While February is known for its famously short 28 days, every four years the month extends itself an extra day on the 29th of February. This year, this extra day will fall next Monday. While many employees may wish for a Leap Day Holiday off of work, most will still make their way to the office. But the question remains: Is Leap Day good or bad for employees? Well, that may depend on who you’re asking.
For hourly, non-exempt workers, coming into work on Leap Day may be a welcome occurrence: their employers will pay them for hours worked, and if they work an extra day this year, that’s roughly eight more hours of paid work on their paychecks this year than in a non-Leap Year.
Sounds like a win-win, right? Well, for salaried, exempt employees, the situation might be a little different.
If salaried workers earn a set amount each year irrespective of hours worked, yet there’s one extra day of work this year, does that mean they are working for free on Leap Day? The answer to this question can be puzzling, and it turns out even employment experts cannot come to a general consensus on the issue.
Daniel Schwartz, an employment attorney, believes employers could be getting a day’s worth of work for free from their employers.
“For the extra day, the employer really isn’t paying anything more for an exempt worker. The annual salary is just that, and the paychecks just reflect the portion of the year. Many employers thus get a ‘free’ day of work from exempt workers because they are not paying anything more than in non-Leap Years,” he wrote on the Connecticut Employment Law Blog.
Frank Heinz, a reporter from NBC, begs to differ.
“The short answer is no, you aren’t working for free on Leap Day … you’re just working for less than normal,” Heinz writes.
“Let’s assume you make $50,000 per year in a non-Leap Year. If we take that salary and divide it by the 261 work days, that breaks down to $191.57 gross income, per day,” he goes on to explain. “During a Leap Year, with 262 work days, that breaks down to $190.84 gross income, per day. That means during a Leap Year you will make .73 cents less per day in order to fund your salary on Feb. 29.”
But what the issue really may come down to is how your company’s pay schedule is set up.
A typical year will have 52 weeks plus one day, but a Leap Year has 52 weeks plus two days. If your company’s designated payday falls on this extra day, it could mean an additional paycheck for your employees.
More than likely, employers will build this extra day into the yearly salary, and reduce a worker’s paycheck installment in order to make it all come out even at the end of the year.
However your business structures its payroll, whether it’s through weekly, bi-weekly, or monthly installments, it is imperative for HR professionals to take the time to examine whether their employees’ pay will be affected by the upcoming Leap Day.
If you find that it will alter your pay structure, be prepared to discuss the issue and how your business will respond with your employees. It is, after all, their right to know how their pay could be affected.
For any further questions on how Leap Day might affect your payroll, don’t hesitate to give our Advice & Resolution team a ring at 919-878-9222 or 336-668-7746. Have a Happy Leap Day everyone!