Some companies are trimming the paychecks of salaried employees next year because
of quirk in the calendar that adds an extra pay period, but this policy has some workers complaining, the
Hartford Courant reports.For a Limited Time receive a
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Get Your Report Now!In 2004, some companies will have 27 biweekly pay periods instead of the usual
26. Therefore, some companies have decided to adjust salaried employees' paychecks to account for the extra pay period and
to make sure they add up to the employees' annual salary for the calendar year.
Some employees view this as a cut in pay. As they see it, they would be working
at a lower biweekly rate or working more days for the same annualized compensation.
The newspaper notes that the calendar quirk will only affect some companies
that pay on a biweekly basis, depending on their pay cycles and the day of the
week their payday falls.
CIGNA Corp. is one company that plans to reduce workers'
paychecks to account for the additional pay period. The company did the same
in 1992, when a similar quirk appeared.
Companies can reduce paychecks like CIGNA plans to do as long as they give
workers prior written notice, according to Ron Marquis, assistant director of
the wage and workplace standards division of the Connecticut Department of Labor.
CIGNA says it compensates salaried employees on an annual basis and would be overpaying
salaried employees if the company did not reduce the amount in paychecks next
year.
Other companies facing 27 pay periods have decided against trimming
paychecks. In Connecticut, Electric Boat, The Phoenix Companies, Inc and the Hartford Courant
don't plan to reduce paychecks, according to the newspaper.
The issue doesn't affect companies that pay employees twice a month, meaning
there are always 24 paychecks, the newspaper notes.
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