rent come out of that then have a weekly Standing Order to a second account which you could then use as your day-to-day current account.

Dubhlinner

The Corinthian wrote: »

Payment runs cost money. Not just in terms of bank charges, but also resource time. Additionally, you may want to be paid fortnightly. Someone else may prefer weekly, another monthly and yet another daily. I'm sure the employer would much rather do so when they get paid.

Employer and employee sign an agreement much like anyone else. Monthly payments are a common standard nowadays (weekly used to be far more common a long time ago) so that salaries can be paid with a minimum of hassle for the employer and the employee knows where they stand.

It's actually a compromise - you get a guaranteed (regardless of profitability) salary on a regular basis, and they get to pay it out with a minimum of hassle.

What you're suggesting is predicated upon your own fiscal shortcomings and that you should still get a guaranteed (regardless of profitability) salary on a regular basis, but on the terms you choose.

My feeling is you should learn to be more disciplined with your money. If you don't, you're going to have way worse problems in the long run than being a bit short at the end of the month.

Indeed some good points here. Though how do you feel about the likes of Tesco paying their part-time staff by the month? They do that now in the UK anyway not sure about Ireland. I myself used to work part time in a retail outlet who paid us by the month. Absolute nightmare.

I think its completely taking the piss. If someone's only doing 8 hours a week the time taken to process their salary will be minimal. Furthermore in these kind of jobs the employer isn't waiting to get paid like say a building firm as their daily turnover is massive.

The Corinthian

45 hours a week or 1 hour a week the processing time is much the same, however the number of payment runs would increase. Paying once per month rather than weekly cuts the number of runs by a factor of about four. Most of the developed World pays monthly.

It may not suit some, but that's life; learning to budget is ultimately one of those life skills that everyone should learn and unless you want to have a situation whereby everyone can pick how often they want to be paid (which will overload most accounts departments) you'll always end up with someone unhappy.

Permabear

This post has been deleted.

P. Breathnach

If I employ somebody at a fairly modest €1000 per month, and pay her at the end of the month, I am effectively forcing her to fund my business to an average of €500. That's a lot to require of somebody who has limited means. Should she live on air for the first month of her employment?

I see some merit in the argument about payroll costs, but the case might be overstated. The costs are not that high. The cashflow benefit to the employer might be more significant but that is achieved at the expense of the employee.

Long ago I was paid quarterly. Yes, you read it correctly: once every three months the full payroll operation kicked in. It was a manual process in those distant days. But it was made tolerable because on other months I received an advance that was slightly less than a third of my expected end-of-quarter salary. So there's the model: weekly advances against the monthly salary.

The Corinthian

P. Breathnach wrote: »

Should she live on air for the first month of her employment?

Presuming she goes into a job without any savings whatsoever, she can still get an advance on the first month (or even two). Even then the argument that she should not have to live on air for the first month of her employment really only covers the first month, it does not justify setting the ongoing payment schedule based upon the first month's cash flow.

The cashflow benefit to the employer might be more significant but that is achieved at the expense of the employee.

And if the company is having cashflow problems, they still have to pay the salaries, thus benefit to the employee is achieved at the expense of the employer.

Ultimately the present system is a compromise between the two.

I understand the arguments you're putting forward, but to date the OP's principle one seems to be based upon his/her inability to budget. My own experience is that people who are on monthly salaries and broke by the end of the month tend to also be the same who are on weekly salaries and broke by Monday morning; I knew one guy who was paid weekly who used to joke that "money in the wallet for longer than two days stinks".

Monthly or weekly payments would make no difference.

Dubhlinner

The Corinthian wrote: »

I understand the arguments you're putting forward, but to date the OP's principle one seems to be based upon his/her inability to budget. My own experience is that people who are on monthly salaries and broke by the end of the month tend to also be the same who are on weekly salaries and broke by Monday morning; I knew one guy who was paid weekly who used to joke that "money in the wallet for longer than two days stinks".

Monthly or weekly payments would make no difference.

Come down off the high horse a bit. Its just a discussion. That was just background thoughts.

I've also mentioned about low salary workers in part time jobs - particularly in retail. In these situations it really does seem unfair to employees to fund the business for three weeks of the month.

Employers aren't obliged to give advances. Often they won't which usually leads to credit facilities or if the bank say no its borrowing from friends/family. Which would be unnecessary if they were just given weekly pay. Given they're often on minimum wage in high cashflow (retail) outlets it doesn't seem that big a compromise to do so

P. Breathnach

The Corinthian wrote: »

...
I understand the arguments you're putting forward, but to date the OP's principle one seems to be based upon his/her inability to budget....

My argument is mainly focused on low-paid people. It does not matter what ability they have to devise and manage a budget if they do not have the money because the employer chooses to make them wait until weeks after they have earned it.

I never had a problem budgeting because right through my adult life my income has been reasonably good. But I have worked alongside people on low pay and could see how different things were for them - usually not because they were improvident, but because they were broke by the end of the week. Monthly pay is okay for people on good incomes; it's less okay for people on or near minimum wage levels of income.

The Corinthian

Dubhlinner wrote: »

Come down off the high horse a bit. Its just a discussion. That was just background thoughts.

There's no high horse; I am just citing what you said.

I've also mentioned about low salary workers in part time jobs - particularly in retail. In these situations it really does seem unfair to employees to fund the business for three weeks of the month.

And as I said, often companies have cashflow or profitability problems but will still have to pay the salaries regardless. It is a compromise position between employer and employee.

I worked in retail, part time, when I was in my early twenties. Back then we were paid on a weekly basis, but weekly/monthly this would not have made a difference to me as I could budget. It was someone who worked with me (he was full-time) who came out with the expression I quoted earlier. He too was paid weekly, yet was broke come Monday morning having blown his wages over the weekend. Weekly payments did not help him; perhaps he should have been paid on a daily basis?

Employers aren't obliged to give advances.

No, but I've never come across one who's refused a request for one in an emergency. I've seen them refuse when the employee has an emergency every week, but if that's the case, the employee has financial problems that cannot be solved by weekly payments.

Often they won't which usually leads to credit facilities or if the bank say no its borrowing from friends/family. Which would be unnecessary if they were just given weekly pay.

I disagree that it would be unnecessary if they were just given weekly pay and have stated why. If you want to address that, I'm willing to hear a rebuttal.

The Corinthian

P. Breathnach wrote: »

Monthly pay is okay for people on good incomes; it's less okay for people on or near minimum wage levels of income.

Why? The salary does not increase if they're paid on a weekly basis, so it comes down to cash flow. Are you suggesting that lower paid people should be paid weekly because they cannot be trusted to manage larger salary payments?

seamus

P. Breathnach wrote: »

If I employ somebody at a fairly modest €1000 per month, and pay her at the end of the month, I am effectively forcing her to fund my business to an average of €500. That's a lot to require of somebody who has limited means.

You can make this same argument regardless of how often you run the payroll. If you pay weekly, then your employee is funding your business to the average tune of €125/week.
Unless you were to pay the employee at the end of each hour, then they are always providing their employer with a certain amount of "credit". The argument doesn't really hold water as far as I can see. The employee receives the same money regardless of whether she's being paid weekly or monthly, the only difference being a requirement to have some responsibility for their own finances in the latter case.
The amount paid is irrelevant. €1,000 doesn't suddenly disappear quicker when you pay it in a lump sum rather than 4 small pieces.

I see some merit in the argument about payroll costs, but the case might be overstated. The costs are not that high.

That depends on the company. A payroll run in our place takes two days (between doing the run and doublechecking the calculations) and has a deadline - the file has to be with the bank 48 hours before the payment date. This basically means that the payroll team are engaged for at least two days that week, and another day the following week dealing with queries.

Change that to four times a month, and what you have is a payroll team who are engaged fully for an extra 8 working days a month, going from one payment run to the next on a weekly basis.
So the things which they do for the rest of the month will require new employees to be hired in order to fill that gap. That's at least another €50- €80k a year for the employer.

So there's the model: weekly advances against the monthly salary.

It's not that much better. Because you still have to have a member of staff who processes and issues the advances and deals with the queries on them.

Allowing employees to dictate when they are paid is contrary to the smooth running of a business. Employment law needs to adequately balance the needs of the employee against the needs of the business. This is often forgotten, but the business's needs are just as important as the employee's - without the business, there is no employee.

P. Breathnach

The Corinthian wrote: »

Why? The salary does not increase if they're paid on a weekly basis, so it comes down to cash flow. Are you suggesting that lower paid people should be paid weekly because they cannot be trusted to manage larger salary payments?

Not at all. I'm suggesting that it is a greater burden on them to do without their money for weeks.

If a person has an income of €3k per month, she can probably relatively easily generate a buffer that allows her to budget for being paid monthly in arrears. A person on €1k per month might need every cent to pay for basic requirements.

The Corinthian

P. Breathnach wrote: »

If a person has an income of €3k per month, she can probably relatively easily generate a buffer that allows her to budget for being paid monthly in arrears. A person on €1k per month might need every cent to pay for basic requirements.

Sorry, but that does not add up. Being paid €230 p.w. or €1,000 p.m. the same person might need every cent to pay for basic requirements, as has already been pointed out repeatedly. It makes no difference and you've not explained, outside of someone's inability to manage their money, how it might do so.

Permabear

This post has been deleted.

P. Breathnach

The Corinthian wrote: »

Sorry, but that does not add up. Being paid €230 p.w. or €1,000 p.m. the same person might need every cent to pay for basic requirements, as has already been pointed out repeatedly. It makes no difference and you've not explained, outside of someone's inability to manage their money, how it might do so.

???

seamus

P. Breathnach wrote: »

???

I presume that's a typo and he meant €250p.w.

The basic point is that someone getting €1,000 per month still has the same amount of money regardless of whether they're being paid monthly or weekly. They are not left any worse off being paid weekly unless they fail to manage their money effectively.

The argument is usually that money resting in the account will be spent and so they can't meet their bills near the end of the month.
However the opposite argument is also true - large bills received soon after being paid can be easily met when being paid monthly, whereas on a weekly wage the person will struggle to meet these bills.

In both cases the issue is an inability to budget, it's not an inherent problem with the frequency of their cashflow.

The issue of the "back month" is a non-issue IMO. It will happen for a very small number of people in very limited circumstances. In most cases, the person is moving from one job paying monthly to another paying monthly and there is no break in the continuity of being paid.

The Corinthian

seamus wrote: »

I presume that's a typo and he meant €250p.w.

Nope. €230 p.w. is the equivalent of €1,000 p.m. - €12,000 p.a. divided by 52 weeks and 12 months respectively. Actually €230.77 p.w. to be more exact.

Of course, if one was expecting to be paid €250 p.w. rather than €1,000 p.m., then I can understand their preference for the former...

P. Breathnach

seamus wrote: »

...
The basic point is that someone getting €1,000 per month still has the same amount of money regardless of whether they're being paid monthly or weekly. They are not left any worse off being paid weekly unless they fail to manage their money effectively.

No. The difficulty that you (and, I think, The Corinthian) are skimming past is that when a person starts a low-paid job she has nothing for a month. And if she borrows money (by way of advances on pay or otherwise) then at the end of the month the pay goes to clear the borrowing. The next month, the cycle starts again. A person whose income safely exceeds the amount needed for the basic cost of living can build up a reserve that will bridge the deficit.

The issue of the "back month" is a non-issue IMO. It will happen for a very small number of people in very limited circumstances. In most cases, the person is moving from one job paying monthly to another paying monthly and there is no break in the continuity of being paid.

An issue does not become a non-issue on the basis of the number of people affected. I estimate that the number of people caught in this trap, while a minority, is not trivially small. I would also guess that the numbers will increase because pay-rates in many jobs are lower than they were, and there will be people switching from weekly JSA or JSB to low-paid jobs where they are expected to wait a month for their first pay.

The Corinthian

P. Breathnach wrote: »

No. The difficulty that you (and, I think, The Corinthian) are skimming past is that when a person starts a low-paid job she has nothing for a month. And if she borrows money (by way of advances on pay or otherwise) then at the end of the month the pay goes to clear the borrowing. The next month, the cycle starts again. A person whose income safely exceeds the amount needed for the basic cost of living can build up a reserve that will bridge the deficit.

We're not skimming past anything. Perhaps the first month, if the employee has no savings, is an issue, but ultimately it makes no difference in the longer term if you can budget that monthly salary.

seamus

Do you have any actual figures for the numbers of people so affected by this budgetary injustice that we require legislation to correct it?

This is not an issue that I can ever recall any acquaintance of mine relaying to me at any stage. Sure, I know people who've had a lean month while they wait for their first salary payment, but I'm yet to hear of anyone suffering long-term crippling debt because they had to wait a few weeks to be paid when starting a job.

In reality most people don't start a new job at the start of a month/salary cycle, so this means the numbers affected by this "issue" are smaller again. On average, a person switching from weekly wage/JSB to a monthly salary will only have to cover themselves for an extra week while they wait to get paid.

P. Breathnach

I've said my piece.

If you don't want to agree with me, I don't mind.

The Corinthian

P. Breathnach wrote: »

I've said my piece.

If you don't want to agree with me, I don't mind.

Your piece doesn't make a lot of sense, at least how you've presented it, but if that's your position now, then grand.

P. Breathnach

The Corinthian wrote: »

Your piece doesn't make a lot of sense, at least how you've presented it, but if that's your position now, then grand.

There's no need for cheap shots.

The Corinthian

P. Breathnach wrote: »

There's no need for cheap shots.

Com'on a number of posters have all pointed out that what you're saying makes no sense in any real terms and have asked you to explain how it should make sense when it has been demonstrated repeatedly to be based on flawed reasoning.

Your response has been to refuse and walk away from the discussion, stating that it's your opinion and that's that - you're entitled to your opinion, but not that we should respect it under such circumstances.

Kosseegan

P. Breathnach wrote: »

If I employ somebody at a fairly modest €1000 per month, and pay her at the end of the month, I am effectively forcing her to fund my business to an average of €500. That's a lot to require of somebody who has limited means. Should she live on air for the first month of her employment?

All business runs on credit. You might well supply customers and not get paid for months. You may have been paying staff wages evrry month. There may be initial capital invested without which there would be no jobs at all.

Kosseegan

The Corinthian wrote: »

I understand the arguments you're putting forward, but to date the OP's principle one seems to be based upon his/her inability to budget. My own experience is that people who are on monthly salaries and broke by the end of the month tend to also be the same who are on weekly salaries and broke by Monday morning; I knew one guy who was paid weekly who used to joke that "money in the wallet for longer than two days stinks".

Monthly or weekly payments would make no difference.

I knew of a guy who got his weekly pay every Thursday. The first thing he did was buy a postal order and post it to himself. After the payday euphoria and going brok the postal order turned up in the post and kept him going till the next pay day.

The Corinthian

I can understand the argument that on the first month or two in a new job, people (without savings) may be broke, but this is an argument more for advances at the start than long term restructuring of payments.

I can understand that money retained until the end of the month means that the employee loses interest on that money; but in all honesty, how much interest would they be losing out on? About six weeks interest from a single weeks wage is the answer (calculated weekly), which with a monthly wage of €1,000 and 2.75% AER would come to 73c per month or a total loss of under €9 p.a. to the employee. In many jobs you'd get that back several times over in free coffee.

The only other argument that's been presented is just a question that people cannot control their expenditure. And for me the solution for this is not to drip feed them because we cannot trust them to be responsible with money, but that they learn to be responsible with money.

TBH, Ireland would be a lot better off now if people had learned that lesson during the boom times.

The arguments for weekly payments are simply not strong enough, certainly not when compared with those for monthly payments.

P. Breathnach

The Corinthian wrote: »

Com'on a number of posters have all pointed out that what you're saying makes no sense in any real terms and have asked you to explain how it should make sense when it has been demonstrated repeatedly to be based on flawed reasoning.

Your response has been to refuse and walk away from the discussion, stating that it's your opinion and that's that - you're entitled to your opinion, but not that we should respect it under such circumstances.

It seems odd that I should be challenged for choosing not to continue in a discussion.

I stated my position on the matter under discussion, and found people "disagreeing" with me by ignoring the kernel of my argument. So I decided that it simply was not useful to continue: why make the same point again in order to have it ignored or distorted again? There are better ways of wasting time than arguing with the obdurate.

As for the cheap shot about my not being entitled to have my opinion respected "under such circumstances": my argument was not being accorded any noticeable respect before I said that I was finished with the discussion, so I lose nothing by your declaring a withholding of respect.

The post has strong echoes of childish taunting, where one sets himself up as the arbiter of the debate as well as a participant, and declares himself to be the winner. No, my reasoning was not flawed: it was simply a matter of people not giving it any consideration.

Goodbye again.

The Corinthian

P. Breathnach wrote: »

It seems odd that I should be challenged for choosing not to continue in a discussion.

No, you're challenged for avoiding direct argument and when you could no longer avoid it you walked away.

I stated my position on the matter under discussion, and found people "disagreeing" with me by ignoring the kernel of my argument.

No one ignored the kernel of your argument, people addressed it repeatedly and you ignored their rebuttals pretending they had somehow not done so.

As for the cheap shot about my not being entitled to have my opinion respected "under such circumstances": my argument was not being accorded any noticeable respect before I said that I was finished with the discussion, so I lose nothing by your declaring a withholding of respect.

You made a song and dance about "saying your peace" and walking away - a variation on the "I have an opinion, and I'm not playing any more" scenario. I simply concurred that you do have an opinion, you can naturally say your peace, but that does not mean that I should respect what you've said, no matter what song and dance you make about having it in the first place.

No, my reasoning was not flawed: it was simply a matter of people not giving it any consideration.

If it was not flawed, why did you fail repeatedly to address the rebuttals that were put forward? If everyone else 'didn't understand' why did you not actually better explain yourself, rather than repeatedly say the same thing over and over again?

Your argument was given consideration and was rejected with supporting argument. Rather than continue the discussion and address these rebuttals, you instead chose to play the prima donna who is entitled to her opinion and if you don't like it you're taking your toys home with you.

Goodbye again.

Bye-bye. Unless or until you want to try to have the last word again.

Permabear

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fungun

i think he does have a valid point in there. There is an agreement in place that you work for a month, say. One could logically argue that if you are being paid monthly, the best compromise would be to pay you after 2 weeks for the month (so essentially you advance them 2 weeks worth of work, they advance you 2 weeks worth of pay); however you only get paid when the work is done, essentially offering your employer free credit for the time between paychecks.

I know the lack of money is only a problem if you have no savings, but why should the employer be able to earn that interest rather than the employee?

Milk & Honey

fungun wrote: »

i think he does have a valid point in there. There is an agreement in place that you work for a month, say. One could logically argue that if you are being paid monthly, the best compromise would be to pay you after 2 weeks for the month (so essentially you advance them 2 weeks worth of work, they advance you 2 weeks worth of pay); however you only get paid when the work is done, essentially offering your employer free credit for the time between paychecks.

I know the lack of money is only a problem if you have no savings, but why should the employer be able to earn that interest rather than the employee?

Who knows what the employers cash flow position is? Some employers often have to borrow money to pay wages. Should they deduct the interest they have to pay from the wages?
The employer offers a job at a certain rate and payable in a certain manner. The employee agrees and takes the job or doesn't. In commercial contracts goods are often delivered and the supplier has to wait months for payment. The right to interest only kicks in after 30 days and is hardly ever claimed.

The Corinthian

Milk & Honey wrote: »

The employer offers a job at a certain rate and payable in a certain manner. The employee agrees and takes the job or doesn't. In commercial contracts goods are often delivered and the supplier has to wait months for payment. The right to interest only kicks in after 30 days and is hardly ever claimed.

As I already posted, the amount of interest lost is in reality tiny, and in the vast majority of jobs easily compensated for through perks such as free coffee.

But it is true that this occurs frequently in all sorts of commercial contracts. Another area where this occurs is in rental deposits. Many other countries regulate this, by creating special bank accounts, in the renter's name, which can only be claimed (including interest accrued) once the rental contract has ended.