A few years ago, I addressed the issue of what happens when there’s a “leap year” for pay periods. Every five years or so (and 2009 was one of them), a year will have 27 bi-weekly paydays instead of 26. That issue arises because bi-weekly pay programs pay employees in 14-day increments resulting in a 364 day annual pay cycle.
But 2012 presents a different question: Does an employer have to pay an employee “extra” for the leap day on February 29th?
The answer may seem confusing at first, but it’s really quite simple.
For hourly, non-exempt workers, they only get paid for hours worked. So, if they work on February 29th, they get paid for the work on that date.
For salaried, exempt workers, they are typically paid on an weekly, bi-weekly, or semi-monthly basis. But an employee’s salary is typically a pro-rata basis of his or her annual salary and they get paid regardless of the amount of time they work each week.
So, 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.
Of course, this is really more of an academic issue because in practice, employees are paid on a bi-weekly basis so it’ll be made up at some point. (It has more of an impact on employees paid on a monthly or semi-monthly basis.)
Interestingly, my cursory review of case law reveals nary a challenge to this practice. The only reference to leap days and federal wage claims deal with statute of limitations.
Case in point: When you’re claiming you filed a claim on a certain date, be sure you have your leap years right — unlike this party that claimed to have filed on February 29, 2005.
The court even felt compelled to add the following footnote: “February has twenty-nine days only in leap years, and leap years occur only in years divisible by four, which 2005 is not.”
Glad the court cleared that up.