Buzz
Leap Day has arrived, and it's a Monday. For salaried workers, does that mean your employer is getting a day of unpaid labor from you? Not really, as Jeff Hoyt from Money Tips clarifies.
Salaried employees typically receive an annual salary, meaning their pay is distributed over specific periods, or pay cycles. Hoyt explains how this applies to leap years:
If you're paid biweekly, your salary is divided into 14/366ths in 2016, compared to 14/365ths. You might view this as working for free on that day, but it's common for salaried employees to put in more than forty hours a week, so it's really a question of perspective... For those who were paid biweekly (a common arrangement), 2015 was a 'payroll leap year,' as it had 27 pay periods instead of the typical 26. Whether this led to extra pay depends on whether your company decided to divide your salary over 26 or 27 periods.
When you're paid on a weekly basis, it works a bit differently.
The uneven distribution of both 365 and 366 days into weekly intervals creates other payroll-related inconsistencies. For instance, if you're paid weekly on Mondays, you'll receive an additional paycheck in years that have 53 Mondays, instead of the usual 52.
In other words, you can interpret it however you like, but ultimately, it doesn’t really matter, as it is already factored into your pay. And if you prefer to view it in terms of workdays, 2015 had 251 working days, and so does 2016.
The Sydney Morning Herald debunks this as a misconception, quoting an expert from the Association of Payroll Specialists, who puts it like this:
The debate has been ongoing for years, but while salaried employees may lose out on a day's pay, experts note that, on a monthly basis, workers have been overpaid in February for the past three years due to its shorter length.
Once again, it depends on how you choose to divide your salary, but your employer most likely divides it based on pay periods. The conclusion: no, you're probably not working for free on Leap Day.
Image courtesy of Sabrina’s Stash.
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